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  • Why the Iran war didn’t cause a fertiliser crisis

    Why in the News?

    The United States-Israel versus Iran war and the effective closure of the Strait of Hormuz triggered a severe global energy supply shock, yet India’s urea supply held up. Government-pushed diversification of liquefied natural gas (LNG) sourcing lifted urea output to 71.5 lakh tonnes in April-June 2026, up 5.4% year-on-year. The contrast is that the same proactiveness was not replicated for phosphatic fertilisers, leaving di-ammonium phosphate and complex fertilisers exposed.

    What are the main fertiliser nutrients?

    1. Nutrient roles: Urea supplies nitrogen (N); di-ammonium phosphate (DAP) supplies phosphorus (P); muriate of potash (MOP) supplies potassium (K). Complex fertilisers blend N, P, K and sulphur (S).
    2. Feedstock links: Urea depends on natural gas as feedstock. DAP and complex fertilisers depend on phosphoric acid, sulphur and ammonia.

    What kept urea supply stable through the shock?

    1. Feedstock disruption: Before the war, 53-54% of India’s LNG imports came from Qatar and the United Arab Emirates. Shipping blockades and strikes on liquefaction infrastructure broke these contracts.
    2. Sourcing pivot: The government pushed public firms to diversify LNG sourcing, buying more from the United States, Oman, Nigeria, Angola and others. This pivot to the spot market meant higher prices but secured supply.
    3. Output recovery: Urea production fell to 17.5 lakh tonnes in March 2026 from 24.7 lakh tonnes a year earlier, then recovered to 25.4 lakh tonnes by June. Cumulative April-June output of 71.5 lakh tonnes exceeded the previous year.
    4. Import surge: India imported 25.1 lakh tonnes of urea in April-June 2026, up from 8.4 lakh tonnes a year earlier. Higher import costs were not passed on to farmers.

    Why did DAP and complex fertilisers stay tight?

    1. Sulphur bottleneck: Sulphur is needed to make sulphuric acid, which breaks down rock phosphate into phosphoric acid. Without both acids, there can be no DAP, single super phosphate or complex fertilisers.
    2. Price spike: Sulphur landed prices reached about $1,100 per tonne against a normal $150-250 range. The spike predated the war, worsened by Ukrainian drone strikes on Russian refineries.
    3. Phosphoric acid costs: Imported phosphoric acid prices rose from $1,055 per tonne in early 2025 to $1,700 for the July-September 2026 quarter. This steady climb squeezed domestic manufacturers.
    4. No diversification: Unlike urea, phosphatic fertiliser sourcing was not widened. Reduced domestic output was combined with lower imports.

    What is the El Nino monsoon factor?

    1. Rainfall deficit: El Nino-induced monsoon deficiency left June-July all-India rainfall 12.6% below normal. Kharif sowing area fell 2.9% from last year.
    2. Subdued demand: Weak rainfall reduced fertiliser offtake, easing pressure on supply. This contrasts with the surplus monsoon scrambles of 2024 and 2025.

    What are the challenges to fertiliser security?

    1. Import dependence: India depends heavily on imports for sulphur, phosphoric acid and ammonia. Concentrated West Asian sources leave it exposed to conflict.
    2. Subsidy pressure: Shielding farmers from higher costs inflates the fertiliser subsidy bill beyond budget estimates. Sustaining it requires additional provisions for DAP and complex fertilisers.
    3. Single-choke geography: Much feedstock still transits the Strait of Hormuz. A single choke point can disrupt multiple nutrients at once.
    4. Phosphate concentration: Few global suppliers dominate phosphoric acid and sulphur. Price-setting power rests with them during shortages.
    5. Election-linked stocking: Upcoming State elections raise pressure to guarantee rabi-season supply. Political timelines complicate purely economic supply planning.

    Conclusion

    Proactive supply-side management, chiefly LNG diversification and pre-emptive urea imports, insulated India’s nitrogen supply from the worst energy shock in decades. The unresolved vulnerability is phosphatic and complex fertilisers, where sulphur and phosphoric acid sourcing was not diversified and prices continue to climb.

    Back2Basics

    1. Urea: Nitrogen fertiliser made from natural gas; the most consumed fertiliser in India and heavily subsidised.
    2. DAP: Di-ammonium phosphate, a phosphorus source dependent on imported phosphoric acid.
    3. Nutrient Based Subsidy: Regime under which non-urea fertilisers (DAP, MOP, complex) receive a fixed per-nutrient subsidy.
    4. Urea pricing: Sold at a statutory notified price with the gap met by subsidy under the Department of Fertilizers.
    5. Key choke point: Strait of Hormuz, the transit route for much of India’s LNG and fertiliser feedstock.

    The New Urea Policy 2015:

    1. It aims to maximize domestic production, promote energy efficiency in manufacturing units, and rationalize government subsidy burdens.

    Core Objectives

    1. Boost Domestic Output: Increase indigenous manufacturing capacity to reduce reliance on foreign imports.
    2. Energy Conservation: Set strict specific energy consumption targets for production units to lower carbon footprints.
    3. Subsidy Rationalization: Streamline financial support and cut down government expenditure on the sector.

    Key Measures

    1. Neem Coating: Mandated all domestic producers to coat 100% of subsidized urea with neem oil, stopping illegal diversion to non-agricultural sectors.
    2. Energy Grouping: Categorized gas-based plants into distinct groups to fix realistic and progressive energy efficiency norms.
    3. Protected Pricing: Ensured continuous and timely supply of fertilizer to farmers without increasing the retail price

    PYQ Relevance

    [UPSC 2023] What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies.

    Linkage: UPSC has consistently examined agricultural subsidies, their fiscal implications, and India’s compliance with WTO rules. The article shows how rising global fertiliser and LNG prices increase India’s subsidy burden while the government continues to shield farmers through subsidised urea and nutrient-based support for non-urea fertilisers

  • Why has Pakistan-occupied Kashmir erupted in protests?

    Why in the News?

    Simmering discontent over inflation and opaque governance in Pakistan-occupied Kashmir (PoK) has escalated into a violent security crackdown. The Jammu Kashmir Joint Awami Action Committee (JKJAAC) is leading opposition to a three-phase election and to 12 seats reserved for refugees in the 53-seat legislature. The unrest exposes the gap between an establishment-backed electoral process and a local demand for genuine political representation.

    Who are the Jammu Kashmir Joint Awami Action Committee (JKJAAC)?

    1. The JKJAAC is an alliance of civil society groups leading the protest movement in PoK. It has been protesting in Rawalakot, Muzaffarabad, and other locations.
    2. Demand: It seeks a more representative political system and removal of the reserved seats. It alleges the current election process is rigged.

    What is Pakistan-occupied Kashmir (PoK)?

    1. Definition: PoK is the part of the former princely State of Jammu and Kashmir under Pakistan’s control since 1947. India regards it as territory under illegal occupation.
    2. Two Regions: Pakistan administers the area as Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan.
    3. India’s position: The Ministry of External Affairs maintains that the Union Territories of Jammu and Kashmir and Ladakh are integral and inalienable parts of India. It asserts Pakistan is in illegal and forcible occupation and considers local laws or elections void.

    How did a price protest become a movement for representation?

    1. Origins: The movement emerged after the COVID-19 pandemic to curb the prices of essential items. It evolved over the years into a protest against the lack of local political representation.
    2. Legislature structure: The PoK legislature has 53 seats, of which 45 are elected and 8 are nominated. Of the 45 elected seats, 12 are reserved for refugees of Indian Jammu and Kashmir who migrated after 1947.
    3. Grievance over reserved seats: Voters for these 12 seats cast ballots from outside PoK. Locals claim the reserved seats reduce regional representation and let Islamabad override local concerns.
    4. Escalation: The JKJAAC called a “long march” after authorities proceeded with the election without addressing the demand. The protest gained momentum after a PhD scholar was reportedly killed in police firing in Rawalakot.

    Why is Islamabad’s relationship with PoK strained?

    1. Developmental neglect: Mainstream parties have not met the region’s developmental aspirations. Locals allege long-standing neglect by Islamabad.
    2. Inflammatory rhetoric: The Pakistan Defence Minister called the protesters “enemies just like Indians”. The remark inflamed public sentiment.
    3. Parallel with other regions: The complaints echo those long voiced in Khyber Pakhtunkhwa and Balochistan. Both regions have seen protests and insurgencies for decades.
    4. Rigging allegations: The second phase of polling drew allegations of irregularities. The Pakistan Muslim League-Nawaz swept the phase, enabling it to form the regional government.

    How have India and international actors responded?

    1. India’s condemnation: The Ministry of External Affairs blamed the Pakistani establishment for the deaths of over 40 civilians. It called the ongoing polls a cosmetic exercise to camouflage illegal occupation.
    2. JKJAAC’s distancing: The committee rejected any Indian attempt to appropriate the movement. It stated the civil rights movement is neither a proxy nor an extension of interstate rivalries.
    3. Amnesty International: Amnesty urged Pakistan to restore communications access and allow media and independent observers. It responded to a communication blackout in PoK.
    4. United Kingdom diaspora: Non-resident Mirpuri Kashmiris with a strong presence in the UK began an online campaign. It urges restraint on Pakistan’s security establishment.

    Conclusion

    The unrest reflects a contest between an establishment-managed election and a local movement rejecting its political basis. The current status is a continuing three-phase poll amid a deadly crackdown and a communication blackout. Whether the protests subside depends on whether Islamabad addresses the demand over reserved seats, which it has so far refused.

    Back2Basics

    1. PoK: Pakistan-occupied Kashmir, part of the former princely State of Jammu and Kashmir under Pakistan’s control since 1947; India treats it as illegally occupied territory.
    2. Legislature: The PoK assembly has 53 seats, 45 elected and 8 nominated, with 12 elected seats reserved for post-1947 refugees.
    3. Line of Control: The military control line dividing Indian and Pakistani-administered Kashmir, formalised after the Shimla Agreement of 1972.
    4. India’s stance: The Union Territories of Jammu and Kashmir and Ladakh are integral parts of India, with Pakistan in illegal and forcible occupation of parts of them.

  • India cushions energy security against the Strait of Hormuz disruption

    Why in the News?

    India’s Liquefied Natural Gas (LNG) imports rose despite disruption to shipping through the Strait of Hormuz during the West Asia conflict. Imports were diversified to the United States, Nigeria, Oman, and Angola as supply from Qatar collapsed. The Oil and Natural Gas Corporation (ONGC) will also reserve half its Mangaluru facility as a strategic petroleum reserve, exposing the link between supply diversification and physical storage in energy security.

    What is the Strait of Hormuz?

    1. The Strait of Hormuz is the narrow waterway between Iran and Oman connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is a critical energy chokepoint.
    2. Strategic weight: The strait usually carries about a fifth of global oil and LNG shipments. Its disruption during the conflict threatened a large share of India’s gas supply.

    What is Liquefied Natural Gas (LNG)?

    1. Definition: LNG is natural gas cooled to liquid form for transport by ship over long distances. It is regasified at import terminals for use.
    2. India’s dependence: LNG imports meet about half of India’s natural gas requirement. Around 60% of those imports came through the Strait of Hormuz, mainly from Qatar and the UAE.

    How did India cushion the disruption?

    1. Higher overall imports: LNG imports in May-July rose 15.4% year-on-year to 7.08 million tonnes. This followed a near 13% dip in March-April, the first two months of the war.
    2. Supplier diversification: The United States supplied 2.19 million tonnes, up sharply year-on-year. Oman, Nigeria and Angola also rose steeply.
    3. Russian Crude: Russia increased its share to supply roughly 40% of India’s crude imports, bypassing the Hormuz chokepoint entirely.
    4. Collapse of traditional sources: Supply from Qatar plunged 91.3% to 0.23 million tonnes, against a monthly average of 1 million tonnes in 2025. UAE fell 34.4% to 0.55 million tonnes.
    5. Supply over price: India prioritised securing volumes over price to meet demand from city gas, fertiliser, power, and ceramics. LNG prices are expected to stay high, near 19 to 20 dollars per million British thermal units.
    6. Infrastructure Adaptability: West coast terminals like Mundra handled very large crude carriers (VLCCs) from non-Middle Eastern channels.
    7. Ethanol Blending: E20 petrol implementation reduced overall crude import demand by substituting 20% of domestic petrol with local ethanol.

    What is a Strategic Petroleum Reserve?

    1. Definition: A strategic petroleum reserve is a stockpile of crude oil held to cushion supply shocks and price spikes. It is drawn down during import disruptions.
    2. ONGC facility: ONGC is developing a 1.75 million metric tonne facility at Mangaluru. Half of this storage will be reserved as strategic storage, with the rest for commercial operations.
    3. Current buffer: India’s existing crude and petroleum product storage can meet about 74 days of net crude import requirements. The government plans an additional 6.5 million metric tonnes, including at Chandikhol in Odisha and Padur in Karnataka.

    What are the challenges to India’s energy security buffer?

    1. Chokepoint concentration: A single waterway still carries most of India’s Gulf LNG. Any renewed closure of the strait re-exposes this dependence.
    2. Price-driven demand loss: High LNG prices push price-sensitive sectors like industry and power to alternative fuels. This demand destruction undercuts LNG’s role in the energy mix.
    3. Storage gap: A 74-day buffer sits below the 90-day cover the International Energy Agency recommends. Planned reserves are years from completion.
    4. Import dependence: India imports the bulk of its crude and much of its gas. Diversification reduces but does not remove the exposure to external shocks.
    5. Transit workarounds: Some suppliers exported by switching off tanker transponders to evade detection. Such tactics reflect the fragility of normal shipping through the region.

    Conclusion

    India managed the Hormuz disruption by rapidly re-routing LNG procurement to unaffected suppliers rather than cutting imports. The current status is a diversified supplier mix dominated by the United States and Oman, with strategic storage being expanded at Mangaluru and new sites. The next milestone is commissioning the additional 6.5 million tonnes of reserve capacity to lift the buffer toward international norms.

    Back2Basics

    Strategic Petroleum Reserve (SPR)

    1. Definition: A Strategic Petroleum Reserve (SPR) is an emergency crude oil stockpile to protect against supply and price shocks.
    2. Manager: India’s SPR programme is run by Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas.
    3. Phase I sites: Visakhapatnam, Mangaluru, and Padur, with a combined capacity of about 5.33 million metric tonnes.
    4. Global benchmark: The International Energy Agency recommends reserves covering 90 days of net oil imports.
    5. Hormuz significance: The Strait of Hormuz handles roughly a fifth of global oil and LNG trade, making it the world’s most critical oil chokepoint.

    PYQ Relevance

    [UPSC 2025] ‘Energy security constitutes the dominant kingpin of India’s foreign policy, and is linked with India’s overarching influence in Middle Eastern countries.’ How would you integrate energy security with India’s foreign policy trajectories in the coming years?

    Linkage: UPSC recognises energy security as a key determinant of India’s foreign policy and strategic engagement with West Asia. The article shows how supplier diversification, strategic petroleum reserves, and secure maritime supply routes strengthen India’s energy security amid geopolitical disruptions.

  • Govt plans tax relief for offshore funds, electronics’ contract manufacturing

    Why in the News?

    The government has circulated the Taxation and Other Laws (Amendment) Bill, 2026, which relaxes the conditions under which offshore funds managed from India can claim tax exemption. The Bill also extends a tax exemption for foreign firms supplying equipment to electronics contract manufacturers and introduces a fresh tax holiday for rough-diamond trading in a notified zone. The measures respond to foreign outflows and to lobbying by manufacturers seeking tax certainty.

    What is the Taxation and Other Laws (Amendment) Bill 2026?

    1. Purpose: The Bill amends the Income-tax Act to promote fund management activity and provide tax certainty to specified foreign and offshore entities. It bundles relief for offshore funds, electronics contract manufacturing and rough-diamond trading.
    2. Replaces an Ordinance: The Bill replaces the Income-tax (Amendment) Ordinance, 2026 promulgated on 5 June, which had exempted foreign portfolio investors from capital gains and withholding taxes on government securities. The Ordinance was brought amid pressure on the rupee and foreign outflows.

    What is an Eligible Investment Fund (offshore fund)?

    1. Definition: An Eligible Investment Fund is an offshore pooled investment vehicle that can be managed by a fund manager based in India without the fund itself being treated as having a taxable business presence in India.
    2. Why the safe harbour matters: Without the exemption, the manager’s activity in India could create a business connection, exposing the fund’s global income to Indian tax at rates of up to 38%.

    Key Rules for an Eligible Investment Fund

    1. Outside Location: The fund must be created, registered, or incorporated outside the host country (for example, outside India).
    2. Non-Resident Status: The fund and its general members must live or reside outside the target country.
    3. Member Limits: It usually needs a minimum number of members (such as 25 non-connected investors) so that it is a true public or pooled vehicle and not controlled by a single family or small group.
    4. Diverse Ownership: No single member or direct group can hold a massive stake (usually restricted below 10% or 20% depending on precise tax codes) to prevent individual dominance

    How does the Bill ease conditions for offshore funds?

    1. Fewer conditions to qualify: The government proposes to remove 8 of the 13 conditions that offshore funds must meet so their activity does not constitute business income in India. Only five conditions would remain.
    2. Dropped thresholds: Removed conditions include a minimum of 25 investors, a maximum 10% interest for a single investor, a cap on investing more than 25% of the corpus in one entity, and a minimum monthly average corpus of Rs 100 crore.
    3. Remaining conditions: The fund must not be a resident of India and must not control or manage any business in India. Direct investment by Indian residents must not exceed 5% of the corpus on 1 April and 1 October of the tax year.
    4. Intended effect: Aligning safe-harbour rules with global fund structures aims to relocate offshore fund management activity to India and to unify the framework with the International Financial Services Centre (IFSC).

    What relief goes to electronics contract manufacturing?

    1. Extended exemption to FY41: Tax exemption for a foreign company that provides capital goods, equipment or tooling to a contract manufacturer of electronics in India is extended to tax year 2040-41, from the earlier 2030-31. The exemption was first introduced earlier in the year, valid only to 2031.
    2. Why it was sought: A major device maker lobbied for the change, fearing that ownership of high-end machinery supplied to contract manufacturers would be treated as a business connection and expose its profits to Indian tax, unlike in China.
    3. Scope of devices: The exemption applies to makers of mobile phones, tablets, laptops, hearing and wearable electronic devices. India is set to make 26% of the world’s iPhones in 2026, up from 6% four years earlier.
    4. Storage of components: Foreign firms’ income from storing and providing parts to contract manufacturers is exempt until 2041, applying to factories and warehouses in customs-bonded areas treated as outside the customs border.

    What is the rough-diamond tax holiday?

    1. Fifteen-year holiday: A new tax holiday of 15 years up to 31 March 2041 is proposed for specified foreign companies acting as mining companies, sightholders, brokers, aggregators and tender or auction entities. It exempts their income from the sale of rough diamonds in a notified special zone in India.
    2. Objective: The measure aims to bring rough-diamond trading, currently routed through overseas centres, into a notified Indian zone.

    What are the challenges to the tax-relief package?

    1. Revenue foregone: Long-dated exemptions to 2041 lock in a loss of tax revenue over more than a decade, with benefits concentrated among large foreign firms.
    2. Selective advantage: Relief tailored to a single dominant electronics buyer raises questions of a level playing field for smaller manufacturers.
    3. Uncertain relocation gains: Easing offshore-fund conditions may not by itself pull managers to India if enforcement and dispute practices remain aggressive.
    4. Base-erosion concern: Broad exemptions on cross-border income invite scrutiny over profit shifting through bonded zones and notified special zones.

    Conclusion

    The Bill uses targeted, long-dated tax exemptions to keep foreign capital and electronics manufacturing anchored in India while replacing a June Ordinance on government-securities taxation. Its success depends on whether removing safe-harbour conditions genuinely relocates fund management to India and whether the electronics concessions deepen domestic value addition rather than mere assembly. The Bill is expected to be introduced in Parliament during the week.

    Back2Basics

    1. Eligible Investment Fund: An offshore fund permitted to be managed from India without creating a taxable business connection, subject to safe-harbour conditions under the Income-tax Act.
    2. Foreign Portfolio Investor (FPI): An overseas investor registered with the Securities and Exchange Board of India to invest in Indian securities.
    3. International Financial Services Centre (IFSC): A jurisdiction, such as GIFT City in Gujarat, that provides financial services to non-residents in foreign currency under a distinct regulatory regime.
    4. Contract manufacturing: Production by a third-party manufacturer of goods for a brand owner, common in electronics assembly.
    5. Customs-bonded area: A warehouse or factory treated as outside India’s customs border, where import duty is deferred until goods enter the domestic market.

    PYQ Relevance

    [UPSC 2019] Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

    (a) Certificate of Deposit (b) Commercial Paper (c) Promissory Note (d) Participatory Note

    Answer: (d)

  • [4th August 2026] The Hindu OpED: Critical minerals, the foundation of strategic power

    Mentor’s Comment

    Critical minerals have moved from the margins of resource policy to the centre of industrial strategy and national security. China’s dominance in refining, sharpened by rare-earth export controls announced in 2025, has exposed how concentrated the global supply chain is and how vulnerable importing economies remain. India holds domestic reserves but lacks the processing and refining capacity that decides who actually controls supply.

    What are critical minerals?

    1. Definition: Critical minerals are metals and elements that are essential to modern technology and defence but face a high risk of supply disruption due to concentrated production. Lithium, cobalt, nickel, graphite, copper and rare earth elements are the core group.
    2. Why they matter now: They are foundational to electric vehicles, battery storage, renewable power, semiconductors, defence systems and advanced manufacturing. As decarbonisation and digitalisation accelerate, mineral security is becoming as strategically important as oil once was.

    Why is the global supply picture a strategic risk, not a commercial one?

    1. Refining is concentrated in a few countries: For copper, lithium, nickel, cobalt, graphite and rare earths, the average market share of the top three refining countries rose to 86% in 2024 from around 82% in 2020. Supply now depends on a handful of nodes.
    2. China leads across nearly all strategic minerals: China is the leading refiner in 19 of 20 strategic minerals, with an average market share of about 70%. This concentration turns minerals into geopolitical leverage rather than ordinary traded commodities.
    3. Processing is the true chokepoint: In 2024, China accounted for over 90% of rare earths and graphite processing, nearly 75% of cobalt and 70% of lithium chemicals. Control of the midstream, not the mine, confers power.
    4. Export controls have weaponised supply: China’s rare-earth export controls announced in 2025 raised alarm across energy, automotive, defence, aerospace, Artificial Intelligence and semiconductor sectors. A single supplier’s policy decision can now disrupt entire industries.

    What do foreign responses show about the value of processing capacity?

    1. European Union, mandated benchmarks: The Critical Raw Materials Act sets 2030 targets of 10% domestic extraction, 40% processing and 25% recycling, with no more than 65% of any strategic mineral sourced from a single country. It builds integrated supply chains through binding mandates.
    2. United States, mine-waste refining and defence dependence: Firms such as Phoenix Tailings use electrolysis to extract rare earths from mine tailings, backed by a USD 500 million Pentagon loan to expand separation and metallization, the weakest stage of the mines-to-magnets chain. Weapons such as Tomahawk cruise missiles, THAAD interceptors and F-35 jets fail without these inputs.
    3. United States, samarium bottleneck: The defence sector needs 50 to 100 tonnes of samarium each year, yet domestic capacity is tiny, forcing reliance on revived European sites. Solvay restarted separating rare earths at La Rochelle in France after China choked processed-material outflows in April 2025.
    4. United States, tungsten deadline: The Pentagon has set a January 2027 cut-off for China-sourced tungsten, but China controls roughly 80% of global mine supply and a larger share of downstream processing. Building domestic capacity will take years, forcing reliance on existing inventories.

    How is India positioned, and where is the gap?

    1. Reserves exist but supply security does not: India holds reserves of cobalt, copper, graphite and nickel, plus monazite deposits containing rare-earth oxides. It still imports lithium, cobalt and nickel.
    2. The critical gap is processing and refining: India has bulk-mineral experience but relies on imports for high-purity critical mineral products. Capacity and high-purity production remain constrained.
    3. Structural constraints slow progress: Exploration is shallow, regulatory clearances are time-consuming, private participation is limited and remote-region project economics are weak. Recycling cannot substitute for primary supply in the near term.
    4. Rising demand widens the exposure: Under a net-zero scenario, cumulative demand for critical energy-transition minerals could reach roughly 169 million tonnes by 2070, well above a current-policy pathway.

    What is India’s policy response since 2023?

    1. National Critical Mineral Mission: The government has identified 30 critical minerals and launched the Mission to support the value chain, targeting 1,200 domestic exploration projects by 2030-31, production of at least 15 critical minerals, and acquisition of 50 overseas mining assets.
    2. MMDR Act Amendment (2023): Amended the Mines and Minerals (Development and Regulation) Act to empower the central government to auction mining leases and composite licenses for 24 critical and strategic minerals (like lithium and cobalt).
    3. Overseas acquisition through KABIL: Khanij Bidesh India Limited (KABIL), a joint venture of state-owned firms for overseas mineral assets, has secured acreage in Argentina’s Catamarca province for lithium exploration.
    4. Domestic rare-earth corridors: The 2026-27 Budget proposed rare-earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
    5. Diplomatic diversification: The India-United States critical minerals and rare earths framework signed in May 2026 provides an additional lever to diversify supply away from a single source.

    What are the challenges to India’s critical mineral security?

    1. Midstream absence: Without high-purity refining, India cannot participate meaningfully in supply-chain realignment even where it mines the raw ore.
    2. Import dependence for battery metals: Continued reliance on imported lithium, cobalt and nickel leaves electric-vehicle and storage ambitions exposed to external disruption. India imports more than 70% of its lithium-ion battery requirements from China and Hong Kong.
    3. Long lead times: Exploration, clearances and processing plants take years, so near-term vulnerability persists regardless of policy intent.
    4. Recycling feedstock is thin: Collection systems, feedstock volumes and technology remain limited, so recycling cannot yet offset primary shortfalls. Only 5% to 10% of digital waste in India is being systematically recycled, the rest is being wasted.
    5. No strategic stockpile in place: India has not yet operationalised buffer stocks for critical minerals, leaving it without a cushion against sudden export controls abroad.

    Conclusion

    Mineral security now defines India’s industrial and strategic trajectory, and the decisive gap is not reserves but processing and refining capacity. Individual measures are necessary but insufficient without a comprehensive strategy that sets mineral-specific risk thresholds, integrates recycling, builds strategic stockpiles and creates a coordinated institutional framework. The priority is to convert domestic potential into refining capability and reduce strategic vulnerability through sustained execution.

    Back2Basics

    National Critical Mineral Mission:

    1. Launched by the Union government to secure the critical mineral value chain, from exploration to recycling.
    2. Nodal ministry: Ministry of Mines.
    3. Minerals identified: 30 critical minerals notified for India.
    4. Key targets: 1,200 domestic exploration projects by 2030-31, production of at least 15 critical minerals, and acquisition of 50 overseas mining assets.
    5. KABIL: Khanij Bidesh India Limited, a joint venture of NALCO, Hindustan Copper and Mineral Exploration Corporation, tasked with acquiring strategic mineral assets abroad.
    6. Legal backing: The Mines and Minerals (Development and Regulation) Act, 1957 was amended in 2023 to empower the Central Government to auction leases for specified critical minerals.

    Strategic Critical Minerals Cooperation Framework (India and USA)

    1. India and the United States signed the Strategic Critical Minerals Cooperation Framework on May 26, 2026, in New Delhi.
    2. The agreement was finalized to secure supply chains, boost clean energy manufacturing, and reduce reliance on single-source monopolies like China.

    Key Goals of the Partnership

    1. Supply Chain Security: Protects sensitive mineral and rare earth networks from coercive market practices.
    2. Collaboration Areas: Focuses heavily on joint mining, advanced processing, recycling, and scrap management.
    3. Broader Alignment: Coordinates with plurilateral efforts like the Quad Critical Minerals Initiative and the Forum on Resource Geostrategic Engagement (FORGE).

    PYQ Relevance

    [UPSC 2025] Consider the following statements:

    I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.

    Which of the statements given above are correct? (a) I and II only (b) II and III only (c) I and III only (d) I, II and III

    Answer: (c)

  • Door opens for fee on UPI, RuPay debit card payment to big merchants

    Why in the News?

    The Ministry of Finance has proposed allowing banks and payment system providers to levy a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) and RuPay debit card transactions made to large merchants (annual turnover above ₹50 crore).

    What is Merchant Discount Rate (MDR)?

    • Merchant Discount Rate (MDR): A fee paid by a merchant to its bank for processing digital payments.
    • The fee is shared among: Acquiring bank, Issuing bank, and Card/payment network.
    • Currently, UPI and RuPay debit card transactions have zero MDR.

    Key Proposal

    • MDR permitted for merchants with annual turnover above ₹50 crore.
    • Small and medium merchants remain exempt.
    • Aims to ensure the long-term sustainability of the digital payments ecosystem.

    Why is MDR Being Considered?

    • Zero MDR has created a funding gap for payment infrastructure.
    • Maintaining and expanding UPI networks involves significant operational costs.
    • The Standing Committee on Finance recommended a sustainable revenue model.

    Challenges

    • Large merchants may pass the cost on to consumers.
    • Could discourage UPI acceptance among some businesses.
    • Turnover-based implementation may increase compliance complexity.
    • May affect confidence in India’s zero-cost digital payment model.

    Back2Basics

    • UPI: Unified Payments Interface, a real-time payment system developed by the National Payments Corporation of India (NPCI).
    • RuPay: India’s domestic card payment network operated by NPCI.
    • NPCI: National Payments Corporation of India, the umbrella organisation for retail payment systems.
    • Regulator: Reserve Bank of India (RBI) under the Payment and Settlement Systems Act, 2007.

    National Payments Corporation of India (NPCI)

    • National Payments Corporation of India (NPCI) is an umbrella organization for operating retail payment and settlement systems in India.
    • Established in 2008 under the provisions of the Payment and Settlement Systems Act, 2007.
    • Promoted by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA).
    • Registered as a Not-for-Profit Company under Section 8 of the Companies Act, 2013 (earlier Section 25 of the Companies Act, 1956).

    [2018] Which one of the following best describes the term “Merchant Discount Rate” sometimes seen in news?

    (a) The incentive given by a bank to a merchant for accepting payments through debit cards pertaining to that bank.

    (b) The amount paid back by banks to their customers when they use debit cards for financial transactions for purchasing goods or services.

    (c) The charge to a merchant by a bank for accepting payments from his customers through the bank’s debit cards.

    (d) The incentive given by the Government to merchants for promoting digital payments by their customers through Point of Sale (PoS) machines and debit cards.

  • Climate whiplash, fire clouds: factors fuelling Europe’s wildfires

    Why in the News?

    Severe wildfires have swept across Greece, France, Spain, Portugal and Italy, driven by climate whiplash, pyrocumulonimbus (pyroCb) clouds, and prolonged heatwaves, highlighting the growing impact of climate change.

    Key Concepts

    Climate Whiplash

    • Rapid shift between extreme wet and dry conditions.
    • Wet periods promote vegetation growth, while subsequent heatwaves dry it into highly flammable fuel.

    Pyrocumulonimbus (pyroCb) Clouds

    • Fire-generated thunderstorm clouds formed by intense wildfire heat.
    • Can reach the stratosphere, generate lightning and strong winds, creating new fires.

    Sixth-Generation Wildfires

    • Extremely intense wildfires driven by heatwaves and prolonged drought.
    • Difficult to control using conventional firefighting methods.

    Why are Europe’s Wildfires Becoming More Severe?

    • Climate whiplash increases fuel availability.
    • PyroCb clouds spread fires through lightning and erratic winds.
    • Rural land abandonment has increased combustible vegetation.
    • Rising temperatures and prolonged droughts intensify fire conditions.

    Impacts

    • Loss of lives, forests and biodiversity.
    • Declining air quality across large regions.
    • Increased carbon dioxide (CO₂) emissions, accelerating climate change.
    • Annual economic losses of about €2.5 billion in the European Union (EU).

    [2026] Consider the following statements with reference to India’s response to climate change:

    I. India’s LT-LEDS is a crucial tool for achieving net-zero emissions by 2070.

    II. India’s BUR-4 (Dec 2024) recorded ~8% decrease in GHG emissions in 2020 over 2019.

    III. Climate-resilient development necessarily depends on quick and short-term achievement of emission reduction targets.

    Which of the following relationships is/are correct?

    1. Statement I is empirically supported by statement II

    2. Statement III contradicts the approach implicit in statement I

    3. Statement I and statement III together establish the premise of long-term sustainability

    (a) 1 only

    (b) 1 and 2

    (c) 2 and 3

    (d) 3 only

  • Parliamentary panel questions Meta and threatens Section 79 safe harbour

    Why in the News?

    The Parliamentary Standing Committee on Communications and Information Technology questioned Meta over the temporary removal of the Prime Minister’s Facebook post and warned of withdrawing safe harbour protection under Section 79 of the Information Technology Act, 2000.

    What is Section 79?

    • Grants safe harbour protection to intermediaries, shielding them from liability for third-party content.
    • Applies only if intermediaries:
      • Follow due diligence requirements.
      • Do not create or modify user content.
      • Comply with lawful government or court directions.

    Who is an Intermediary?

    • An entity that stores or transmits third-party content, such as Social media platforms, Internet Service Providers (ISPs), and Search engines
    • Hosts user-generated content without being its author.

    Key Findings

    • A Prime Ministerial Facebook post was temporarily restricted.
    • The Parliamentary Committee sought:
      • An explanation and audit trail from Meta.
      • Assurance against future recurrence.
    • The issue revived the debate on intermediary liability and platform accountability.

    Challenges

    • Withdrawal of safe harbour may encourage excessive content removal.
    • Risks chilling free speech and legitimate dissent.
    • Platforms cannot realistically pre-screen billions of posts.
    • Balancing accountability with freedom of expression remains difficult.

    Back2Basics

    • Information Technology Act, 2000: Governs cyber laws and intermediary liability in India.
    • IT Rules, 2021: Prescribe due diligence obligations for intermediaries.
    • Shreya Singhal v. Union of India (2015): Supreme Court held that content takedown under Section 79 generally requires a court order or government notification.

    [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.

  • Why has West Bengal cleared land for the BSF now?

    Why in the News?

    The West Bengal Cabinet approved the transfer of 31.905 acres of land at nine locations and 1.53 acres for three new Border Outposts (BOPs) to the Border Security Force (BSF) for border fencing and security infrastructure.

    Why Does the Centre Need State Approval for Border Fencing?

    • Although border security is a Union subject, the land on which fencing and Border Outposts are built is administered by the State Government under State List Entry 18.
    • Therefore, the Centre must rely on the State for:
      • Transfer of government land.
      • Acquisition of private land.
      • Revenue and environmental clearances.
      • Compensation and rehabilitation.
      • Support from district administration.

    Centre-State Disputes over BSF Jurisdiction

    • In 2021, the Centre extended the BSF’s jurisdiction from 15 km to 50 km inside Punjab, West Bengal, and Assam (while reducing it in Gujarat).
    • Some States opposed the move, citing federalism and State autonomy.
    • 2024 Supreme Court Judgment: Upheld the Centre’s notification, holding that it does not dilute the powers of State Police and is intended to strengthen border security.

    What is the Border Security Force (BSF)?

    • Border Security Force (BSF): A Central Armed Police Force (CAPF) under the Ministry of Home Affairs (MHA).
    • Guards India’s borders with Pakistan and Bangladesh during peacetime.
    • Prevents cross-border crimes and manages Border Outposts (BOPs).

    Key Highlights

    • Land transferred for border fencing and construction of three new BOPs.
    • Implements the Calcutta High Court’s January 2026 directive.
    • Aims to strengthen border surveillance and security.

    Why is West Bengal Important?

    • Shares 2,216.7 km of the 4,096.7 km India-Bangladesh border (about 54%), the longest among all States.
    • Around 569 km of the border remains unfenced, making it crucial for completing the national fencing project.

    Key Agreements

    • Coordinated Border Management Plan (CBMP), 2011: Framework for coordination between BSF and Border Guard Bangladesh (BGB).
    • Land Boundary Agreement (LBA), 2015: Resolved enclave exchange and adverse possession issues between India and Bangladesh.

    Challenges

    • Riverine and marshy terrain limits conventional fencing.
    • Land acquisition and environmental clearances delay projects.
    • Border communities face livelihood and mobility concerns.
    • Persistent issues of smuggling, illegal migration and human trafficking.

    [2016, GS3, 12.5 marks] Border management is a complex task due to difficult terrain and hostile relations with some countries. Elucidate the challenges and strategies for effective border management.
    [2026] Which of the following with reference to Indian States is/are not correct?
    1. Uttar Pradesh shares its boundary with the highest number of other Indian States.
    2. Rajasthan shares the longest international border among all Indian States.
    3. Sikkim is the only State that shares its boundary with just one other Indian State.
    Select the answer using the code given below :

    [A] 1 only

    [B] 1 and 2

    [C] 2 and 3

    [D] 3 only

  • Lok Sabha passes the Supreme Court (Number of Judges) Amendment Bill 2026

    Why in the news?

    The Lok Sabha passed the Supreme Court (Number of Judges) Amendment Bill, 2026, increasing the sanctioned strength of the Supreme Court of India from 34 to 38 judges (including the Chief Justice of India (CJI)) to address rising case pendency.

    Key Provisions

    • Increased Strength: Raises the sanctioned strength from 34 to 38 judges.
    • Replaces Ordinance: Converts the earlier ordinance into permanent law.
    • Objective: Improve disposal of cases and reduce judicial backlog.

    Constitutional Basis

    • Article 124: Empowers Parliament to determine the number of Supreme Court judges by law.
    • Governing Law: Supreme Court (Number of Judges) Act, 1956.

    Why is the Amendment Needed?

    • Over 92,000 cases were pending in the Supreme Court (as of 1 January 2026).
    • Growing gap between institution and disposal of cases.
    • Increasing litigation has added pressure on the Court.

    Challenges

    • Sanctioned posts must be filled promptly.
    • Delays in the Collegium appointment process.
    • More judges require additional infrastructure and staff.
    • Procedural delays and frequent adjournments remain unresolved.

    Back2Basics

    • Article 124: Establishes the Supreme Court and empowers Parliament to fix its strength.
    • Original Strength (1950): Chief Justice + 7 judges.
    • Appointment: By the President of India under the Collegium System.
    • Retirement Age: 65 years.
    • Evolution: Three Judges Cases
      • First Judges Case (1981): Executive had primacy in appointments.
      • Second Judges Case (1993): Introduced the Collegium System; judiciary gained primacy.
      • Third Judges Case (1998): Expanded the Collegium to the CJI plus four senior-most Supreme Court judges.

    [2014] The power to increase the number of judges in the Supreme Court of India is vested in?

    (a) The President of India

    (b) The Parliament

    (c) The Chief Justice of India

    (d) The Law Commission