6th July 2025 – Current Affairs

1. India Notifies WTO of Retaliatory Tariffs Against U.S. Under WTO’s Agreement on Safeguards (AoS) – Economy

What is the Agreement on Safeguards (AoS)?

The AoS is a WTO treaty that:

• Allows temporary trade restrictions (e.g. tariffs, quotas) when a sudden surge in imports causes serious injury or threatens domestic industries.
• Aims to balance trade liberalization with protection for vulnerable sectors.

Key Conditions for Invoking Safeguards:

1. Evidence-based proof of serious injury or threat to domestic industry.
2. Safeguards must be temporary, non-discriminatory, and gradually liberalized.
3. Consultations with affected countries are mandatory.

Important WTO Articles in Context

• Article 12.3 (Transparency & Consultations):
  • Requires prior notification and consultations with affected WTO members before imposing safeguard measures.
• Article 8 (Right to Retaliate):
  • If consultations fail, the affected country has the right to retaliate by suspending equivalent trade concessions.

India’s Position and Response

• U.S. Action: In March 2025, the U.S. imposed a 25% tariff on Indian-origin vehicles.
• India’s Argument:
  • These tariffs act as disguised safeguard measures, bypassing WTO rules.
  • The U.S. did not fulfill its obligation under Article 12.3 to consult India before imposing tariffs.
• Estimated Loss: Around $2.89 billion in Indian exports impacted; U.S. collected $723.75 million in duties.
• India’s Response: Retaliatory tariffs worth $724 million, justified under Article 8.

Broader Implications

• Shift in India’s Trade Strategy: India is adopting a more assertive and legalistic approach in global trade forums.
• Defending Export Interests: India seeks to safeguard its trade competitiveness while remaining engaged in WTO-based dispute resolution.

Summary:

India has notified the World Trade Organization (WTO) that it plans to impose retaliatory tariffs worth $724 million on the U.S. This decision is in response to the U.S. imposing 25% import duties on Indian automobiles — a move India claims is a disguised safeguard measure, breaching WTO rules. The action invokes provisions under the Agreement on Safeguards (AoS), demonstrating India’s increasingly assertive role in international trade disputes.

Exam Connect – Possible Questions

Prelims

1. Which of the following is true regarding the WTO Agreement on Safeguards (AoS)?
   A. Safeguard measures can be imposed without evidence of injury.
   B. AoS permits retaliation if consultations fail.
   C. Safeguards can be permanent.
   D. All WTO members are exempt from safeguard measures.
   Answer: B. AoS permits retaliation if consultations fail.
   
   

2. Article 12.3 of the WTO Agreement on Safeguards pertains to:
   A. Most Favoured Nation treatment
   B. National treatment principle
   C. Prior notification and consultation requirements
   D. Rules on export subsidies
   Answer: C. Prior notification and consultation requirements
   

Mains

1. “Discuss the significance of the WTO Agreement on Safeguards (AoS) in protecting domestic industries. In light of recent India-U.S. trade tensions, evaluate India’s use of retaliatory tariffs under WTO rules.” (250 words)
   
2. “India’s evolving role in global trade dispute resolution mechanisms reflects a shift in its economic diplomacy. Comment.” (250 words)
   

2. Oil Exploration in the Andaman Basin: A Strategic Breakthrough for India’s Energy Security – Economy

Location and Geological Significance

• Andaman Basin: Located in the southeastern Bay of Bengal, covering approx. 2.25 lakh sq. km.
• Shares tectonic features with North Sumatra Basin (Indonesia) and Irrawaddy-Margui Basin (Myanmar)—both known for rich hydrocarbon reserves.
• Historically a “No-Go” zone due to environmental and strategic concerns.

Scientific and Strategic Developments

• 2020 Survey by Oil India Ltd led to:
  • Discovery of mud volcanoes and Baratang formations.
  • Signs of hydrocarbon activity indicating potential oil reserves.
• 2023: Geological data integrated into the National Data Repository (NDR), boosting investor interest.

Strategic Importance

• Oil imports account for over 85% of India’s crude oil needs.
• Discovering domestic reserves in the Andaman could:
  • Reduce dependency on imports.
  • Boost energy security.
  • Spur regional economic and infrastructure development.
• ONGC-TotalEnergies partnership reflects growing international confidence in India’s exploration prospects.

Policy Support: Hydrocarbon Exploration and Licensing Policy (HELP)

Introduced in 2016, HELP replaced the older New Exploration Licensing Policy (NELP). It enables:

1. Single license for all hydrocarbons (oil, gas, shale, coal bed methane).
2. Revenue-sharing model: Reduces audit disputes; simplifies compliance.
3. Open Acreage Licensing Policy (OALP):
   • Allows companies to bid on blocks of their choice anytime.
   • Encourages investment in difficult areas like deepwater blocks.
4. Freedom in pricing and marketing, increasing investor interest.
5. Royalty incentives:
   • Lower royalties for deepwater (7.5%) and ultra-deepwater (5%) exploration to offset risks and high costs.

Economic Impact

• Offshore oil contributes significantly to India’s GDP growth.
• India’s real GDP growth has averaged 47% since 2022, partly attributed to expanding energy exploration.
• Oil discovery in the Andaman could replicate the economic benefits seen in Guyana, a nation transformed by oil exports.

Summary:

India is on the verge of a major oil discovery in the Andaman Sea, potentially comparable to Guyana’s game-changing reserves. This discovery, rooted in recent scientific surveys and facilitated by policy reforms like the Hydrocarbon Exploration and Licensing Policy (HELP), signals a shift in India’s energy strategy towards reducing oil imports and achieving energy security. The region, once a restricted zone, is now attracting strategic collaborations and private investments due to its deepwater potential and geological similarities with other oil-rich basins in Southeast Asia.

Exam Connect – Possible Questions

Prelims

1. Which of the following statements about the Hydrocarbon Exploration and Licensing Policy (HELP) is/are correct?
   1. It allows for a single license for different types of hydrocarbons.
   2. It uses a cost-recovery model for revenue sharing.
   3. It allows companies to freely price and market their output.
   Options:
   A. 1 and 2 only
   B. 1 and 3 only
   C. 2 and 3 only
   D. 1, 2 and 3
   Answer: B. 1 and 3 only
   (Explanation: HELP uses revenue-sharing, not cost-recovery, which was part of NELP.)
   
   

2. The Andaman Basin is geologically comparable to which of the following hydrocarbon-rich regions?
   A. Gulf of Mexico
   B. North Sea Basin
   C. North Sumatra Basin
   D. Persian Gulf Basin
   Answer: C. North Sumatra Basin
   

Mains

1. “Discuss the strategic and economic significance of oil exploration in the Andaman Basin. How have recent policy reforms facilitated energy security in India?” (250 words)
   
   
2. “Evaluate the impact of the Hydrocarbon Exploration and Licensing Policy (HELP) in transforming India’s oil and gas sector. Highlight its role in deepwater and ultra-deepwater exploration.” (250 words)
   

3. Middle East Conflict and India’s Fertiliser Security: A Hidden Crisis in the Making – International Relations

India’s Geopolitical Fertiliser Dependence

• India is the second-largest consumer and third-largest importer of fertilisers globally.
• Imports include:
  • 100% of Muriate of Potash (MOP) – sourced from Belarus, Israel, Jordan.
  • Phosphatic fertilisers (DAP) – mainly from the Middle East and North Africa.
  • Natural gas (key input for urea production) – imported from Gulf countries.

Geopolitical & Logistical Risks

1. Strait of Hormuz – a strategic chokepoint:
   • Most fertiliser shipments from Qatar, Oman, and Saudi Arabia pass through here.
   • Conflict can lead to naval blockades or shipping delays, disrupting imports of urea and DAP, critical during sowing seasons.
2. Volatile Prices:
   • Geopolitical tension increases natural gas prices, impacting:
     • Cost of domestic urea production.
     • Subsidy burden on the government.
   • Fertiliser price volatility directly affects input costs for farmers.
3. Fragile Import Sources:
   • MOP from Belarus and Israel—both in politically sensitive zones.
   • Heavy reliance on a few countries increases supply chain vulnerability.

Lessons from the Russia-Ukraine Crisis (2022):

• Despite disruptions in 2022:
  • No strategic buffer stock policy yet.
  • No significant diversification of import sources.
  • Under-investment in alternatives like bio-fertilisers, nano urea, and organic fertilisers.
• Policy response has been largely reactive rather than long-term.

India’s Steps So Far

Boosting Domestic Production

• Reviving urea plants in:
  • Gorakhpur, Sindri, Talcher – aims for 90% urea self-sufficiency by 2025.

Diversifying Import Sources

• New long-term supply deals with:
  • Morocco (phosphates),
  • Canada (potash),
  • Exploring ties with Jordan, Tunisia, etc.

Policy & Subsidy Reforms

• Direct Benefit Transfer (DBT) for fertiliser subsidies.
• Promoting Nano Urea (developed by IFFCO).
• Incentivising balanced fertiliser use to reduce dependency on synthetic inputs.

Way Forward: Building Fertiliser Supply Chain Resilience

Fertiliser Supply as a National Security Issue

• Food Security Risk: Fertilisers directly affect crop yields; any shortage impacts availability and prices of essential food grains.
• Economic Impact: Fertiliser shortages → increased government subsidy burden → macroeconomic instability.
• Rural Stability: Disruption can lead to farmer distress, rural discontent, and social unrest.

Summary:

While the Iran-Israel conflict dominates global headlines due to its impact on oil prices, a less visible but equally critical threat is emerging: fertiliser supply disruption, with severe implications for India’s food security and agricultural stability. As India is highly dependent on fertiliser imports from conflict-prone regions, any disruption in shipping routes like the Strait of Hormuz could affect availability, raise costs, and threaten the rural economy. The issue reveals gaps in India’s fertiliser strategy, strategic reserves, and resilience to global geopolitical shocks.

Exam Connect – Possible Questions

Prelims

1. Which of the following countries is NOT a major supplier of fertiliser to India?
   A. Canada
   B. Israel
   C. Morocco
   D. Japan
   Answer: D. Japan
   
   

2. The Strait of Hormuz is strategically important for India because:
   A. It is used for importing arms.
   B. It connects the Indian Ocean with the Pacific.
   C. Most of India’s fertiliser and energy imports pass through it.
   D. It houses India’s naval base.
   Answer: C. Most of India’s fertiliser and energy imports pass through it.
   

Mains

1. “Examine how Middle East geopolitics affects India’s fertiliser supply chain. What strategic steps should India take to secure its agricultural future?” (250 words)
   
2. “Critically evaluate India’s fertiliser policy in light of recent global disruptions. Suggest reforms for building resilience in fertiliser supply and distribution.” (250 words)
   

4. Ham Radio: Bridging Communities Through Airwaves – Science and Technology

What is Ham (Amateur) Radio?

• A non-commercial radio communication system that allows licensed users (called radio amateurs) to communicate using radio frequencies allocated by the government.
• Operates on various frequency bands including HF, VHF, and UHF for long- and short-range communication.
• Can connect individuals locally, globally, and even to space stations like the ISS.

Licensing in India

• Regulated by the Ministry of Communications (WPC wing under Ministry of Electronics and Information Technology).
• Eligibility: Anyone above 12 years of age can apply.
• Requires passing a basic amateur radio exam covering radio theory, regulations, and Morse code.
• License issued under the Indian Wireless Telegraphs (Amateur Service) Rules, 1978.

Significance and Applications

1. Emergency Communication

• Independent of mobile networks or the internet, ham radio becomes critical during:
  • Natural disasters (earthquakes, floods, cyclones).
  • Communication blackouts in remote areas.
• Historical examples in India:
  • 2001 Bhuj Earthquake
  • 2004 Indian Ocean Tsunami
  • 2013 Uttarakhand floods
• Ham operators relayed vital information when conventional systems failed.

2. Educational Outreach

• Promotes STEM (Science, Technology, Engineering, Mathematics) education.
• Used by astronauts to connect with students and spread awareness about space technology (e.g. Shubhanshu Shukla’s ISS interaction).
• Helps students learn about:
  • Radio wave propagation
  • Electronics and signal transmission
  • Satellite communication

3. Scientific and Technical Skill Development

• Enhances understanding of:
  • Antenna design
  • Frequency management
  • Digital communication modes (like PSK31, FT8)
• Encourages DIY electronics and coding.

Ham Radio and Space Communication

• ISS regularly communicates with Earth via ham radio as part of the ARISS (Amateur Radio on the International Space Station) program.
• Increases public interest in space science and manned missions.
• Builds a global community of space enthusiasts and learners.

Why It Still Matters in the Digital Age

• Resilience: Operates when mobile towers and internet fail.
• Cost-effective and independent.
• Encourages community-based disaster preparedness.
• Globally coordinated – allows cross-border communication for peace, education, and crisis response.

Summary:

Indian astronaut Shubhanshu Shukla recently used ham radio (amateur radio) from the International Space Station (ISS) to interact with students in India, showcasing the enduring relevance of ham radio. Despite being a non-commercial form of wireless communication, ham radio plays a vital role in emergency communication, disaster response, and science outreach, while also encouraging interest in electronics and wireless technology among youth.

Exam Connect – Possible Questions

Prelims

1. Which of the following statements about ham radio is correct?
   A. It is a commercial radio service for private broadcasters.
   B. It requires no licensing in India.
   C. It can be used to communicate with astronauts in space.
   D. It requires internet connectivity to function.
   Answer: C. It can be used to communicate with astronauts in space.
   
   

2. Who regulates amateur (ham) radio licensing in India?
   A. Ministry of Home Affairs
   B. Ministry of Electronics and Information Technology
   C. Ministry of Science and Technology
   D. Ministry of Defence
   Answer: B. Ministry of Electronics and Information Technology
   (Specifically, the Wireless Planning and Coordination Wing)
   

Mains

1. “Ham radio is often referred to as the ‘last line of communication’ in disaster situations. Examine its relevance in India’s disaster preparedness strategy.” (150–250 words)
   
2. “In a highly digitized world, what is the continuing relevance of amateur radio communication? Discuss its role in education, emergency response, and space outreach.” (250 words)
   

5. CJI Assures Transparency in Judicial Appointments Through the Collegium System – Polity

What is the Collegium System?

• A judicial mechanism developed by the Supreme Court for the appointment and transfer of judges to higher judiciary (SC & HCs).
• Not mentioned in the Constitution — evolved through judicial interpretation.

Constitutional Basis for Judicial Appointments

Structure of the Collegium

Eligibility Criteria for Judges

Supreme Court Judge:

• Citizenship: Must be an Indian citizen.
• Experience:
  • 5 years as a High Court Judge, or
  • 10 years as an advocate in one or more High Courts, or
  • A distinguished jurist in the opinion of the President.

High Court Judge:

• At least 10 years of judicial office, or
• 10 years of advocacy in a High Court.
• Must be enrolled with the Bar Council of India.

Evolution of the Collegium System

How the Collegium System Works

Appointment of the Chief Justice of India (CJI)

• Outgoing CJI recommends the next CJI based on seniority.
• Law Minister forwards recommendation to the PM, who advises the President.

Appointment of SC Judges

• Initiated by the CJI in consultation with Collegium members.
• If related to a High Court judge, the senior-most SC judge from that HC is also consulted.

Appointment of HC Judges

• Initiated by the High Court Collegium.
• Approved by Supreme Court Collegium.
• Routed through State Government → Union Law Ministry → President.

Recent Developments and CJI’s Assurances

• CJI B.R. Gavai emphasized:
  • “Complete transparency” in selection.
  • Emphasis on merit and inclusiveness (e.g., representation of women, SC/ST/OBC, minorities).
  • Minimizing external influences, including executive pressure.

Criticism and Debates Around the Collegium System

• Attempts at reform:
  • National Judicial Appointments Commission (NJAC) Act (2014) struck down by SC in 2015 as unconstitutional, citing threat to judicial independence.

Summary:

Chief Justice of India B.R. Gavai recently reaffirmed the transparency, merit, and inclusivity of the Collegium System, emphasizing its role in preserving judicial independence in India. Despite ongoing criticisms, the system remains central to appointments and transfers of judges in the Supreme Court and High Courts. The CJI’s assurance highlights a commitment to reforming the process from within, without compromising its constitutional objectives.

Exam Connect – Possible Questions

Prelims

1. Which Article of the Indian Constitution provides for the appointment of Supreme Court judges?
   A. Article 214
   B. Article 217
   C. Article 124
   D. Article 142
   Answer: C. Article 124
   
   

2. The Collegium System in India was established through which of the following cases?
   A. Keshavananda Bharati Case
   B. First Judges Case
   C. Second and Third Judges Cases
   D. Minerva Mills Case
   Answer: C. Second and Third Judges Cases
   

Mains

1. “The Collegium System has been both praised and criticized for its approach to judicial appointments. Critically examine its functioning and the need for reform.” (250 words)
   
2. “Judicial independence is a basic feature of the Constitution, but it must coexist with accountability.” Discuss in the context of the Collegium System. (250 words)
   

6. Eight Years of GST: Falling Collections Spark Calls for Structural Reforms – Economy

What Does Low GST Collection Indicate?

1. Sluggish Economic Activity

• GST is a consumption-based tax; lower collections = slower consumption and demand.
• Suggests a moderating economic recovery, especially in retail, manufacturing, and services.

2. Inefficiencies in the Tax System

• Marginal increase of only 3.3% in net tax collections (after refunds).
• Implies:
  • Compliance loopholes
  • Delayed refunds
  • Administrative bottlenecks

3. Weak Revenue Buoyancy

• Revenue from domestic transactions grew by just 4.6%, barely above inflation.
• Indicates that economic growth isn’t translating into proportional revenue growth.

The Fuel Taxation Dilemma

• Petroleum products (petrol, diesel, ATF) are excluded from GST.
• Reasons:
  • They are major revenue sources for States (via VAT).
  • Including them under GST would undermine States’ financial autonomy.
  • But their exclusion violates the principle of a unified indirect tax system.

GST Structure: The Need for Simplification

Current Issue:

• India currently has multiple GST slabs: 0%, 5%, 12%, 18%, and 28%.
• This leads to:
  • Classification disputes
  • Compliance complexity
  • Litigation

Reform Proposal:

• Merge slabs (e.g. 12% and 18%) into fewer rates.
• Benefits:
  • Greater clarity
  • Enhanced compliance
  • Less administrative burden
  • Boosts revenue stability

What Structural Reforms are Needed?

Why This Matters for HAS Aspirants

• GST is a core component of India’s fiscal federalism.
• Relevant to GS3 (Economy), GS2 (Governance – Centre-State relations), and even GS4 (Ethics – transparency in taxation).
• Offers scope for analysis in essay writing on topics like tax reform, economic recovery, and cooperative federalism.

Summary:

On July 1, 2025, India marked eight years since the rollout of the Goods and Services Tax (GST). However, GST collections for June 2025 fell to ₹1.85 lakh crore, the lowest in four months and showing only 6.2% year-on-year growth — the slowest in four years. This stagnation raises serious questions about economic demand, tax system efficiency, and the need for structural reforms, such as simplifying GST slabs and reconsidering the exclusion of fuel from GST.

Exam Connect – Possible Questions

Prelims

1. Which of the following is currently excluded from the ambit of GST?
   A. Packaged food items
   B. Fuel (Petrol & Diesel)
   C. Mobile phones
   D. Hotel services
   Answer: B. Fuel (Petrol & Diesel)
   
   

2. What is the primary reason for advocating fewer GST slabs?
   A. To increase State revenue
   B. To simplify compliance and reduce disputes
   C. To eliminate e-way bills
   D. To stop tax evasion in agriculture
   Answer: B. To simplify compliance and reduce disputes
   

Mains

1. “Despite its aim to simplify the indirect tax regime, the GST system in India faces multiple challenges. Critically evaluate the need for structural reforms in GST.”(250 words)
   
   
2. “The exclusion of petroleum products from GST reflects a conflict between fiscal autonomy of States and the vision of a unified market. Discuss in the context of cooperative federalism.” (250 words)