12th October 2025 – Current Affairs

1. Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025 – Environment

Why in News?

The Government of India has notified the first legally binding Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025. These rules are aimed at regulating emissions from four high-emission industrial sectors:

• Aluminium

• Cement

• Chlor-alkali

• Pulp & Paper

This is a major policy development to operationalize the Carbon Credit Trading Scheme (CCTS), 2023, a market-based approach to controlling emissions.

Key Highlights of the GEI Target Rules, 2025

What is Emission Intensity?

• Emission Intensity = Total GHG emissions / Unit of GDP or output

• It measures efficiency of an industry or country in terms of how much emissions are generated per unit of production.

• Lower intensity = More climate-friendly processes.

About Carbon Credit Trading Scheme (CCTS), 2023

• It enables entities that reduce emissions below their targets to earn carbon credits.

• These credits can be traded in a national carbon market.

• Helps incentivize emission reductions and promotes low-carbon technologies.

Significance of the Move

• Aligns India’s policy with its Nationally Determined Contributions (NDCs) under the Paris Agreement.

• Sets a framework for carbon markets, allowing India to economically manage its emissions.

• Promotes industrial decarbonization, crucial for achieving net-zero emissions by 2070.

Challenges

• Compliance burden on industries

• Measurement, Reporting & Verification (MRV) mechanisms need to be robust

• Risk of greenwashing if not strictly monitored

Exam Connect – Possible Questions

Prelims

1. Consider the following sectors:
1.Aluminium
2.Cement
3.Power Generation
4.Pulp & Paper
5.Chlor-alkali
Which of the above sectors are covered under the Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025?
A. 1, 2, 3, 4
B. 1, 2, 4, 5
C. 2, 3, 4, 5
D. 1, 2, 3, 5
Answer: B. 1, 2, 4, 5

2. What is the correct definition of “emission intensity”?
A. Total amount of CO₂ emitted per person
B. Total greenhouse gases emitted per unit of production or GDP
C. The increase in carbon emissions over a decade
D. Emissions generated from the energy sector only
Answer: B. Total greenhouse gases emitted per unit of production or GDP

Mains

1.Discuss the significance of the Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025 in achieving India’s climate goals. How does it align with the Carbon Credit Trading Scheme, 2023? (150 words)

2.What are the key challenges and opportunities associated with implementing legally binding emission intensity targets in industrial sectors? Suggest policy measures to ensure compliance and effectiveness. (250 words)

2.India to Revise IIP Base Year for Better Growth Tracking –Economy

Why in News?

The Government of India is planning to revise the base year of the Index of Industrial Production (IIP) from 2011–12 to 2022–23. This revision is essential to ensure that the IIP reflects the contemporary structure and real-time performance of India’s industrial sector.

Key Highlights

What is the Index of Industrial Production (IIP)?

• A composite economic indicator that measures the short-term performance of core industrial sectors:
  Mining
  Manufacturing
  Electricity

• Purpose: Tracks industrial output and is a key input for policy-making, economic forecasting, and monitoring the business cycle.

Why is the Base Year Being Revised?

• India’s economy has significantly evolved since 2011–12:

  • Service sector now contributes ~62.5% to Gross Value Added (GVA)

  • New industries and products have emerged

  • Technological advancement and digitalization have altered production and consumption patterns

• A revised base year ensures:

  • Relevance of product basket

  • Accurate assessment of growth trends

  • Improved policy decisions aligned with ground realities

New Features of the Revised IIP (2022–23)

Exam Connect – Possible Questions

Prelims

1. The Index of Industrial Production (IIP) in India is published by:
A. Reserve Bank of India
B. Ministry of Commerce and Industry
C. National Statistical Office (NSO)
D. NITI Aayog
Answer: C. National Statistical Office (NSO)

2. Which of the following sectors are included in the Index of Industrial Production (IIP)?
1.Manufacturing
2.Electricity
3.Services
4.Mining
Select the correct answer using the code below:
A. 1, 2 and 3
B. 1, 2 and 4
C. 2, 3 and 4
D. 1, 3 and 4
Answer: B. 1, 2 and 4

Mains

1.Discuss the significance of revising the base year of the Index of Industrial Production (IIP) in the context of India’s evolving economic structure. How will this impact economic policymaking and growth assessment?(150 words)

2.”Updating economic indicators like IIP is essential for real-time policymaking in dynamic economies.” In light of this statement, analyze the challenges and opportunities associated with the revision of the IIP base year. (250 words)

3. India’s Long History of Resistance to Economic Domination -Economy

Why in News?

Recent trade negotiations between India and the United States remain stalled due to:

• Tariffs on Indian goods raised up to 50% by the Trump administration

• A further 25% duty imposed on Russian oil imports by India

These developments have reignited discussions about India’s economic sovereignty and its historical resistance to external economic domination.

Historical Context: Colonial Economic Exploitation

India’s modern trade stance is deeply rooted in its experience under British colonial rule, which transformed India from a self-sufficient economy to a dependent colony.

Key Phases of Colonial Capitalism:

Key Concepts & Thinkers

Dadabhai Naoroji’s “Drain Theory” (1901)

• Book: Poverty and Un-British Rule in India

• Argued that India’s wealth was being systematically drained to Britain

• Famous Quote:
  
  “The British Indian Empire is formed and maintained entirely by Indian money and mainly by Indian blood.”

Consequences of Colonial Economic Policies

• De-industrialization of Indian handloom and artisan industries

• Agrarian stagnation and rural poverty

• Excessive taxation and land revenue systems

• Frequent famines due to neglect of food security

• Infrastructural development focused on colonial extraction needs, not local welfare

Intellectual Critiques and Economic Nationalism

Indian thinkers and reformers pushed back against colonial economic policies by:

• Exposing exploitative practices

• Advocating for swadeshi industries

• Promoting indigenous entrepreneurship and economic self-reliance

Post-Independence Economic Reconstruction

After 1947, India faced a devastated economy:

• Heavily agrarian, poor industrial base

• Adopted a mixed economy model (state + market intervention)

• Creation of Planning Commission to guide central planning

• Emphasis on self-reliance, public sector undertakings (PSUs), and import substitution

Economic Reforms and Strategic Autonomy

• 1991 Liberalization shifted focus to market-led growth and globalization

• India began balancing global integration with strategic autonomy

• Emphasis on Atmanirbhar Bharat, domestic manufacturing, and equitable growth

Contemporary Trade Dynamics with the U.S.

India’s refusal to submit to unilateral tariff hikes or trade pressure from the U.S. reflects:

• A continuation of its historical stance on economic sovereignty

• Preference for multilateral negotiations over bilateral coercion

• Pursuit of strategic partnerships without compromising domestic priorities

Exam Connect – Possible Questions

Prelims

1. The “Drain Theory” in colonial India was first systematically articulated by:
A. Mahatma Gandhi
B. Bal Gangadhar Tilak
C. Dadabhai Naoroji
D. R.C. Dutt
Answer: C. Dadabhai Naoroji

2. Which of the following is not a characteristic of Finance Capitalism in colonial India?
A. Dominance of private British investment in infrastructure
B. Expansion of the Indian textile industry
C. Increased foreign control of plantations and mining
D. Growth of shipping and transport for British interests
Answer: B. Expansion of the Indian textile industry

Mains

1. Examine how India’s colonial economic history continues to shape its modern trade and industrial policies. Do current trade disputes with global powers reflect a continuation of this legacy? (150 words)

2.”From economic dependence to strategic autonomy: India’s journey from colonial exploitation to contemporary global negotiations reflects a consistent assertion of sovereignty.” Discuss with examples from both history and current economic policies. (250 words)

4. RBI Launches Unified Markets Interface (UMI) to Tokenise Assets – Economy

Why in News?

The Reserve Bank of India (RBI) has launched the Unified Markets Interface (UMI) to enable:

• Tokenisation of financial assets

• Settlement using wholesale Central Bank Digital Currency (CBDC)

This marks a major innovation in India’s financial infrastructure and fintech ecosystem.

Key Highlights

What is Asset Tokenisation?

• It is the conversion of real-world financial assets (like securities, bonds) into digital tokens stored on a blockchain.

Benefits:

• Fractional Ownership: Even small investors can own parts of high-value assets.

• Improved Liquidity: Tokens can be traded more easily across borders and platforms.

• Transparency: Blockchain records are immutable and auditable.

• Speed: Settlements are faster via automated smart contracts.

Integration with Wholesale CBDC

• Wholesale CBDC = A digital currency issued by RBI for use by financial institutions, not the public.

• It ensures:

  • Secure settlements

  • Reduced counterparty risk

  • Real-time gross settlement (RTGS) on digital platforms

Why is UMI Significant?

Context: India’s Fintech Push

• UMI and tokenisation align with:

  • Digital India goals

  • RBI’s promotion of technology-driven finance

  • India’s growing presence in global financial innovation

Challenges Ahead

• Regulatory clarity on tokenised securities

• Cybersecurity and data protection

• Interoperability with existing market systems

• Investor awareness and adoption

Exam Connect – Possible Questions

Prelims

1. The Unified Markets Interface (UMI), recently launched by the RBI, is primarily aimed at:
A. Promoting digital payments at the retail level
B. Facilitating digital lending by NBFCs
C. Enabling tokenisation and settlement of assets via CBDC
D. Regulating cryptocurrency exchanges
Answer: C. Enabling tokenisation and settlement of assets via CBDC

2. What is “wholesale CBDC” used for?
A. Personal retail transactions by individuals
B. Peer-to-peer payments among citizens
C. Institutional financial settlements
D. Cross-border remittances for migrant workers
Answer: C. Institutional financial settlements

Mains

1.Discuss the significance of the Unified Markets Interface (UMI) launched by the RBI in transforming India’s financial market infrastructure. How does it integrate asset tokenisation and wholesale CBDC? (150 words)

2.”Tokenisation of financial assets using digital currencies can democratize capital markets and improve efficiency.” Critically examine this statement in the Indian context, highlighting both potential and challenges. (250 words)

5. New Delhi’s Growing Engagement with the Taliban -International Relations

Why in News?

Afghanistan’s Foreign Minister Amir Khan Muttaqi visited India — his first official visit since the Taliban’s return to power in August 2021. This visit marks a significant shift in India’s foreign policy, reflecting a strategic recalibration toward engaging with the Taliban without granting formal recognition.

Key Highlights of India’s Engagement with the Taliban

Historical Context

• 1999 IC-814 Hijacking:
  India’s first direct interaction with the Taliban occurred during the hijacking of Indian Airlines Flight IC-814.
  Outcome: India was forced to negotiate with Taliban authorities in Kandahar, shaping a long-standing caution in policy.

Current Diplomatic Approach

• Post-2021 Strategy:
  India began incremental diplomatic contacts while:

  • Avoiding formal recognition

  • Focusing on humanitarian outreach and regional dialogues

• Regional Engagements:
  In January 2024, Afghan Foreign Minister Muttaqi hosted a multilateral meeting with diplomats from 11 countries, including India.
  This signaled India’s acceptance of the new reality in Afghanistan and a move toward practical diplomacy.

India’s Strategic Interests

Challenges and Concerns

• Taliban’s regressive stance on women’s rights and minority representation

• Uncertainty over Taliban’s internal cohesion and governance capacity

• Human rights abuses and lack of democratic norms

• Balancing pragmatism with principled foreign policy

Significance for India’s Foreign Policy

India’s engagement with the Taliban illustrates:

• A shift from idealism to realism

• Emphasis on regional influence without compromising core democratic values

• Recognition that non-engagement could isolate India from regional developments

India’s evolving stance is about securing national interests and promoting regional peace, rather than legitimizing the Taliban regime.

Exam Connect – Possible Questions

Prelims

1. India’s first significant diplomatic engagement with the Taliban occurred during:
A. Operation Enduring Freedom (2001)
B. Signing of the Doha Agreement (2020)
C. IC-814 Hijacking Incident (1999)
D. Taliban’s return to power in 2021
Answer: C. IC-814 Hijacking Incident (1999)

2. Which of the following is not a reason behind India’s engagement with the Taliban?
A. Promoting women’s education under Taliban rule
B. Ensuring regional stability and countering Pakistan’s influence
C. Facilitating humanitarian assistance
D. Securing Indian infrastructure and investments in Afghanistan
Answer: A. Promoting women’s education under Taliban rule
(While India advocates for women’s rights, it is not the primary driver of engagement.)

Mains

1.Discuss the factors driving India’s engagement with the Taliban despite not recognizing their government. What strategic interests does India seek to protect in Afghanistan? (150 words)

2.”India’s policy towards Afghanistan is a blend of strategic pragmatism and moral caution.” Critically analyze this statement in light of recent diplomatic developments between India and the Taliban. (250 words)