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GS Paper: GS3

  • Anti-Dumping Duties on Chemicals

    Why in News?

    Indian chemical industry associations and several ministries have sought a pause on anti-dumping investigations due to rising chemical prices and shortages caused by the West Asia conflict.

    What are Anti-Dumping Duties?

    • Anti-dumping duties are tariffs imposed on imported goods sold below fair market value to protect domestic industries from unfair competition.

    Key Issues Raised

    Rising Input Costs

    • Anti-dumping duties increase prices of chemical intermediates.
    • Impacts downstream sectors such as:
      • Textiles
      • Footwear
      • Packaging
      • Auto components
      • Paints

    Supply Chain Disruptions

    • West Asia conflict has caused shortages and price volatility in petrochemicals.

    Government Response

    • Duty Exemptions: Government of India exempted import duty on 40 petrochemical products till June 30.

    Indigenous Manufacturing Push

    The Department for Promotion of Industry and Internal Trade (DPIIT) asked industry to explore domestic production of over 200 highly import-dependent petrochemical items.

    WTO Trade Policy Review Findings

    • 51% of India’s anti-dumping measures relate to chemicals and allied industries.
    • China is the main target of these investigations.

    India’s Chemical Trade Scenario

    • Chemical imports: about $75 billion
    • Chemical exports: about $44 billion
    • Trade deficit: around $31 billion

    [2020] With reference to the international trade of India at present, which of the following statements is/are correct?

    1.India’s merchandise exports are less than its merchandise imports.
    2.India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
    3.India’s exports of services are more than its imports of services.
    4.India suffers from an overall trade/current account deficit.
    Select the correct answer using the code given below:
    a) 1 and 2 only
    b) 2 and 4 only
    c) 3 only
    d) 1, 3 and 4 only

  • CISF Oversight for Fishing Harbours

    Why in News?

    The Ministry of Home Affairs plans to bring fishing harbours and landing centres under the security oversight of the Central Industrial Security Force (CISF) to strengthen coastal security.

    Key Highlights

    • Around 1,200 fishing harbours and landing sites to come under CISF supervision.
    • India has:
      • 1,547 notified fish landing centres and fishing harbours
      • Spread across 13 coastal States and Union Territories
    • CISF will:
      • Design security protocols
      • Guide local administration
      • Develop uniform security architecture

    Why is this Important?

    Because of large India’s coastline:

    • Extends about 7,516 km
    • Involves multiple agencies:
      • Local police
      • Indian Coast Guard
      • Indian Navy

    Lessons from 26/11 Mumbai Attacks

    • Terrorists entered Mumbai through the sea route after hijacking a fishing vessel, exposing vulnerabilities in coastal surveillance.

    About the Central Industrial Security Force

    • The Central Industrial Security Force (CISF) is a premier paramilitary organization under India’s Ministry of Home Affairs.
    • Established in 1969, it safeguards the nation’s critical industrial and infrastructure assets—including airports, seaports, power plants, and major public sector undertakings—playing a central role in India’s internal security architecture.

    [2025] With reference to the Government of India, consider the following information:
    Organization Some of its functions It works under
    I.Directorate of EnforcementEnforcement of the Fugitive Economic Offenders Act, 2018Internal Security Division- I, Ministry of Home Affairs
    II.Directorate of Revenue IntelligenceEnforces the Provisions of the Customs Act, 1962Department of Revenue, Ministry of Finance
    III.Directorate General of Systems and Data ManagementCarrying out big data analytics to assist tax officers for better policy and nabbing tax evadersDepartment of Revenue, Ministry of Finance
    In how many of the above rows is the information correctly matched?

    [A] Only one

    [B] Only two

    [C] All the three

    [D] None

  • Subsurface Lunar Ice Discovery (Chandrayaan-2)

    Why in the news?

    Scientists from the Physical Research Laboratory (PRL) used data from Chandrayaan-2’s Dual Frequency Synthetic Aperture Radar (DFSAR) to discover strong evidence of subsurface water-ice near the Moon’s South Pole.

    Key Findings

    • Target Location: Four “doubly shadowed craters” located inside Permanently Shadowed Regions (PSRs) at the lunar south pole.
    • Extreme Thermal Environment: These locations are permanently shielded from solar radiation, maintaining temperatures around 25 Kelvin (-248°C), acting as ideal cold traps to preserve volatiles.
    • The Prime Candidate: A 1.1 km diameter micro-crater located within the larger Faustini Crater showed the highest probability of containing clean subsurface ice.

    Geomorphological Evidence

    • Lobate-Rim Morphology: The highly-evident 1.1 km crater exhibits flow-like, lobed patterns along its rim.
    • Geological Meaning: This indicates that the initial meteoroid impact likely penetrated a layer of subsurface ice, melting it briefly to create a slurry-like, fluid ejecta pattern before re-freezing.

    About Chandrayaan-2 & DFSAR

    • Mission Context: Launched in July 2019; while its Vikram lander failed to make a soft landing, the orbiter remains fully functional in lunar orbit.
    • DFSAR Instrument: Dual Frequency Synthetic Aperture Radar.
    • Capabilities: It is the first fully polarimetric radar sent to the Moon, operating across L-band and S-band microwave frequencies to penetrate deep into the lunar regolith.

    Significance

    • In-Situ Resource Utilization (ISRU): Essential for future crewed bases (such as Artemis or India’s planned lunar base) to harvest local water for life support and rocket fuel production.
    • Strategic Mapping: Provides high-fidelity targeting data for future landing and excavation missions, including India’s upcoming Chandrayaan missions.

    Challenges

    • Accessing Cold Traps: Operating mechanical equipment in permanent darkness at 25 Kelvin presents immense engineering challenges.
    • Regolith Depth Overburden: The ice is subsurface, requiring specialized drilling and extraction systems rather than surface scraping.

    [2017] The terms ‘Event Horizon’, ‘Singularity’, ‘String Theory’ and ‘Standard Model’ are sometimes seen in the news in the context of

    [A] Observation and understanding of the Universe

    [B] Study of the solar and the lunar eclipses

    [C] Placing satellites in the orbit of the Earth

    [D] Origin and evolution of living organisms on the earth

  • AMCA Fighter Project

    Why in the news?

    The Ministry of Defence issued the Request for Proposal (RFP) for the indigenous Advanced Medium Combat Aircraft (AMCA) programme to shortlisted private firms.

    Shortlisted Firms

    • Larsen & Toubro + Bharat Electronics Limited combine
    • Tata Advanced Systems
    • Bharat Forge + BEML consortium

    About AMCA

    • India’s indigenous fifth-generation stealth fighter aircraft
    • Developed to meet long-term requirements of the Indian Air Force
    • Being designed by the Aeronautical Development Agency (ADA)

    Key Features

    • Stealth capability
      • Materials Used:
      • Carbon composites
      • Radar-absorbent coatings containing ferrite or iron ball paint
      • Composite polymers and graphene-based materials
    • Advanced avionics includes:
      • AESA radar
      • Sensor fusion
      • Electronic warfare suites
      • Helmet-mounted displays
    • Supercruise capability (Supersonic speed in Dry Thrust)
    • Next-generation combat systems

    Programme Highlights

    • Government plans to build five prototypes
    • Selected private company will partner with ADA
    • Part of the “Make in India” and defence indigenisation push
    • Hindustan Aeronautics Limited (HAL) reportedly excluded from current process

    Consider the following statements regarding the fifth-generation fighter jet configurations of India and Russia:
    1.The Sukhoi Su-57, Russia’s operational fifth-generation stealth fighter, features supercruise capabilities but utilizes conventional round exhaust nozzles.
    2.Under proposed partnerships, Russia has offered a twin-seat variant of the Su-57, which allows a second crew member to manage manned-unmanned teaming operations with stealth drones.
    3.India’s indigenous fifth-generation Advanced Medium Combat Aircraft (AMCA) is being developed and manufactured solely under the Defence Research and Development Organisation (DRDO), with zero foreign collaboration for its engines.
    Which of the statements given above is/are correct?

    [A] 1 and 2 only

    [B] 2 only

    [C] 1 and 3 only

    [D] 1, 2, and 3

  • New Evergreen Tree Species Discovered in Kerala

    Why in News?

    Scientists from Jawaharlal Nehru Tropical Botanic Garden and Research Institute discovered a new evergreen tree species, Humboldtia nairiana, in Shendurney Wildlife Sanctuary.

    About the Species

    • Belongs to the genus Humboldtia
    • Found in riparian forests of the southern Western Ghats
    • Named in honour of plant biotechnologist G.M. Nair

    Discovery

    • First collected during a 2010 floristic survey along the Cheenikkala-Pandimotta forest trail
    • Seedlings were conserved ex-situ at the JNTBGRI Arboretum
    • Flowering and fruiting observed in 2022
    • Morphological studies confirmed it as a new species

    Distribution

    • Strictly endemic to Kerala
    • Known only from the Agasthyamala Biosphere Reserve

    Conservation Status

    • Wild population is fragile and limited
    • Categorised as “Data Deficient” under IUCN criteria
    • Highlights need for habitat protection and field monitoring

    Ecological Importance

    • Adds to the biodiversity significance of the Western Ghats
    • Shows importance of riparian forest ecosystems
    • Strengthens conservation value of Agasthyamala region

    About Agasthyamala Biosphere Reserve

    • Part of the Western Ghats
    • UNESCO-recognised biosphere reserve
    • Known for high endemism and rich biodiversity

    [2019] “Neyyar, Peppara and Shendurney Wildlife Sanctuaries” are part of which of the following?

    [A] Agasthyamalai biosphere reserve

    [B] Nilgiri biosphere reserve

    [C] Seshachalam Hills

    [D] Panna biosphere reserve

  • Long-tailed Duskhawker Rediscovered in Arunachal Pradesh

    Why in News?

    A rare dragonfly species, the Long-tailed Duskhawker, has been rediscovered in Arunachal Pradesh after 110 years in Namdapha National Park and Tiger Reserve.

    About the Species

    • Scientific name: Gynacantha khasiaca
    • Belongs to the order Odonata (dragonflies and damselflies)
    • Known for:
      • Near 360° vision
      • Compound eyes with thousands of lenses
      • Ability to hover still in air

    Rediscovery

    • Last recorded in 1914 from the erstwhile Abor Hills
    • Rediscovered at Deban in Namdapha National Park in October 2024
    • Study published in the Journal of Threatened Taxa

    Ecological Importance of Dragonflies

    Dragonflies and damselflies are:

    • Predators and prey in freshwater ecosystems
    • Indicators of healthy aquatic habitats
    • Important for ecological balance

    Odonata Diversity

    • Global: 6,442 species across 693 genera
    • India: 504 species and 27 subspecies
    • Arunachal Pradesh: Around 110 species recorded

    Distribution of Long-tailed Duskhawker

    Apart from Arunachal Pradesh, reported from:

    • Assam
    • Maharashtra
    • Meghalaya
    • Uttarakhand
    • West Bengal

    Significance of Rediscovery

    • Highlights rich biodiversity of Northeast India
    • Emphasises habitat protection and biodiversity monitoring
    • Shows importance of citizen science in conservation

    About Namdapha National Park

    • Located in Changlang district, Arunachal Pradesh
    • One of India’s largest protected areas
    • Known for tropical rainforests and rich wildlife diversity

    [2017] Due to some reasons, if there is a huge fall in the population of species of butterflies, what could be its likely consequence/consequences?
    1. Pollination of some plants could be adversely affected.
    2. There could be a drastic increase in the fungal infections of some cultivated plants.
    3. It could lead to a fall in the population of some species of wasps, spiders and birds.
    Select the correct using the code given below:

    [A] 1 only

    [B] 2 and 3 only

    [C] 1 and 3 only

    [D] 1, 2 and 3

  • How safe is India’s critical national infrastructure

    Why in the News?

    India’s critical infrastructure security has come into focus amid rising concerns over cyber threats targeting IoT-enabled systems used in energy, transport, communications and industrial networks. Recently, there were warnings from India’s National Cyber Security Coordinator that highlight that traditional cyber defences are no longer adequate against increasingly sophisticated attacks on critical systems.

    What Constitutes Critical Infrastructure in India?

    Critical Information Infrastructure (CII): Systems whose incapacitation can severely impact national security, economy, public health or safety.

    Major Sectors

    1. Energy: Power grids, oil and gas networks.
    2. Transport: Railways, airports, ports and highways.
    3. Telecommunications: Internet backbone and communication networks.
    4. Banking & Finance: Payment systems and financial infrastructure.
    5. Healthcare: Hospital networks and medical databases.
    6. Strategic Systems: Defence, satellites and emergency services

    Why has digital transformation increased vulnerabilities in critical infrastructure?

    1. Digital Integration: Connects traditionally isolated infrastructure systems with internet-enabled networks, increasing exposure to cyber risks. Earlier, local control systems operated independently; today they function through networked environments.
    2. Automation Expansion: Enables predictive maintenance, remote monitoring and optimisation across power plants, chemical industries, transport systems and refineries. Greater connectivity, however, increases the possibility of remote compromise.
    3. IoT Proliferation: Expands attack surfaces through connected devices such as cameras, GPS systems, industrial controllers, water-level sensors and smart monitors that continuously exchange data.
    4. Systemic Dependence: Creates cascading risks because disruption in one sector may trigger failures across supply chains, communication networks and essential services.
    5. National Security Exposure: Converts technical vulnerabilities into strategic risks as attacks on infrastructure can disrupt economic stability and public order.

    How has the convergence of IT, OT and IoT transformed security risks?

    1. Information Technology (IT): Processes and stores digital data through servers, cloud systems and computational networks.
    2. Operational Technology (OT): Controls physical systems such as industrial machinery, transport systems and manufacturing plants.
    3. IoT Connectivity: Integrates physical infrastructure with digital control systems using sensors, controllers and automated devices.
    4. Control Vulnerability: Allows compromised IoT systems to manipulate physical operations. Breached devices may alter industrial controls or operational parameters.
    5. Invisible Threats: Creates hidden security risks through malicious firmware, embedded control pathways or hardware-level vulnerabilities.
    6. Trojan Risks: Enables insertion of concealed vulnerabilities that remain dormant but can later disrupt systems or facilitate surveillance.

    Why are conventional cybersecurity measures insufficient for critical infrastructure?

    1. Limited Scope: Cybersecurity measures such as server protection, anti-virus systems and breach prevention primarily secure digital layers but may not protect embedded physical systems.
    2. Physical-Digital Interdependence: Requires security frameworks that protect not only software but also hardware, sensors and communication pathways.
    3. Critical Infrastructure Sensitivity: Demands higher scrutiny because disruption may directly affect public safety and strategic operations.
    4. Procurement Gaps: Weak tender conditions often fail to prioritise trusted products or deep security evaluation.
    5. Compliance Weakness: Eligibility assessments frequently focus on paperwork rather than hardware authenticity, origin verification and operational vulnerability.
    6. Institutional Enforcement Deficit: Existing IT and IoT guidelines remain inadequately enforced for national-level infrastructure.

    Examples 

    1. SCADA Systems: Earlier local process control systems managed industrial operations through Supervisory Control and Data Acquisition systems; today many are internet-connected.
    2. CERT-In: Strengthens cyber response capacity through incident monitoring and emergency response protocols but does not fully secure infrastructure hardware.

    How do procurement and certification weaknesses create national security risks?

    1. Trusted Procurement Deficit: Allows deployment of imported systems without rigorous security verification.
    2. Security Evaluation Gaps: Weak scrutiny of design origin, manufacturing authenticity and operational vulnerabilities increases risk of embedded backdoors.
    3. Certification Challenges: Existing testing procedures remain lengthy and unevenly enforced across infrastructure sectors.
    4. Imported Device Risk: Raises concern over GPS-enabled electronic locks and communication systems manufactured abroad but deployed in sensitive supply chains.
    5. False Certification Concerns: Creates risks when imported products receive domestic certification despite unresolved security questions.

    Example 

    1. STQC Certification: Recent certification of cameras by Standardisation Testing and Quality Certification (STQC) ensures devices do not perform unintended control or data-sharing functions. However, certification remains time-consuming and inconsistently applied across IoT devices.

    Why is fuel transportation emerging as a major infrastructure vulnerability?

    1. Fuel Supply Digitisation: Integrates tankers with GPS tracking, digital monitoring and IoT-enabled electronic locking systems.
    2. Operational Dependence: Makes petroleum logistics increasingly dependent on remote communication technologies.
    3. Remote Disruption Risk: Creates vulnerability if vehicle tracking systems or e-locks are imported, compromised or improperly certified.
    4. Supply Chain Exposure: Enables interference with fuel distribution systems, affecting energy security and economic continuity.

    Example 

    1. Petroleum Tankers: Earlier protected through seals, locks and keys; now increasingly dependent on IoT-based keyless systems and GPS-enabled monitoring.
    2. Recent U.S. Case: A cyberattack on fuel storage systems reported by CNN demonstrates how attacks on energy systems can disrupt supply chains.

    How can India strengthen critical infrastructure resilience?

    1. Trusted Technology Ecosystem: Prioritises secure and trusted domestic technologies for sensitive sectors.
    2. Certification Enforcement: Ensures rigorous security testing for IoT devices deployed in national infrastructure.
    3. Supply Chain Security: Strengthens scrutiny of hardware origin, firmware integrity and manufacturing authenticity.
    4. Cyber-Physical Security Framework: Integrates IT, OT and IoT protection rather than treating cybersecurity as a software issue alone.
    5. Awareness Generation: Encourages industrial users, utilities and government agencies to recognise cyber risks in connected systems.
    6. Continuous Vigilance: Supports real-time monitoring and regular security audits of infrastructure networks.

    Conclusion

    India’s critical infrastructure is undergoing rapid digital transformation through automation, IoT and AI, improving efficiency and service delivery across sectors. However, increasing interconnection between digital and physical systems has also expanded vulnerabilities to cyberattacks, supply-chain risks and remote disruptions. In an era of connected systems, infrastructure resilience has become inseparable from national security and economic stability.

    PYQ Relevance

    [UPSC 2022] What are the different elements of cyber security? Keeping in view the challenges in cyber security, examine the extent to which India has successfully developed a comprehensive National Cyber Security Strategy.

    Linkage: The PYQ tests understanding of cyber security architecture, vulnerabilities and institutional preparedness in India’s digital ecosystem. The article expands the cyber security debate beyond data protection to critical infrastructure protection.

  • Vembanad Lake

    Why in the news?

    The Kerala government acted against houseboat pollution in Vembanad Lake following directions from the Kerala High Court.

    About Vembanad Lake

    • Largest lake in Kerala and longest lake in India
    • Largest tropical wetland ecosystem on India’s southwest coast
    • Also called Vembanad Kayal, Punnamada Lake, Kochi Lake
    • Spread across Alappuzha, Kottayam, and Ernakulam districts

    Source Rivers

    Fed by:

    • Pampa
    • Meenachil
    • Achankovil
    • Manimala

    Ecological Importance

    • Ramsar Site since 2002
    • Supports fisheries, biodiversity, flood control, and groundwater recharge
    • Part of National Wetlands Conservation Programme

    Agriculture

    • Famous for below sea-level farming in the Kuttanad region

    Tourism and Culture

    • Major part of Kerala backwaters tourism
    • Known for houseboats and inland water transport
    • Hosts Nehru Trophy Snake Boat Race in August

    [2022] Consider the following pairs : Wetland/Lake Location
    1. Hokera Wetland: Punjab
    2. Renuka Wetland: Himachal Pradesh
    3. Rudrasagar Lake: Tripura
    4. Sasthamkotta Lake: Tamil Nadu
    How many pairs given above are correctly matched?

    [A] Only one pair

    [B] Only two pairs

    [C] Only three pairs

    [D] All four pairs

  • Why is the Indian Rupee falling

    Why in the News?

    The Indian rupee recently crossed ₹96 per U.S. dollar in May 2025, compared to nearly ₹85 a year earlier. This marked a sharp depreciation amid global geopolitical tensions, foreign portfolio outflows, and rising import dependence.

    Why does the Indian rupee continue to depreciate despite India’s growing economy?

    1. Demand-Supply Dynamics: Currency prices depend on market demand relative to other currencies. A higher demand for dollars than rupees weakens the rupee.
    2. Import Dependence: India imports large quantities of crude oil, electronics, machinery, and industrial inputs, increasing demand for dollars.
    3. Trade Deficit: India’s imports consistently exceed exports, creating a merchandise trade deficit.
      1. Data Point: Merchandise trade deficit worsened from USD 244.9 billion (2023-24) to USD 286.9 billion (2024-25).
    4. Geopolitical Uncertainty: Global instability encourages investors to shift funds toward safer assets such as the U.S. dollar, strengthening it relative to emerging market currencies.
    5. Dollar Strength: Higher U.S. interest rates attract global capital into dollar-denominated assets.

    How does India’s Balance of Payments (BoP) shape the rupee’s exchange rate?

    India’s Balance of Payments (BoP) directly shapes the rupee’s exchange rate by determining the net demand and supply of foreign currency within the economy.

    1. Analyze Current Account ImpactThe Current Account reflects the net balance of trade in goods, services, and transfer payments
      1. Merchandise Trade Deficit: Increased from USD 244.9 billion (2023-24) to USD 286.9 billion (2024-25).
      2. Invisibles Surplus Buffers Rupee: Strong software services exports and remittances from workers abroad (especially West Asia) created a net invisible surplus rise from USD 218.8 billion to USD 263.9 billion. This creates massive inflows of foreign currency, supporting rupee stability.
      3. Net Deficit Weakens Rupee: Because the merchandise deficit outweighs the invisibles surplus, the overall current account remains in a deficit (CAD).
    2. Evaluate Capital Account Dynamics: The Capital Account tracks the flow of investment capital, loans, and banking capital across national borders.
      1. Financing the Gap: India relies on foreign capital inflows to bridge the CAD.
      2. FDI and Portfolio Inflows: Inflows from Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) demand Indian currency. Foreigners convert USD to INR to buy assets, which strengthens the rupee.
      3. External Borrowing Risks: Relying on short-term loans and external borrowings can cause sudden rupee volatility if global interest rates spike or investors pull funds out rapidly.
    3. Review Exchange Rate Outcomes: The final value of the rupee hinges on the net interaction between these two accounts.
    BoP Condition Market MechanismImpact on Indian Rupee
    Overall BoP SurplusCapital Inflows > Current Account DeficitAppreciates (Rupee strengthens)
    Overall BoP DeficitCapital Inflows < Current Account DeficitDepreciates (Rupee weakens)

    India’s BoP Snapshot (Figures in USD billion)

    Component2023-242024-25
    Current Account-26.1-23.1
    Merchandise Trade-244.9-286.9
    Invisibles218.8263.9
    Capital Account89.4116.6
    FDI54.24.52
    Loans6.529.3
    Others28.7-17.2
    Forex Reserves Change-63.7+5

    How do foreign capital outflows weaken the rupee?

    Foreign capital outflows weaken the rupee through a direct market mechanism of asset liquidation and currency conversion.

    1. The Conversion Mechanism: When foreign portfolio investors (FPIs) decide to exit the Indian market, they liquidate their holdings in domestic stocks and bonds. This process unfolds in two distinct steps that put downward pressure on the currency:
      1. Asset Liquidation: Investors sell Indian equities and debt instruments, receiving payments in Indian Rupees (INR).
      2. Currency Conversion: To repatriate their capital, these investors must immediately sell their newly acquired rupees in the foreign exchange market to buy US Dollars (USD).
    2. Supply and Demand Imbalance: The mass exit of foreign capital disrupts the equilibrium of the foreign exchange market:
      1. Surplus of Rupee: The market experiences a sudden, heavy supply of rupees as exiting investors rush to dump the currency.
      2. Scarcity of Dollars: Simultaneously, the demand for US dollars spikes sharply.
      3. Depreciation: According to standard economic laws of supply and demand, an oversupply of a currency combined with intense demand for a foreign counterparty currency causes the domestic currency (the rupee) to lose value.
    3. FPI vs. FDI Stability: The nature of the capital leaving the country dictates the severity of the exchange rate impact:
      1. High Volatility (FPI): Foreign Portfolio Investment is highly liquid and seeking short-term financial returns. It can exit a country almost instantly, earning it the label “hot money.” This makes FPI the primary driver of sudden, sharp currency depreciation during global market panics.
      2. Resilient Cushion (FDI): Foreign Direct Investment (FDI) involves long-term, physical investments like building factories or buying corporate infrastructure. Because these assets cannot be quickly liquidated, FDI remains stable during crises and serves as a critical structural anchor for the rupee.

    Why does a falling rupee become costly for India’s economy?

    1. Imported Inflation: Depreciation raises costs of imported goods.
    2. Oil Burden: India imports a substantial share of crude oil, making energy prices vulnerable to currency depreciation.
    3. Data Illustration: At ₹96 per dollar, purchasing USD 100 worth of oil requires ₹9,600, compared to ₹8,500 at ₹85 per dollar.
    4. Inflationary Transmission: Higher fuel costs increase logistics and transportation expenses across sectors.
    5. Manufacturing Constraints: Expensive imported raw materials raise production costs.
    6. Growth Trade-off: Depreciation may support exports but simultaneously increases import dependence.

    Does a weaker rupee improve India’s exports automatically?

    1. Export Competitiveness: A cheaper rupee can make Indian goods more affordable globally.
    2. Structural Constraints: Export gains remain limited when manufacturing competitiveness is weak.
      1. Even if the rupee depreciates from ₹96 to ₹120, export gains may remain modest due to supply-side constraints.
    3. Import Dependence in Manufacturing: Many exporters rely on imported inputs, reducing net gains from depreciation.

    What role does the Reserve Bank of India (RBI) play in defending the rupee?

    1. Forex Intervention: RBI sells dollars from reserves to reduce excessive rupee depreciation.
    2. Market Stabilisation: Dollar sales increase dollar supply in forex markets and support rupee demand.
    3. Forex Reserve Strength: India’s reserves stood at approximately USD 691 billion by March 2026, sufficient for around 10.8 months of imports.
    4. Intervention Evidence: RBI actively intervened during October 2024-January 2025 and August-December 2025.
    5. Limitation: RBI can moderate volatility but cannot permanently reverse depreciation caused by structural deficits.

    Why is oil dependency central to rupee vulnerability?

    1. Crude Oil Imports: India imports nearly 85% of its crude oil requirement, increasing dollar demand.
    2. External Vulnerability: Oil price shocks worsen trade deficits and strain forex reserves.
    3. Geopolitical Linkage: Conflicts in energy-producing regions raise crude prices, amplifying pressure on the rupee.
    4. Policy Imperative: Reducing oil dependence through renewables, EVs, ethanol blending, and domestic energy diversification strengthens currency stability.

    Conclusion

    The rupee’s depreciation reflects deeper structural realities of India’s external sector rather than merely short-term market fluctuations. Persistent trade deficits, dependence on imported oil, volatile portfolio flows, and geopolitical disruptions continue to pressure the currency. While RBI intervention and strong forex reserves provide temporary insulation, durable currency stability ultimately depends on strengthening exports, reducing import dependence, and improving external sector resilience.

    PYQ Relevance

    [UPSC 2018] How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India? 

    Linkage: The PYQ tests understanding of exchange rate volatility, external sector vulnerabilities, capital flows, and macroeconomic stability. The article explains how rupee depreciation, trade deficits, foreign capital outflows, geopolitical tensions, and dollar strengthening affect India’s macroeconomic stability and Balance of Payments. 

  •  First National Report on the Nagoya Protocol on ABS

    Why in the News?

    The Ministry of Environment, Forest and Climate Change released insights from India’s first national report on the Nagoya Protocol related to Access and Benefit Sharing (ABS), highlighting India’s progress in ensuring equitable sharing of benefits arising from biological resources.

    About the Nagoya Protocol

    • Adopted Under: Convention on Biological Diversity (CBD)
    • Objective: To ensure Fair and equitable sharing of benefits arising from the utilisation of genetic resources and associated traditional knowledge.

    What is Access and Benefit Sharing (ABS)?

    • ABS means: Users of biological resources must share benefits with:
      • Local communities
      • Indigenous groups
      • Traditional knowledge holders
    • Benefits can include:
      • Monetary compensation
      • Technology transfer
      • Community development
      • Conservation support

    Key Findings of the Report

    • Large-Scale Implementation Between 2017 and 2025: 12,830 ABS approvals granted.
    • India’s Global Contribution
    • India issued:
      • 3,556 Internationally Recognised Certificates of Compliance (IRCCs)
      • Around 60% of global issuance.
    • Revenue Generated: ₹216.31 crore realised by: National Biodiversity Authority (NBA)
    • Community Benefit: ₹139.69 crore disbursed to benefit claimers and local communities.

    [2023] Consider the following statements:
    1. In Biodiversity the India, Management Committees are key to the realization of the objectives of the Nagoya Protocol.
    2. The Biodiversity Management Committees have important functions in determining access and benefit sharing, including the power to levy collection fees on the access of biological resources within its jurisdiction.
    Which of the statements given above is/are correct?

    [A] 1 only

    [B] 2 only

    [C] Both 1 and 2

    [D] Neither 1 nor 2