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GS Paper: GS2

  • Ocean Governance – UNCLOS, ISA, High Seas Teaty, etc.

  • Trump launches Board of Peace

    Why in the news?

    The United States has launched a new Board of Peace initiative at the World Economic Forum in Davos, projecting it as a global peace-making body that could rival or even replace the United Nations in the long term.The move is significant because many traditional U.S. allies declined participation, revealing skepticism about its mandate and legitimacy.

    What is the Board of Peace?

    Origin and Initial Mandate

    1. Conceptualisation: Conceived by Donald Trump as part of the second phase of a U.S.-brokered 20-point Gaza ceasefire plan announced in September.
    2. Original Scope: Oversight of demilitarisation, reconstruction, and governance of the Gaza Strip, following devastation caused by Israel’s two-year war.
    3. International Backing: Received formal legitimacy when the United Nations Security Council endorsed the ceasefire plan in November.

    Mandate Expansion and Charter Design

    1. Mandate Expansion: Expanded from a Gaza-specific reconstruction body to a global institution addressing conflicts worldwide.
    2. Charter Language: Defines the Board as an “international organization” promoting stability, peace, and governance in areas affected or threatened by conflict.
    3. Notable Omission: The draft charter circulated with invitations does not reference Gaza, despite Gaza being the original trigger.

    Leadership and Governance Structure

    1. Chairmanship: Trump designated as indefinite chairman, potentially extending beyond his second presidential term.
    2. Institutional Hierarchy: Board positioned above a Founding Executive Board.
    3. Executive Composition: Includes Jared Kushner, Marco Rubio, Steve Witkoff, andTony Blair, indicating executive-driven rather than multilateral governance.

    Membership Model and Access Rules

    1. Term Structure: Standard membership for three-year terms.
    2. Permanent Seats: Available upon payment of USD 1 billion to a peace-building fund.
    3. Governance Implication: Introduces a financial criterion for institutional permanence, distinct from norm-based multilateral systems.

    Why is participation in the Board of Peace contested?

    1. Limited Attendance: Heads of state or senior officials from only 19 countries, plus the U.S., were physically present.
    2. Ally Skepticism: Several close U.S. allies opted out due to uncertainty over mandate, authority, and overlap with existing institutions.
    3. Legislative Constraints: Some countries indicated interest but require parliamentary approval before formal participation.

    How does the Board of Peace relate to the United Nations?

    1. Institutional Overlap: The Board’s functions closely resemble UN peacekeeping and mediation roles.
    2. U.S. Positioning: The President indicated cooperation with the UN while simultaneously questioning its effectiveness.
    3. Long-term Implication: The Board was described as potentially making the UN obsolete, signaling a challenge to the post-1945 multilateral order.

    What role does the Gaza conflict play in this initiative?

    1. Ceasefire Focus: The Board was presented as a mechanism to manage and sustain ceasefires, with Gaza cited as a test case.
    2. Border Opening: Announcement that the Rafah crossing would reopen in both directions after Israeli approval.
    3. Governance Proposal: Oversight of Gaza by a Palestinian committee under U.S. supervision was mentioned as part of post-conflict planning.

    How have major global powers responded?

    1. Russia’s Position: Indicated ongoing consultations and refrained from immediate commitment.
    2. Engagement with Palestine: Russia hosted Palestinian leadership, highlighting parallel diplomatic tracks.
    3. Global Fragmentation: Divergent responses reflect declining consensus on U.S.-led peace initiatives.

    Conclusion

    The launch of the Board of Peace reflects dissatisfaction with existing global peace mechanisms and highlights the limits of unilateral institution-building. The gap between claimed support and actual participation raises questions about its legitimacy and effectiveness, even as ongoing conflicts like Gaza underline the urgency of peace efforts.

    PYQ Relevance

    [UPSC 2024] Terrorism has become a significant threat to global peace and security’. Evaluate the effectiveness of the United Nations Security Council’s Counter-Terrorism Committee (CTC) and its associated bodies in addressing and mitigating this threat at the international level.

    Linkage: The question tests how far UN bodies like the Security Council and its counter-terrorism mechanisms have been effective in maintaining global peace and security. The Board of Peace has been launched because existing UN mechanisms are seen as slow and ineffective.

  • Prior Sanction for Corruption Investigations | Section 17A of PCA, 1988

    Why in the News?

    A two judge Bench of the Supreme Court of India has delivered a split verdict on the constitutional validity of Section 17A of the Prevention of Corruption Act, 1988, which mandates prior government approval before investigation against public servants for decisions taken in official capacity.

    What is the Current Split Verdict?

    • Justice K V Viswanathan
        • Upheld Section 17A conditionally
        • Held prior approval is needed to protect honest officers
        • Said approval must come from an independent authority
        • Linked Section 17A with Lokpal and Lokayuktas Act, 2013
        • Approval to be based on binding opinion of Lokpal for Centre and Lokayukta for States.
    • Justice B V Nagarathna
      • Held Section 17A unconstitutional
      • Called it “old wine in new bottle”
      • Violates Article 14
      • No rational nexus or intelligible differentia
      • Protection already exists under Section 19 which requires sanction before prosecution

    What is the Prevention of Corruption Act, 1988?

    • Enacted to consolidate laws on corruption among public servants
    • Originated from recommendations of the Santhanam Committee (1962)
    • Covers offences such as
      • Bribery
      • Criminal misconduct
      • Undue advantage
    • Applies to public servants, including government officials, judges, and local authority employees

    What is Section 17A of PCA?

    • Inserted through 2018 amendment
    • Requires prior approval of the appropriate government before
      • Inquiry or
      • Investigation
    • Applicable when alleged offence relates to
      • A recommendation made or
      • A decision taken by a public servant while discharging official duties

    Rationale Behind Section 17A

    • To protect honest officers from
      • Frivolous
      • Vexatious complaints
    • Intended to prevent decision making paralysis or “play it safe” behaviour in bureaucracy
    • Distinguishes between
      • Good faith administrative decisions
      • Intentional corruption

    Earlier Supreme Court Rulings

    • Vineet Narain vs Union of India (1998)
        • Struck down the CBI’s Single Directive
        • Held that prior sanction for investigation violates rule of law
    • Dr Subramaniam Swamy vs Director, CBI (2014)
      • Struck down Section 6A of DSPE Act
      • Required prior approval for probing senior officers
      • Declared violative of Article 14 (equality before law)
    [2025] Consider the following statements about Lokpal: 

    I. The power of Lokpal applies to public servants of India, but not to the Indian public servants posted outside India. 

    II. The Chairperson or a Member shall not be a Member of the Parliament or a Member of the Legislature of any State or Union Territory, and only the Chief Justice of India, whether incumbent or retired, has to be its Chairperson. 

    III. The Chairperson or a Member shall not be a person of less than forty-five years of age on the date of assuming office. 

    IV. Lokpal cannot inquire into the allegations of corruption against a sitting Prime Minister of India. 

    Which of the statements given above is/ are correct? 

    (a) III only (b) II and III (c) I and IV (d) None of the above statements is correct

  • Spain joins Indo-Pacific Oceans Initiative (IPOI)

    Why in the News?

    Spain has formally joined the Indo-Pacific Oceans Initiative, with Spain’s Foreign Minister handing over the Declaration of Accession to S. Jaishankar.

    What is the Indo-Pacific Oceans Initiative (IPOI)?

    • A non-treaty, voluntary, cooperative framework for maritime cooperation
    • Focused on practical collaboration, not military alliances
    • Applicable to like-minded countries in the Indo-Pacific region

    Aim of IPOI

    • Promote a free, open, inclusive, and rules-based Indo-Pacific
    • Address maritime challenges through cooperation and capacity building
    • Balance security, development, and sustainability in maritime domains

    Significance of Spain’s Accession

    • Enhances global and European legitimacy of IPOI
    • Reflects growing Europe Indo-Pacific engagement
    • Strengthens India’s role as a net security provider and agenda-setter
    • Promotes inclusive multilateralism amid rising great power rivalry

    Prelims Pointers

    • IPOI is not a treaty or alliance
    • It is India-led, unlike QUAD which is minilateral
    • Focuses on oceans governance, not territorial disputes
    • Countries participate based on voluntary pillar leadership
    [2017] Consider the following in respect of Indian Ocean Naval Symposium (IONS): 

    1. Inaugural IONS was held in India in 2015 under the chairmanship of the Indian Navy

    2. IONS is a voluntary initiative that seeks to increase maritime co-operation among navies of the littoral states of the Indian Ocean Region

    Which of the above statements is/are correct? 

    (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

  • [22nd January 2026] The Hindu OpED: Judicial removal, tough law with a loophole

    PYQ Relevance

    [UPSC 2023]  “Constitutionally guaranteed judicial independence is a prerequisite of democracy.” Comment.

    Linkage: This issue lies at the core of GS Paper II (Separation of Powers and Judiciary), examining how constitutional safeguards protect judicial independence while ensuring accountability. The article on judicial removal highlights that procedural loopholes in impeachment weaken accountability.

    Mentor’s Comment

    Judicial independence and accountability are equally important under the Constitution. The impeachment process was meant to protect judges from political pressure while allowing removal in cases of proven misconduct. Recent events, however, show a clear gap between law and practice. Discretion given to the Speaker or Chairman has created a loophole that can block the removal of even an erring judge.

    Why in the News?

    In December 2025, Lok Sabha MPs submitted a notice to remove a High Court judge for misconduct. Although the required number of signatures was met, the process stalled because the Speaker can admit or reject the motion. This reflects a long-standing institutional failure: no judge has ever been removed through impeachment despite repeated allegations. The episode shows how a constitutionally strict removal process can be blocked at the initial procedural stage itself.

    What is the constitutional framework for removal of judges?

    1. Constitutional Basis: Articles 124(4) and 217 mandate removal only through a special majority of Parliament on grounds of proven misbehaviour or incapacity.
    2. Procedural Authority: Article 124(5) empowers Parliament to legislate procedures for investigation and presentation of an address to the President.
    3. Statutory Instrument: The Judges (Inquiry) Act, 1968 operationalises this power by prescribing inquiry procedures and thresholds.
    4. High Threshold: Removal requires a majority of total membership and two-thirds of members present and voting in each House.

    How does the Judges (Inquiry) Act structure the removal process?

    1. Notice Requirement: Admission of a motion requires signatures of 100 Lok Sabha MPs or 50 Rajya Sabha MPs.
    2. Speaker/Chairman’s Role: The Presiding Officer may either admit or refuse to admit the motion.
    3. Inquiry Committee: Upon admission, a three-member committee (Supreme Court judge, Chief Justice of a High Court, and a distinguished jurist) investigates charges.
    4. Final Stage: Only after a finding of guilt does Parliament vote on the motion for removal.

    Where does the procedural loophole arise?

    1. Statutory Discretion: The Act empowers the Speaker/Chairman to reject a motion without prescribing objective criteria.
    2. Absence of Reasons: No mandatory requirement exists to record or disclose reasons for refusal.
    3. Non-Justiciability: The admission stage is treated as part of parliamentary procedure, limiting judicial review.
    4. Gatekeeping Power: Rejection at this stage prevents inquiry, evidence collection, and parliamentary debate.

    Why is this discretion constitutionally problematic?

    1. Erosion of Accountability: Proven misconduct cannot be examined if inquiry is blocked at inception.
    2. Separation of Powers Concern: A political office-holder effectively determines whether judicial misconduct is investigated.
    3. Arbitrariness Risk: Absence of standards allows inconsistent or selective application.
    4. Institutional Contradiction: Parliament’s power to regulate procedure undermines its own constitutional duty to act on misbehaviour.

    Has impeachment ever succeeded in India?

    1. Historical Record: No judge has been removed through impeachment since independence.
    2. Failed Attempts: Multiple motions have lapsed or been withdrawn due to resignation or procedural deadlock.
    3. Pattern: Political reluctance combined with procedural discretion has ensured institutional inertia.
    4. Outcome: The removal mechanism exists in form but not in effect.

    Conclusion

    Judicial independence is vital for democracy, but it cannot exist without credible accountability. The current removal framework, though constitutionally stringent, is weakened by discretionary gatekeeping at the admission stage. This procedural gap allows serious allegations to go unexamined, undermining public trust in constitutional institutions. Strengthening objectivity and transparency in the removal process is therefore essential to preserve both judicial integrity and democratic balance.

  • Building bridges: On Central Bank Digital Currency and BRICS

    Why in the News

    The RBI has suggested that India propose linking BRICS countries’ Central Bank Digital Currency (CBDC) at the 2026 BRICS Summit in India. This signals a shift from limited domestic use of CBDC towards cross-border payments, especially after India’s G20 presidency in 2023 emphasised digital finance cooperation. The move contrasts with India’s successful UPI system and reflects a strategic choice rather than a technological need.

    Central Bank Digital Currency:

    1. It is a digital form of a country’s fiat currency.
    2. It is issued and backed by the central bank
    3. Example: India’s RBI with the Digital Rupee/e₹ that offers the trust of physical cash with digital convenience

    Key Characteristics

    1. Digital Legal Tender: It’s official money in digital form, exchangeable 1:1 with physical cash.
    2. Issued by Central Bank: Directly backed by the central bank, ensuring safety and finality of settlement, unlike private cryptocurrencies.
    3. Digital Wallet: Stored and transacted through a digital wallet on your phone or device.
    4. Retail (CBDC-R) & Wholesale (CBDC-W): Retail is for the public (P2P/P2M), while Wholesale is for specific financial institutions.

    Why Is India Exploring Cross-Border CBDC Linkages?

    1. Limited domestic utility: Reduces relevance of CBDC within India due to UPI’s scale and efficiency.
    2. International payments focus: Repositions CBDC as a tool for cross-border settlements rather than retail payments.
    3. Institutional continuity: Builds upon India’s G20 2023 agenda on crypto and digital payment standardisation.

    How Does RBI’s CBDC Approach Differ from Private Cryptocurrencies?

    1. Sovereign guarantee: Ensures safety and trust absent in private cryptocurrencies.
    2. Non-interest bearing nature: Prevents speculative investment behaviour.
    3. Blockchain utility: Retains advantages of distributed ledger technology without exposure to volatility and fraud.
    4. Regulatory clarity: Enables oversight absent in decentralised crypto systems.

    What Problems in Cross-Border Payments Does CBDC Address?

    1. Transparency deficit: Addresses opacity in international money flows.
    2. Black and laundered money: Creates immutable transaction records.
    3. Traceability: Enables coding of origin and destination points.
    4. Institutional linkage: Allows integration with national identity systems or tax authorities.

    Why Is BRICS a Strategic Platform for CBDC Payments?

    1. Shared constraints: Includes countries facing restricted access to SWIFT.
    2. Payments to sanctioned states: Facilitates transactions with Russia and Iran.
    3. Infrastructure autonomy: Reduces dependence on dollar-centric payment systems.
    4. Mandated compliance: Enables collective rules on identification and reporting.

    What Are the Geopolitical Risks?

    1. Dollar displacement: Triggers strategic concern from the United States.
    2. Tariff retaliation: Faces threat of additional tariffs from the U.S.
    3. Political signalling: Risks being perceived as a challenge to dollar dominance.
    4. Cost-benefit dilemma: Requires evaluation of marginal tariff impact given existing high tariffs.

    What Makes Blockchain Suitable for Cross-Border CBDCs?

    1. Immutable records: Prevents tampering with transaction history.
    2. Programmability: Enables conditional compliance requirements
    3. Auditability: Facilitates regulatory monitoring across jurisdictions.
    4. Efficiency: Reduces friction in settlement mechanisms.

    Challenges Associated with CBDCs

    1. Interoperability: Requires harmonisation of legal and technical standards.
    2. Cybersecurity: Increases exposure to systemic digital risks.
    3. Data governance: Raises concerns over cross-border data sharing.
    4. Geopolitical pushback: Triggers resistance from dollar-centric systems.

    Conclusion:

    India’s push for cross-border CBDC linkages reflects a pragmatic recalibration of its digital finance strategy. With domestic payments efficiently handled by UPI, CBDCs are being repositioned to address gaps in cross-border settlements, transparency, and geopolitical resilience. The success of this approach will depend on interoperability, data governance, and careful management of geopolitical risks while preserving monetary sovereignty.

    PYQ Relevance

    [UPSC 2023] What is the status of digitalization in the Indian economy? Examine the problems faced in this regard and suggest improvements.

    Linkage: The question tests India’s progress in building a digital economy, with emphasis on digital payments. The article shows how UPI’s success limits domestic CBDC use, pushing India to focus on cross-border digital payments instead.

  • Internet Governance Capacity Building Programme

    Why in the News

    India marked one year of the Internet Governance Internship and Capacity Building Scheme (IGICBS), highlighting its role in preparing young professionals to engage effectively in national and global internet governance forums and represent India’s interests.

    Key Institutions Involved

    • National Internet Exchange of India
    • Ministry of Electronics and Information Technology

    About IGICBS

    • A first of its kind capacity building initiative launched in 2024
    • Aims to build human capital in internet governance
    • Targets students and young professionals from Technology, Law, and Public policy.
    • Combines expert led learning, mentorship and internships
    • Bridges policy, technology and academia

    Key Achievements in One Year

    • 10,000 plus participants trained and engaged
    • Creation of a national pipeline of internet governance professionals
    • Strengthened India’s presence in global standards and technical forums
    • Increased youth participation in multi stakeholder internet governance processes

    Strategic Significance

    • Enhances India’s role in global internet governance
    • Supports a secure, inclusive and resilient digital ecosystem
    • Aligns with India’s vision of knowledge led digital governance
    • Builds capacity for engagement in forums such as global internet governance discussions and technical standard bodies

    Prelims Pointers

    • IGICBS is a capacity building and internship programme, not a regulatory body
    • Implemented by NIXI under MeitY
    • Focuses on internet governance, not just coding or IT skills
    • Emphasises youth participation and global engagement
    • Example of soft power through digital leadership
    [2017] In India, it is legally mandatory for which of the following to report on cyber security incidents? 

    1. Service providers 

    2. Data Centres 

    3. Body corporate 

    Select the correct answer using the code given below: 

    (a) 1 only (b) 1 and 2 only (c) 3 only (d) 1, 2 and 3

  • [21st January 2026] The Hindu OpED: To compete with China, India may need China

    PYQ Relevance

    [UPSC 2019] “China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia.” In the light of this statement, discuss its impact on India as her neighbour.

    Linkage: China’s trade surplus enables strategic leverage that affects India’s security and economic autonomy. The article highlights how India’s dependence on Chinese inputs limits effective economic counterbalancing.

    Mentor’s Comment

    This article examines India’s evolving economic engagement with China amid global supply chain reconfiguration. It highlights a strategic paradox: while India seeks to reduce dependence on China, selective Chinese capital and manufacturing linkages may be essential for India’s export competitiveness, industrial upgrading, and integration into global value chains.

    Why in the News?

    India is considering removing the post-2020 restrictions on Chinese FDI imposed after the Galwan clash. This signals a shift away from a security-first approach that sharply reduced Chinese investment. Despite China’s FDI stock falling to 14th place by 2024, India’s trade dependence on China remains high, revealing a contradiction between geopolitical mistrust and India’s need for Chinese capital and components for manufacturing and exports.

    Why were Chinese FDI curbs imposed in 2020?

    1. Security Concerns: Introduced after the Galwan Valley clash to prevent opportunistic takeovers of Indian firms during economic distress.
    2. Policy Instrument: It mandated government approval for FDI from countries sharing land borders with India.
    3. Immediate Outcome: Sharp decline in new Chinese investments despite stable trade volumes.

    How has Chinese FDI in India changed since 2020?

    1. FDI Ranking Decline: China’s rank in India’s FDI inflows fell from 18th (2023) to 22nd (2024).
    2. FDI Stock Position: China’s cumulative FDI stock in India placed it at 14th position in 2024, down from 9th in 2014.
    3. Stock Value: Chinese FDI stock in India stood at approximately $4.25 billion in 2024, significantly lower than Hong Kong ($192 billion) or Singapore ($102.6 billion).

    Does trade data indicate economic decoupling?

    1. Trade Deficit Persistence: India’s trade deficit with China remained above $80 billion.
    2. Import Dependence: China continued to dominate India’s imports of electronics, telecom components, and industrial inputs.
    3. Smartphone Components: Over 60% of smartphone manufacturing components in India originate from China.

    Why is China critical to India’s manufacturing ambitions?

    1. Scale Advantage: China supplies intermediate goods at volumes and prices unmatched by alternative suppliers.
    2. Export Enablement: Chinese inputs support India’s exports to the U.S. and EU, particularly in electronics.
    3. PLI Limitation: Production-Linked Incentive schemes increased assembly but not upstream component manufacturing.

    Can India replace China in global supply chains without China?

    1. Substitution Constraint: No single country can replace China’s integrated supply chain ecosystem.
    2. Regional Spillovers: Vietnam and Thailand rely heavily on Chinese components despite hosting relocated manufacturing.
    3. Cost Impact: Higher tariffs on Chinese inputs raise costs and reduce export competitiveness.

    What does global data suggest about pragmatism over protectionism?

    1. U.S. Case: Despite tariffs, China accounted for over 22% of U.S. smartphone imports in 2024.
    2. EU Dependence: European Union imports from China rose steadily between 2019 and 2023.
    3. Policy Insight: Trade restrictions altered routes but not dependence.

    Conclusion

    India’s economic strategy requires selective engagement rather than exclusion. Chinese FDI and manufacturing linkages can support India’s export growth, technology absorption, and supply chain resilience. A calibrated, security-screened investment framework aligns better with India’s long-term industrial objectives than blanket restrictions.

  • The importance of Pax Silica for India

    Why in the News?

    In December 2025, the U.S. convened the first Pax Silica Summit to secure supply chains for critical minerals, semiconductors, and AI, moving away from China-centric globalisation. The initiative responds to China’s use of rare earths and technology inputs as strategic leverage. For India, it opens the possibility of becoming a trusted supply-chain partner, though capacity constraints remain.

    What is Pax Silica and why has it emerged now?

    Pax Silica is the U.S. Department of State’s flagship effort on AI and supply chain security, advancing new economic security consensus among allies and trusted partners.

    1. Strategic Framework: Integrates critical minerals, semiconductor manufacturing, AI infrastructure, and logistics into a trusted supply-chain network.
    2. Geopolitical Context: Responds to China’s dominance in rare earths and chip manufacturing inputs, and its ability to influence global flows.
    3. Supply-Chain Shock Lessons: Incorporates lessons from COVID-19 and trade disruptions that exposed vulnerabilities in concentrated production systems.
    4. Normative Shift: Moves away from efficiency-based globalisation towards resilience, trust, and political alignment.

    How does Pax Silica seek to restructure global technology supply chains?

    1. Coercive Dependency Reduction: Limits over-reliance on single-country control of critical minerals and manufacturing stages.
    2. Integrated Value Chains: Connects mining, processing, fabrication, logistics, and AI deployment across aligned economies.
    3. Trusted Digital Infrastructure: Promotes secure, interoperable systems for AI and data-intensive technologies.
    4. Selective Coalition Model: Operates through functional partnerships rather than universal multilateral institutions.

    Who are the key participants and what capabilities do they bring?

    1. United States: Anchors advanced semiconductor design, AI platforms, and strategic coordination.
    2. Japan: Contributes precision manufacturing, materials engineering, and chip equipment expertise.
    3. Australia: Supplies lithium and other critical minerals essential for batteries and advanced electronics.
    4. Netherlands: Hosts ASML, a global leader in advanced semiconductor lithography.
    5. South Korea: Provides manufacturing strength in memory chips and advanced fabrication.
    6. Israel: Leads in AI software, defence technologies, and cybersecurity.
    7. United Kingdom: Houses the world’s third-largest AI market and innovation ecosystem.
    8. Middle East Funds: Enable capital deployment through Qatar and UAE sovereign investment vehicles.
    9. Observer Economies: OECD and Taiwan participate without full membership, indicating graded engagement.

    Why is China central to the Pax Silica calculus?

    1. Rare Earth Dominance: Controls a significant share of global REE processing and magnet manufacturing.
    2. Export Controls: Uses trade restrictions as a strategic tool, impacting electronics and automotive industries.
    3. Manufacturing Centrality: Retains scale advantages in downstream electronics assembly.
    4. Strategic Leverage: Demonstrates capacity to weaponise supply chains during political disputes.

    What is India’s current position in the Pax Silica ecosystem?

    1. Digital Infrastructure Strength: Possesses large-scale digital public infrastructure and a growing AI market.
    2. Semiconductor Constraints: Lacks mature fabrication capacity and advanced chip manufacturing ecosystems.
    3. Human Capital Advantage: Hosts a large pool of engineers and returning AI researchers trained abroad.
    4. Policy Initiatives: Has launched semiconductor and AI missions with participation from domestic conglomerates.
    5. Collaborative Links: Engages with Israeli firms for chip fabrication plants and U.S. firms like Micron for assembly and testing.

    What challenges does India face in joining Pax Silica?

    1. Capability Gap: Risks being perceived primarily as a market rather than a technology contributor.
    2. Expectation Management: Faces a “participation gap” between allied expectations and domestic capacities.
    3. Policy Autonomy: Must balance strategic alignment with flexibility in industrial and trade policy.
    4. Regulatory Exposure: May face pressure to adjust export controls, subsidies, and government procurement norms.
    5. Asymmetric Benefits: Risks uneven gains if domestic ecosystem development lags behind integration.

    Conclusion

    Pax Silica reflects the consolidation of technology, security, and geopolitics into a single policy domain. For India, participation offers an opportunity to embed itself in trusted global supply chains, but only if accompanied by accelerated domestic capacity-building. Strategic engagement must prioritise ecosystem development, policy autonomy, and long-term technological self-reliance rather than symbolic alignment.

    PYQ Relevance

    [UPSC 2024] “The West is fostering India as an alternative to reduce dependence on China’s supply chain and as a strategic ally to counter China’s political and economic dominance.” Explain this statement with examples.

    Linkage: The West is promoting India to diversify supply chains away from China, particularly in semiconductors and critical technologies. This also positions India as a strategic partner to counter China’s growing political and economic influence.

  • RBI proposes CBDC linkage on BRICS agenda

    Why in the news?

    Reserve Bank of India has advised the Government of India to place a proposal on linking Central Bank Digital Currencies (CBDCs) on the agenda of the BRICS 2026 Summit, which India will host.

    Key proposal

    • Link BRICS members’ CBDCs including India’s e-rupee for cross border trade finance and tourism payments.
    • Aim is faster settlements, lower transaction costs and reduced dependence on correspondent banking systems.
    • RBI clarifies this is not a formal de dollarisation push, but about efficiency and resilience.

    Background context

    • Builds on the 2025 BRICS Rio Declaration that called for interoperability of payment systems.
    • All core BRICS members Brazil Russia India China South Africa are running CBDC pilot projects, none fully launched yet.

    Central Bank Digital Currencies Vs Cryptocurrency

    • Issuing authority

        • CBDCs are issued and regulated by a country’s central bank such as the Reserve Bank of India
        • Cryptocurrencies are issued privately through decentralised blockchain networks with no sovereign authority, for example Bitcoin

    • Legal status

      • CBDCs are legal tender and must be accepted for payments within the issuing country
      • Cryptocurrencies are not legal tender in most countries and their legal status varies

    Strategic significance

    • Could challenge dollar centric payment rails indirectly amid rising geopolitical tensions.
    • Enhances international use of the rupee through regulated digital channels.
    • Fits India’s push for safe sovereign digital money over private stablecoins.

    Prelims pointers

    • CBDC is sovereign digital legal tender issued by a central bank.
    • RBI views CBDCs as less risky than stablecoins for monetary and financial stability.
    • BRICS was founded in 2009 and later expanded beyond the original five members.
    [2024] Consider the following statements in respect of the digital rupee: 

    1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy

    2. It appears as a liability on the RBI’s balance sheet

    3. It is insured against inflation by its very design

    4. It is freely convertible against commercial bank money and cash

    Which of the statements given above are correct? 

    (a) 1 and 2 only (b) 1 and 3 only (c) 2 and 4 only (d) 1, 2 and 4