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  • Innovation Ecosystem in India

    [20th June 2025] The Hindu Op-ed: Why India should address its propulsion gap

    PYQ Relevance:

    [UPSC 2020] What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.

    Linkage: The question regarding Indo-US and Indo-Russian defense deals is relevant because India’s propulsion gap directly influences its choices and reliance on these foreign defense partners for critical military hardware like engines. Addressing the propulsion gap would reduce this dependency, enabling India to better assert its strategic autonomy and contribute to regional stability (such as in the Indo-Pacific) without being constrained by external supply chain pressures or technology transfer limitations from other nations.

     

    Mentor’s Comment:  India’s Advanced Medium Combat Aircraft (AMCA) project is moving ahead quickly and is seen as a big step forward for the country’s aerospace sector. However, the excitement is being held back by a long-standing reliance on foreign engines. This same problem had earlier affected the HF-24 Marut and is now also troubling the LCA and AMCA fighter jet programs. Even after years of work and investment — including the unsuccessful Kaveri engine project and delays in getting engines from GE — India still depends heavily on other countries for engine technology. This not only affects military preparedness but also raises serious concerns about India’s ability to act independently in defence matters.

    Today’s editorial analyses the development of Indian fighter aircraft engines. This content would help in GS Paper II (International Relations) and GS Paper III (Science & Technology) in the mains Paper.

    _

    Let’s learn!

    Why in the News?

    Recently, there is growing excitement around India’s AMCA stealth fighter, seen as a major aerospace milestone. However, concerns remain due to a long-standing reliance on imported engines since the HF-24 Marut.

    Why has India failed to develop its own jet engine? 

    • Technological Challenges in Engine Design: Jet engines require high thrust-to-weight ratios, thermal stability, and advanced metallurgy, which India has struggled to achieve. Eg: The Kaveri GTX-35VS engine, under development since 1989 by DRDO-GTRE, failed to meet performance benchmarks in thrust and thermal management even after 3,000 hours of testing.
    • Lack of Core Materials and Manufacturing Capability: India lacks access to critical technologies like single-crystal turbine blades, thermal barrier coatings, and advanced cooling systems, essential for high-performance engines. Eg: Negotiations with GE for F414 engine hit a roadblock because GE refused full transfer of these core technologies despite India’s demand.
    • Fragmented and Short-Term Funding: Defence R&D funding in India is project-specific and often lacks a long-term strategic vision, affecting continuity and innovation in complex projects. Eg: Despite spending over ₹2,032 crore on the Kaveri project over 35 years, no operational engine was produced due to inconsistent support and shifting goals.
    • Over-Reliance on Foreign Engines: Dependence on foreign suppliers has created a complacency in indigenous R&D, slowing domestic capability-building. Eg: India continues to rely on GE F404 and F414 engines for its LCA Tejas variants, instead of pursuing an urgent push for domestic alternatives.
    • Institutional Inertia and Missed International Collaborations: Bureaucratic rigidity and institutional pride have caused India to reject key collaborative opportunities for engine co-development. Eg: A proposed joint project with Safran (France) for developing an engine for AMCA and Tejas MkII was reportedly declined by DRDO.

    What is HF-24 Marut?

    The HF-24 Marut (meaning “Spirit of the Tempest”) was India’s first indigenously designed and built fighter jet, developed in the 1950s and 1960s by Hindustan Aeronautics Limited (HAL).

    What caused the HF-24 Marut’s underperformance?

    • Underpowered Engine: The Marut was equipped with British Bristol Siddeley Orpheus 703 turbojets, which lacked the thrust needed for supersonic performance. Eg: Designer Kurt Tank had envisioned a more powerful engine, but it never materialised, severely restricting the aircraft’s speed and payload capabilities.
    • Failure to Acquire Suitable Alternatives: Despite multiple attempts, India could not procure or co-develop a more suitable engine to enhance the Marut’s performance. Eg: Efforts to source a better engine from Egypt and Germany failed, leaving the Marut stuck with the underpowered Orpheus units.
    • Operational Limitations in Combat: The aircraft performed well in ground-attack roles, such as in the 1971 war, but its overall combat effectivenesswas limited by its propulsion shortfall. Eg: Indian Air Force veterans cited that the engine limitation was the Marut’s Achilles’ heel, preventing it from evolving into a full-spectrum fighter.

    How does engine import dependency impact India’s defence?

    • Delays in Defence Production and Induction: Dependency on foreign engines leads to project delays when there are supply chain issues or export restrictions. Eg: Delivery of 99 General Electric F404 engines for the LCA Mk1A was delayed by 13 months, pushing back aircraft induction timelines.
    • Limited Operational and Strategic Autonomy: India becomes vulnerable to geopolitical pressures and foreign policy decisions of engine-supplying nations. Eg: U.S. reluctance to share core technologies like single-crystal turbine blades restricts India’s ability to upgrade or export its fighter aircraft.
    • Constraints on Defence Exports: Exporting platforms equipped with foreign engines requires third-party approvals, limiting India’s potential in global defence markets. Eg: India’s ability to export Tejas is restricted by U.S. controls on the GE F404 engine, limiting defence diplomacy options.

    What are the steps taken by the Indian Government? 

    • Strategic Collaborations for Technology Transfer: India has initiated joint ventures and international collaborations to acquire advanced propulsion technology. Eg: During PM Modi’s 2023 U.S. visit, HAL signed a deal with General Electric to co-produce GE F414 enginesin India for the LCA Mk2 and AMCA programs.
    • Revival of Indigenous Engine Projects: The government has revived and restructured efforts to develop indigenous jet engines under DRDO’s GTRE. Eg: The Kaveri engine project was decoupled from the LCA program and is being explored for use in UAVs and future aircraft with potential foreign assistance.
    • Promotion of Atmanirbhar Bharat in Defence: The Defence Ministry has prioritized self-reliance in critical technologies, including aero-engines, under the Atmanirbhar Bharat initiative. Eg: Several defence PSUs and private players have been incentivized to develop components and sub-systemsfor aerospace platforms under Make in India schemes.

    What must India do to achieve propulsion self-reliance? (Way forward)

    • Establish Strategic Global Partnerships for Technology Transfer: India must engage in joint ventures with trusted international engine manufacturers to acquire critical technologies like single-crystal turbine blades and thermal barrier coatings. Eg: The proposed GE-HAL deal to manufacture the F414 engines in India should ensure full transfer of know-how to avoid long-term dependency.
    • Develop an Integrated Indigenous R&D Ecosystem: India needs to create a cohesive framework connecting DRDO, GTRE, academia, and private industry to focus on advanced propulsion R&D with long-term investment. Eg: Encouraging private sector participation in defence through the Innovations for Defence Excellence (iDEX)platform can accelerate jet engine innovation.

     

  • Liquor Policy of States

    The unregulated drink: rethinking alcohol control in India

    Why in the News?

    India’s rising alcohol use is not just a health issue — it is a major national problem affecting many areas. Even though experts say no amount of alcohol is safe, about one in four Indian men drink. Drinking heavily and often is now becoming more common across the country.

    What are the key risks of alcohol consumption in India?

    • Health Risks and Non-Communicable Diseases (NCDs): Alcohol significantly increases the risk of cancer, liver disease, cardiovascular issues, and mental illnesses. Eg: Chronic alcohol use is a leading cause of liver cirrhosis and is linked to mouth and throat cancers in India.
    • Injuries and Accidents: Alcohol impairs judgement and coordination, leading to road accidents, falls, and workplace injuries. Eg: A large number of road traffic fatalities in India are associated with drunk driving, particularly among youth.
    • Mental Health and Suicide: Alcohol contributes to depression, anxiety, and is a major risk factor for suicide. Eg: The National Suicide Prevention Strategy (2022) identified alcohol use as a key driver of suicides in India.
    • Violence and Crime: Alcohol consumption is linked with domestic violence, sexual assault, and violent crimes. Eg: NFHS-5 data shows higher incidence of domestic violence in households where alcohol is consumed regularly.
    • Economic and Social Burden: Alcohol use contributes to ₹6.24 trillion in societal costs (2021), including healthcare, lost productivity, and law enforcement. Eg: The burden of alcohol-related diseases adds pressure to India’s public health system, particularly in rural areas.

    Why is a national alcohol policy necessary?

    • Fragmented and Inconsistent State Regulations: Alcohol laws, legal drinking age, pricing, and prohibition vary widely across States, causing regulatory confusion and uneven implementation. Eg: Bihar enforces prohibition, while States like Kerala promote toddy as a “natural beverage” under its Akbari Policy.
    • Public Health Emergency: Rising alcohol consumption is linked to cancer, mental illness, suicides, and injuries, posing a major national health burden. Eg: In 2021, alcohol-related harm caused 2.6 million DALYs and cost India ₹6.24 trillion in societal losses.
    • Lack of Centralised Coordination and Accountability: Regulatory responsibility is scattered across multiple ministries with no unified approach, weakening policy impact. Eg: Demand reduction is handled by the Ministry of Social Justice, while supply and harm reduction are spread across Health, Finance, and Home Affairs ministries.

    Who regulates alcohol demand and supply in India?

    • State governments: Regulate production, distribution, pricing, sale, and consumption.
    • Ministry of Social Justice: Leads demand reduction (e.g., Nasha Mukta Bharat Abhiyan).
    • Ministries of Home Affairs, Finance, and Health: Handle supply and harm reduction.
    • No single authority: Regulatory efforts are scattered and lack coordination.

    How do marketing and digital platforms influence alcohol use?

    • Surrogate Advertising and Brand Promotion: Despite legal restrictions, alcohol brands use surrogate advertising, brand sponsorships, and strategic product placements to maintain visibility. Eg: Alcohol brands often sponsor music festivals and sports events, indirectly promoting their products to younger audiences.
    • Social Media and Algorithmic Amplification: Social media algorithms boost alcohol-related content (ARC), while “alcohol influencers” glamorize drinking and normalize it among youth. Eg: Platforms like Instagram and YouTube promote posts showing alcohol as part of a luxury lifestyle, increasing its social appeal.
    • Attractive Packaging and Retail Tactics: Use of sleek bottles, premium branding, and Happy Hour deals enhance the aspirational value of alcohol and make it more appealing. Eg: Pre-mixed cocktails and flavoured spirits are marketed to attract young and first-time users.

    Way forward: 

    • Formulate a Unified National Alcohol Control Policy: Develop a comprehensive, evidence-based policy that aligns efforts across States and Central ministries, focusing on public health, harm reduction, and regulation of digital content.
    • Invest in Public Awareness and Education: Launch large-scale awareness campaigns highlighting the health risks of alcohol, similar to tobacco control programs, to shift social norms and perceptions. Eg: Educating youth on links between alcohol and mental illness, cancer, and poverty can reduce its aspirational appeal.

    Mains PYQ:

    [UPSC 2024] In a crucial domain like the public healthcare system, the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public health care at the grassroots level.

    Linkage: This article explicitly highlights alcohol consumption as a significant public health issue in India, leading to injuries, mental illness, non-communicable diseases like cancer, and contributing to approximately 2.6 million Disability-Adjusted Life Years (DALYs) in 2021.

  • Forest Conservation Efforts – NFP, Western Ghats, etc.

    All about the revised Green India Mission to increase forest cover, address climate change

    Why in the News?

    The revised plan for the Green India Mission (GIM), released by the Centre on June 17, is an important step forward in India’s fight against climate change.

    What are the achievements of the Green India Mission since its launch in 2014?

    • Large-scale Afforestation Activities: GIM facilitated tree plantation and afforestation across 11.22 million hectares between 2015–16 and 2020–21. Eg: Afforestation under state schemes in Andhra Pradesh and Telangana helped increase green cover.
    • Support to Vulnerable States: Funds were allocated based on ecological vulnerability and restoration potential. Eg:624.71 crore released to 18 states between 2019–24, with ₹575.55 crore utilised.
    • Carbon Sequestration Contribution: Contributed to creating an additional carbon sink of 2.29 billion tonnes of CO₂ equivalent between 2005–2021. Eg: Forest restoration in Jharkhand and Chhattisgarh aided national climate goals.
    • Integration with Climate Goals: GIM aligned with India’s international commitment to restore 26 million hectares of degraded land by 2030. Eg: Activities under GIM complement India’s UNFCCC goals on land restoration and carbon capture.
    • Livelihood Enhancement through Forest-Based Interventions: Helped improve livelihoods of forest-dependent communities via sustainable forestry practices. Eg: Community plantation models in Odisha created jobs and promoted conservation.

    What are the key elements of the revised Green India Mission roadmap?

    • Landscape-level restoration: Focus on saturation-based, area-specific restoration in vulnerable landscapes like the Aravallis, Western Ghats, Himalayas, and mangroves.
    • Integration with flagship projects: Syncing with initiatives like the Aravalli Green Wall project (cost: Rs 16,053 crore, coverage: 6.45 mha across 29 districts and 4 states).
    • Aravalli protection: Targeting 8 lakh hectares for forest, water system and grassland rejuvenation to curb sandstorm intrusions and pollution in NCR and Punjab.
    • Western Ghats focus: Addressing illegal mining and deforestation through afforestation and abandoned mine rehabilitation.

    Why was the Green India Mission’s roadmap revised?

    • To Address On-Ground Climate Impacts: The revision was made to respond to changing climate conditions and the increasing urgency of land degradation and desertification. Eg: Inclusion of the Aravalli Green Wall Project to counter desert expansion from the Thar region.
    • To Incorporate Feedback from States and Scientific Bodies: The revised plan reflects inputs from implementing states and scientific institutions, ensuring region-specific solutions. Eg: Feedback led to the addition of eco-restoration of abandoned mining areas in the Western Ghats.
    • To Focus on Region-Specific Restoration Practices: The update prioritises landscape-specific and ecologically appropriate restoration in vulnerable ecosystems. Eg: Special emphasis on Himalayas, mangroves, and degraded zones for carbon sequestration and biodiversity conservation.

    What key regions will it now focus on?

    Who is implementing the Green Wall project?

    • Central Government Leadership: The Centre (Government of India) is spearheading the initiative, allocating funding and coordinating implementation across states. Eg: The project’s ₹16,053 crore budget and planning is directed by central agencies in collaboration with local authorities.
    • Collaboration with States and Scientific Institutions: Implementation involves three states (Haryana, Rajasthan, Gujarat), one UT (Delhi)  and guidance from the Wildlife Institute of India (WII), using ecological data to target 12 degradation gaps in the Aravalli range. Eg: WII studies identified dust-prone regions; restoration covers 8 lakh hectares across 29 districts in these states.

    How will GIM address land degradation and carbon sequestration?

    • Restoration of Degraded and Open Forests: GIM focuses on restoring impaired open forests, which is a cost-effective and high-impact method for carbon dioxide (CO₂) sequestration. Eg: As per the Forest Survey of India (FSI), restoring 15 million hectares can sequester 1.89 billion tonnes of CO₂.
    • Region-Specific Ecological Interventions: The revised roadmap includes landscape-specific afforestation and eco-restoration in vulnerable areas like the Aravallis, Western Ghats, Himalayas, and mangroves. Eg: Under the Aravalli Green Wall Project, 8 lakh hectares will be restored to combat desertification and reduce dust pollution.
    • Expansion of Natural Carbon Sinks: GIM aligns with India’s climate commitment to create an additional carbon sink of 2.5 to 3 billion tonnes of CO₂ by 2030. Eg: By integrating schemes and intensifying plantation efforts, GIM aims to expand forest and tree cover up to 24.7 million hectares, capturing 3.39 billion tonnes of CO₂.

    Way forward: 

    • Integrated Landscape-Based Planning: Adopt a holistic, ecosystem-specific approach by aligning GIM with other environmental programs (e.g., CAMPA, MGNREGS) for coordinated restoration and afforestation efforts.
    • Enhanced Monitoring and Community Participation: Use technology (GIS, remote sensing) for real-time progress tracking, while empowering local communities and forest-dependent groups for sustainable upkeep and livelihood generation.

    Mains PYQ:

    [UPSC 2020] Examine the status of forest resources of India and its resultant impact on climate change.

    Linkage: This question directly relates to the core objectives and context of the Green India Mission (GIM). The GIM, launched in 2014, is a crucial component of India’s efforts to combat climate change by increasing forest and tree cover and restoring degraded ecosystems. The revised roadmap for GIM emphasizes not only increasing and restoring forest and green cover but also tackling land degradation and desertification, which are significant environmental issues in India.

  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    FASTag Annual Pass Scheme

    Why in the News?

    Union Transport Minister announced a new FASTag-based Annual Pass system for private non-commercial vehicles (cars, jeeps, vans) to ensure smoother travel across National Highways.

    What are FASTags?

    • FASTag is a contactless toll payment system that uses Radio Frequency Identification (RFID) technology to enable automatic toll collection at National Highway toll plazas.
    • Managed by the National Highways Authority of India (NHAI) and National Payments Corporation of India (NPCI), it was launched in 2014 and became mandatory in 2021 for all four-wheeled vehicles.
    • It is a sticker affixed on a vehicle’s windshield, linked to a prepaid wallet or savings account. Toll charges are automatically deducted when the vehicle passes through an electronic toll gate.
    • It enhances convenience, reduces traffic congestion, and promotes digital payments across India’s highway network.
    • As per the Motor Vehicles Rules, FASTags are mandatory for all new four-wheelers and necessary for renewal of fitness certificates and national permits.

    About the FASTag Annual Pass Scheme:

    • Overview: It is a new initiative announced by the Ministry of Road Transport and Highways to provide cost-effective and hassle-free travel for private non-commercial vehicles.
    • Implementation: The pass will be effective from August 15, 2025, and is optional, intended for cars, jeeps, and vans (not for commercial vehicles).
    • Objectives: The scheme is designed to reduce per-trip costs (as low as ₹15/toll) and provide savings of up to ₹7,000 annually for frequent travelers.
    • Benefits: It allows unlimited passage at National Highway (NH) and National Expressway (NE) toll plazas for either:
      • One year, or
      • 200 toll crossings, whichever is earlier.

    Key Features:

    • Eligibility: Applicable only for non-commercial private vehicles with a valid, active FASTag linked to a registered vehicle number.
    • Activation: Can be activated via the Rajmargyatra mobile app or NHAI website with a one-time payment of ₹3,000 for FY 2025–26.
    • Validity: Covers 200 trips or one year and then reverts to regular FASTag mode unless renewed.
    • Trip Count:
      • Point-based plazas: Each pass counts as one trip per crossing.
      • Closed toll systems: Entry and exit combined count as one trip.
    • Transfer Restrictions: The pass is non-transferable and valid only for the vehicle on which the FASTag is registered.
    • Coverage: Valid only at NH and NE toll plazas managed by the Centre. It does not apply to state highway or local toll plazas.
    • Fee Revision: The base fee may be revised annually starting April 1 every year.
    • Existing Users: No need for a new FASTag if one is already affixed and active. The pass can be added on top of the existing tag after eligibility verification.
    [UPSC 2023] With reference to India’s projects on connectivity, consider the following statements:

    1. East-West Corridor under Golden Quadrilateral Project connects Dibrugarh and Surat.

    2. Trilateral Highway connects Moreh in Manipur and Chiang Mai in Thailand via Myanmar.

    3. Bangladesh-China -India -Myanmar Economic Corridor connects Varanasi in Uttar Pradesh with Kunming in China. How many of the above statements are correct? Options: (a) Only one (b) Only two (c) All three (d) None*

     

  • Indian Navy Updates

    Navy inducts INS Arnala

    Why in the News?

    INS Arnala, the first Anti-Submarine Warfare Shallow Water Craft (ASW-SWC), was officially commissioned into the Eastern Naval Command at the Naval Dockyard, Visakhapatnam.

    About INS Arnala:

    • What is it: INS Arnala is the first Anti-Submarine Warfare Shallow Water Craft (ASW-SWC) commissioned into the Eastern Naval Command on June 18, 2025, at Visakhapatnam.
    • Behind the name: It is named after the historic Arnala Fort near Vasai, Maharashtra.
    • Development: The vessel was designed by Garden Reach Shipbuilders & Engineers (GRSE) and built in partnership with L&T Shipbuilders under a Public-Private Partnership (PPP) model.
    • Project: It marks the beginning of the induction of 16 ASW-SWC class ships, aimed at enhancing India’s shallow water anti-submarine capabilities.

    Key Features:

    • Propulsion: 77.6 metres long; first Indian Navy warship powered by a Diesel Engine-Waterjet combination.
    • Indigenous Content: Over 80% indigenous systems, with contributions from BEL, L&T, Mahindra Defence, and over 55 MSMEs.
    • Arsenal: Equipped with a single centreline rocket launcher, lightweight torpedoes, anti-torpedo decoys, and mine-laying systems.
    • Sensor Suite: Incorporates Hull-Mounted Sonar (Abhay), Low-Frequency Variable Depth Sonar (LFVDS), and Underwater Acoustic Communication System (UWACS).
    • Multi-role Capability: Designed for ASW operations, Search and Rescue (SAR), low-intensity maritime operations, and subsurface surveillance in shallow coastal waters.

    Significance:

    • Strategic Defence Upgrade: Replaces ageing Abhay-class corvettes and significantly strengthens India’s anti-submarine warfare posture.
    • Enhanced Coastal Security: Ideal for detecting midget submarines and Unmanned Underwater Vehicles (UUVs) in waters less than 30 metres deep, where larger warships struggle to operate.
    • Make-in-India Milestone: Demonstrates India’s growing self-reliance in defence manufacturing and contributes to the Aatmanirbhar Bharat initiative.
    [UPSC 2016] Which one of the following is the best description of ‘INS Astradharini’, that was in the news recently?

    Options: (a) Amphibious warfare ship (b) Nuclear-powered submarine (c) Torpedo launch and recovery vessel* (d) Nuclear-powered aircraft carrier

     

  • Nuclear Diplomacy and Disarmament

    Nuclear Non-Proliferation Treaty (NPT)

    Why in the News?

    Amid intensifying war with Israel, Iran’s Parliament began drafting a Bill to exit the Nuclear Non-Proliferation Treaty (NPT).

    About Nuclear Non-Proliferation Treaty (NPT):

    • Overview: It is a global agreement aimed at preventing the spread of nuclear weapons, promoting peaceful nuclear energy, and advancing nuclear disarmament.
    • Enforcement: It was opened for signature on June 12, 1968, and came into force on March 5, 1970.
    • Nature of the Treaty: It is the only binding international treaty that requires NWS to pursue disarmament.
    • Categorization of States: The treaty distinguishes between Nuclear Weapon States (NWS) and Non-Nuclear Weapon States (Non-NWS).
    • Key Features:
      • Definition of NWS: Countries that had tested nuclear weapons before January 1, 1967 (US, UK, France, Russia, China).
      • Obligations: NNWS agree not to manufacture or acquire nuclear weapons; NWS pledge not to transfer nuclear weapons or assist non-NWS in acquiring them.
      • Peaceful Use Clause: All parties are allowed to develop nuclear energy for peaceful purposes, under IAEA safeguards.
      • Monitoring Agency: The International Atomic Energy Agency (IAEA) verifies compliance through inspections and reporting.
      • Withdrawal Clause: Article 10 allows a country to withdraw with 3 months’ notice if national interests are jeopardized.

    India and NPT:

    • India is NOT a signatory to the NPT and has consistently refused to join, calling it discriminatory.
    • India argues that the treaty legitimizes nuclear weapons in the hands of five countries while denying them to others.
    • India conducted its first nuclear test in 1974 (Smiling Buddha) and maintains a “No First Use” policy.
    • Despite being outside the NPT, India is regarded as a responsible nuclear power and adheres to non-proliferation norms.

    Non-members of NPT, Countries Planning to Leave:

    • Non-signatories:
      • India and Pakistan have never signed the treaty, but both possess nuclear weapons.
      • Israel is also a non-signatory and maintains strategic ambiguity about its nuclear weapons.
      • South Sudan remains a non-signatory without known nuclear ambitions.
    • Countries that withdrew or are planning to:
      • North Korea signed in 1985, withdrew in 2003, and went on to develop nuclear weapons.
      • Iran, though a signatory since 1970, has recently threatened to withdraw, citing IAEA censure and security concerns linked to its tensions with Israel.
      • If Iran leaves, it would end IAEA inspections and raise fears of a nuclear arms race in the Middle East.
    [UPSC 2018] What is/are the consequence/consequences of a country becoming the member of the ‘Nuclear Suppliers Group’?

    1. It will have access to the latest and most efficient nuclear technologies.

    2. It automatically becomes a member of “The Treaty on the Non-Proliferation of Nuclear Weapons (NPT)”. Which of the statements given above is/are correct?

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

     

  • Start-up Ecosystem In India

    What is Reverse-Flipping?

    Why in the News?

    SEBI has introduced key regulatory relaxations to ease IPO norms and incentivize startups to shift their legal base back to India through reverse-flipping.

    About Reverse-Flipping:

    • Reverse-flipping refers to the process by which Indian startups that were earlier incorporated abroad shift their domicile back to India, making India their legal and operational headquarters.
    • It allows Indian companies to access domestic capital markets, reduce compliance complexity, and align with the evolving global tax and regulatory environment.
    • This shift helps startups tap Indian stock exchanges, reduce reliance on foreign jurisdictions, and benefit from a favorable Indian regulatory ecosystem.

    Types of Reverse-Flipping

    1. Share Swap Arrangement:
      • In this structure, shareholders of the foreign parent company exchange their shares for shares in the Indian subsidiary.
      • This process may trigger capital gains tax under the Income Tax Act, 1961, especially for Indian shareholders.
    1. Inbound Merger (Cross-Border Merger):
      • The foreign parent company merges with its Indian subsidiary, with the Indian entity becoming the surviving legal structure.
      • If all conditions under the Foreign Exchange Management Act (FEMA), the Companies Act, 2013, and National Company Law Tribunal (NCLT) are met, this merger route can be tax-neutral.

    Key Features:

    • Domestic Listing Access: Startups gain access to Indian IPO markets and valuations.
    • Simplified Compliance: Reduced legal and regulatory complications from operating across jurisdictions.
    • Investor Incentives: SEBI now allows foreign venture funds and AIFs to be counted towards minimum promoter contribution in public issues.
    • ESOP Relaxation: SEBI has allowed promoters/founders to retain Employee Stock Option Plans (ESOPs) granted one year prior to the filing of the Draft Red Herring Prospectus (DRHP).
    • Capital Market Boost: The move supports India’s goal to become a global startup and financial hub by encouraging reverse-flipping.
    • Tax & Legal Alignment: Shifting domicile can help startups comply better with Indian tax and business laws.

    Note:

    Employee Stock Option Plans (ESOPs) are structured benefit schemes that grant employees the right to purchase shares of their company at a predetermined price—known as the exercise price—after completing a specific period.

     

    [UPSC 2025] Consider the following statements:

    Statement I: As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.

    Statement II: Bondholders are lenders to a company whereas stockholders are its owners.

    Statement III: For repayment purpose, bondholders are prioritized over stockholders by a company.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement II and Statement III are correct and both of them explain Statement I *

    (b) Both Statement I and Statement II are correct and Statement I explains Statement II

    (c) Only one of the Statements II and III is correct and that explains Statement I

    (d) Neither Statement II nor Statement III is correct

     

  • The Crisis In The Middle East

    [19th June 2025] The Hindu Op-ed: Why are oil prices rising amid Iran-Israel war?

    PYQ Relevance:

    [UPSC 2018] In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation?

    Linkage: This question explicitly links “escalating tensions between Iran and Israel” to oil prices “spiralling upwards” due to fears of “potential disruption in oil supplies globally”. The article talks about the Iran’s threats to close the Strait of Hormuz as the “primary reason” for rising prices, as this chokepoint is crucial for transporting a significant portion of global petroleum liquids and oil supply from the Persian Gulf to the Arabian Sea.

     

    Mentor’s Comment:  Oil prices have jumped sharply due to rising tensions between Iran and Israel, mainly because of fears that the Strait of Hormuz — a key route for global oil supply — could be blocked. Brent crude prices rose by 9%, showing how sensitive global markets are to such conflicts. Although prices eased slightly after news of diplomatic talks through Gulf countries, the threat of disruption still remains. For India, which buys over 80% of its oil from abroad, this is a serious concern. It affects not just fuel availability, but also inflation, economic stability, and business investments, making it a major challenge for India’s economy.

    Today’s editorial analyses the impact of tensions between Iran and Israel on crude oil prices. This content would help in GS Paper II (International Relations) and GS Paper III (Indian Economy) in the mains Paper.

    _

    Let’s learn!

    Why in the News?

    Recently, oil prices have risen a lot because of increasing tension between Iran and Israel, mainly due to worries that the Strait of Hormuz — a major route for global oil transport — might be closed.

    Why is the Strait of Hormuz vital for global oil trade?

    • Major Oil Transit Chokepoint: The Strait of Hormuz is one of the world’s most important maritime chokepoints, through which nearly 20 million barrels per day (mb/d) of oil passed in 2024 — about one-fifth of global consumption. Eg: The U.S. Energy Information Administration (EIA) reported that the strait handled the world’s largest oil tankers transporting oil from Gulf nations.
    • Exports from Key Producers: It serves as the primary export route for major oil-producing countries such as Saudi Arabia, Iran, UAE, Kuwait, Iraq, and Qatar. Eg: According to the International Energy Agency (IEA), about one-fourth of the global oil supply exits the Gulf through this strait.
    • Dependency of Asian Markets: A significant portion of oil transiting the Strait goes to Asian economies, which are heavily dependent on West Asian oil. Eg: In 2024, 84% of crude oil and 83% of liquefied natural gas (LNG) transported via the Strait was destined for countries like India, China, Japan, etc.

    What are the economic implications of the Israel-Iran conflict on India’s growth and inflation?

    • Rising Crude Oil Prices Increases Import Costs: A spike in global oil prices due to the conflict raises India’s import bill, as the country imports over 80% of its crude oil needs. Eg: Brent crude surged to $78.50/barrel in June 2024 amid Israel-Iran tensions, directly increasing India’s energy costs and widening the current account deficit.
    • Pressure on Inflation and Input Costs: Higher oil prices translate into increased transportation and production costs, leading to inflationary pressure on goods and services. Eg: Experts like Amit Kumar of Grant Thornton noted that global price shocks could affect India Inc’s profitability and raise inflation even though India doesn’t import oil directly from Iran.
    • Threat to GDP Growth Projections: Prolonged geopolitical instability may lead to delayed private investments and lower industrial output, affecting economic growth. Eg: ICRA’s Chief Economist, Aditi Nayar, warned that a sustained oil price rise could prompt a downward revision of India’s 6.2% GDP growth forecast for FY25.

    How has India reduced its vulnerability to oil price shocks amid West Asian tensions?

    • Diversification of Crude Oil Import Sources: India has expanded its import basket beyond traditional Gulf suppliers to include countries like the U.S., Russia, and Latin American nations. Eg: Union Petroleum Minister Hardeep Singh Puri stated that India is “comfortably placed” due to diversified crude sourcing, reducing overdependence on West Asia.
    • Strategic Petroleum Reserves (SPR): India has built strategic oil reserves to buffer against short-term supply disruptions or price spikes. Eg: The Indian Strategic Petroleum Reserves Ltd (ISPRL) manages reserves that can support 9–10 days of crude demand, offering resilience during crises.
    • Promoting Renewable Energy and Domestic Production: India is ramping up solar, wind, and ethanol-blended fuels to lower long-term reliance on imported oil. Eg: Initiatives like PM-KUSUM and National Bio-Energy Mission aim to reduce fossil fuel dependence and enhance energy security.

    What are the key drivers of the recent oil price surge?

    • Geopolitical Tensions Between Iran and Israel: The escalation in Israel-Iran conflict, including threats to close the Strait of Hormuz, triggered fears of significant supply disruptions, sending oil prices sharply upward. Eg: Brent crude shot up nearly 9% on June 13, reaching $75.65 per barrel, after heightened tensions.
    • Strait of Hormuz Chokepoint Risk: As a critical maritime chokepoint, any threat to close the Strait could drastically affect global oil flow and increase shipping and insurance costs, contributing to higher prices. Eg: Iran’s repeated threats to disrupt transit through the Strait instilled market anxiety, pushing Brent to an intraday high of $78.50 per barrel.
    • Supply Constraints Due to Sanctions and Regional Export Bottlenecks: U.S. sanctions on Iranian oil exports and potential disruptions to routes via the Suez Canal or Red Sea limit available global supply, exacerbating price volatility.

    Who ensures safe oil transit through Hormuz?

    • United States Navy – Fifth Fleet: The U.S. Navy’s Fifth Fleet, based in Bahrain, regularly patrols the Strait to deter threats like piracy or military aggression, especially from Iran. Eg: In 2019, after Iranian threats, the U.S. deployed additional naval assets to escort commercial tankers through Hormuz.
    • International Maritime Security Construct (IMSC): A coalition of Western and Gulf nations, including the UK, Saudi Arabia, and Bahrain, established the IMSC to protect freedom of navigation in the Gulf region. Eg: The UK Royal Navy has deployed warships like HMS Montrose to escort oil tankers through Hormuz during periods of heightened tension.

    What global actions can reduce related risks? (Way forward)

    • Strengthening Multilateral Naval Patrols: Enhancing joint maritime security through coalitions like the International Maritime Security Construct (IMSC) can deter potential blockades and ensure safe passage. Eg: The U.S. and UK-led naval missions in 2019 escorted oil tankers after Iran’s threats, maintaining uninterrupted oil flow.
    • Diversifying Global Oil Supply Routes: Investing in alternative pipelines and trade routes (e.g., via Red Sea or land-based pipelines) reduces overdependence on chokepoints like Hormuz. Eg: The UAE’s Habshan-Fujairah pipeline bypasses the Strait and delivers oil directly to the Arabian Sea, reducing exposure to disruption.
  • Electoral Reforms In India

    Now is the time to disclose the entire truth known to the ECI

    Why in the News?

    The controversy over the 2024 Maharashtra Vidhan Sabha elections and how Election Commissioners are appointed has sparked a major debate about the Constitution and democracy in India.

    Why is the ECI appointment process seen as favouring the executive?

    • Majority Control by the Executive in the Selection Committee: The 2023 Election Commissioners Appointment Act provides a 2:1 majority to the executive in the selection committee — comprising the Prime Minister, the Home Minister, and the Leader of the Opposition. Eg: The Leader of the Opposition can always be outvoted, effectively giving the ruling party full control over appointments.
    • Exclusion of the Chief Justice of India (CJI): Despite a Supreme Court directive in March 2023 recommending the inclusion of the CJI to ensure neutrality, the Act excluded the judiciary, reducing checks and balances. Eg: The SC judgment established a temporary mechanism including the CJI until Parliament enacted a law, but the law ignored this safeguard.
    • Conflict of Interest: The executive, being an election contestant, is involved in selecting the very institution that is supposed to referee the elections, raising concerns about institutional bias. Eg: The same political leadership responsible for contesting elections now appoints the “umpires” (Election Commissioners).
    • Lack of Public Consultation or Parliamentary Debate: The 2023 Act was passed with minimal debate and without bipartisan consensus, reinforcing the perception of executive overreach. Eg: Opposition parties and civil society groups raised concerns about non-consultative law-making affecting the ECI’s independence.
    • Pending Legal Challenge on Constitutional Grounds: The Act’s constitutionality is under challenge in the Supreme Court, suggesting broader concern that it violates the principles of free and fair elections under Article 324. Eg: Petitions argue that the current process undermines the ECI’s autonomy and may violate the basic structure doctrine.

    How does limited access to Form 17C affect poll transparency?

    • Restricts Independent Verification of Votes: Limited access to Form 17C, which contains vote counts and voter turnout data, prevents candidates and citizensfrom verifying the accuracy of polling results. Eg: Only candidates or their polling agents receive the form, and not all candidates—especially independents or smaller parties—can afford agents at every booth.
    • Blocks Public Scrutiny and Research: Without public access to Form 17C data from all polling stations, researchers, media, and civil society cannot conduct independent audits or identify discrepancies in vote tallies. Eg: Voters and watchdog groups are unable to cross-check vote counts with final results, undermining transparency.
    • Raises Suspicion of Electoral Manipulation: The opaque handling of Form 17C can fuel doubts about the integrity of the electoral process, especially in close contests or in regions with a history of irregularities. Eg: In the absence of uniform disclosure, accusations of mismatched vote counts or tampering are harder to disprove, affecting public trust in the Election Commission.

    Why is the Supreme Court’s role in ECI appointments significant?

    • Upheld Democratic Values and Institutional Neutrality: The Supreme Court’s March 2023 judgment ensured a balanced selection committee by including the Chief Justice of India (CJI), reducing the risk of executive control over the Election Commission of India (ECI).  
    • Acted as a Constitutional Corrective in Legislative Vacuum: In the absence of a law under Article 324, the Court stepped in to lay down norms for appointments, reinforcing the judiciary’s role as guardian of the Constitution. Eg: The SC cited Parliament’s inaction despite multiple committee recommendations and exercised its powers to protect the integrity of electoral democracy.

    What reforms can enhance transparency in India’s electoral system? (Way forward) 

    • Reform the ECI Appointment Process for Institutional Neutrality: Include the Chief Justice of India (CJI) in the selection committee for appointing the Chief Election Commissioner (CEC) and Election Commissioners, ensuring independence from executive influence. Eg: The Supreme Court’s 2023 judgment proposed a panel of the PM, Leader of Opposition, and CJI, but the 2023 ECI Act excluded the CJI, raising concerns over impartiality.
    • Ensure Public Access to Form 17C for Vote Transparency: Mandate that Form 17C, which records total votes polled, be made publicly accessible through an official digital portal, enabling citizens and researchers to verify poll data. Eg: Currently, only candidates or polling agents receive Form 17C, and many independent or low-budget candidateslack agents at all booths, limiting access to crucial data.
    • Introduce Independent Audits of Electoral Rolls and EVMs: Conduct regular third-party audits of voter rolls and Electronic Voting Machines (EVMs) to detect errors, manipulation, or malfunction, and improve public confidence in electoral integrity. Eg: In past elections, reports of missing names or duplicate entries in voter lists have led to allegations of disenfranchisement, especially among marginalised groups.

    Mains PYQ:

    [UPSC 2018] In the light of recent controversy regarding the use of Electronic Voting Machines (EVM), what are the challenges before the Election Commission of India to ensure the trustworthiness of elections in India?

    Linkage: This article explicitly calls for the Election Commission of India (ECI) to “disclose the entire truth that is known only to the Election Commission of India. The 2018 question, by asking about the “challenges before the Election Commission of India to ensure the trustworthiness of elections in India” amidst EVM controversy, directly aligns with the broader call for transparency.

  • Foreign Policy Watch: India-United States

    Resetting the India-U.S. partnership in uncertain times

    Why in the News?

    India-U.S. ties, once seen as strong and promising, now face a quiet shift. Recent U.S. actions like engaging Pakistan’s military and economic warnings to India have caused concern in Delhi.

    Why does the India-U.S. relationship face a strategic drift despite deep convergence?

    • Transactional Approach Undermines Long-term Trust: The Trump administration’s focus on short-term, deal-based diplomacy contrasts with India’s strategic and civilisational outlook, causing mistrust. Eg: Trump’s unpredictable style — praising one day, criticising the next — makes it difficult for India to navigate the partnership confidently.
    • Return of “India-Pakistan Hyphenation”: The revival of outdated strategic equivalence between India and Pakistan has offended Indian diplomatic efforts to de-hyphenate its rise. Eg: Trump’s offer to mediate on Kashmir post-Operation Sindoor and remarks equating both nations reignited diplomatic concerns in New Delhi.
    • Contradictory Economic and Strategic Signals: Despite promoting Indo-Pacific cooperation, U.S. actions have undermined India’s manufacturing ambitions and H-1B visa interests. Eg: Trump reportedly discouraged Apple from expanding in India, clashing with India’s China-plus-one strategy and investment goals.

    What key factors are straining India-U.S. ties under the Trump administration?

    • Revival of India-Pakistan Equivalence: The U.S. has reverted to “hyphenating” India and Pakistan as strategic concerns, undermining India’s diplomatic efforts to decouple its rise. Eg: Trump’s comments post-Operation Sindoor—offering mediation on Kashmir and warning of nuclear escalation—were seen as diplomatically regressive.
    • Economic Mixed Signals: The Trump administration sent conflicting signals on India’s role in global supply chains, affecting investor confidence. Eg: Trump reportedly discouraged Apple from expanding manufacturing in India, undermining India’s China-plus-one strategy.
    • Restrictive Immigration Stance: The H-1B visa policy, critical to U.S.-India tech ties, has become vulnerable to protectionist rhetoric and political posturing. Eg: Curtailing H-1B visas strains the Silicon Valley–India innovation ecosystem, weakening a pillar of bilateral cooperation.

    How can India manage uncertainties in its U.S. engagement strategy?

    • Pursue Calibrated and Persistent Diplomacy: India must avoid overreaction and focus on quiet, sustained engagement to preserve strategic alignment. Eg: Continued cooperation in defence, Quad, and intelligence sharing can reinforce long-term trust despite short-term irritants.
    • Broaden Strategic Outreach in the U.S: India should strengthen its influence beyond traditional diplomacy by engaging Congress, think tanks, and the Indian-American diaspora. Eg: Leveraging support from Indian-origin U.S. lawmakers helps build bipartisan consensus for stronger ties.
    • Accelerate Domestic Economic Reforms: India must boost its manufacturing, regulatory clarity, and infrastructure to reinforce its attractiveness as a global partner. Eg: Advancing Make in India and supply chain resilience makes India indispensable to U.S. Indo-Pacific strategy.

    Why does the U.S. tilt towards Pakistan concern India’s strategic interests?

    Revival of India-Pakistan Diplomatic Parity (Hyphenation): By treating India and Pakistan as strategic equals, the U.S. threatens to undo India’s efforts to decouple its global risefrom the South Asian rivalry. Eg: Trump’s offer to mediate in Kashmir and mention of India and Pakistan in the same context post-Operation Sindoor reflect regressive diplomacy.

    What steps must India and the U.S. take to revive their strategic partnership? (Way forward)

    • Strengthen Institutional and People-to-People Engagement: Both countries must go beyond government-to-government ties and deepen connections through think tanks, academia, diaspora, and legislative forums. Eg: India leveraging the Indian-American diaspora and policy institutions in Washington can build long-term bipartisan support.
    • Reframe Economic and Immigration Cooperation: Economic reforms in India and predictable immigration policies in the U.S. can boost mutual trust in trade and talent exchange. Eg: Reframing the H-1B visa regime as a tool for mutual innovation rather than political leverage strengthens tech cooperation.
    • Reinforce Shared Strategic Values and Regional Vision: India and the U.S. must revive the moral and strategic purpose of their partnership — promoting a rules-based, democratic, Indo-Pacific order. Eg: Joint initiatives through the Quad and coordination in maritime security reinforce their shared commitment to a free and open Indo-Pacific.

    Mains PYQ:

    [UPSC 2019] What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self-esteem and ambitions” Explain with suitable examples.

    Linkage: This article explicitly highlights a “perceptible drift; subtle yet serious” in the relationship, indicating “uncertain times”. It calls for a “reset, not of fundamentals, but of tone, clarity, and mutual commitment”.

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