Subject: Environment & Ecology (Protected Areas, Avian Biodiversity, Ramsar Sites, Wildlife Conservation)

Why in News?

A recent avifaunal assessment in Kaziranga National Park and Tiger Reserve recorded 30 species of raptors (birds of prey) and six species of storks, reaffirming the park’s importance as a critical habitat for avian biodiversity in northeastern India. The findings highlight Kaziranga’s role beyond being a refuge for the one-horned rhinoceros.

About Kaziranga National Park

• Located in the state of Assam along the floodplains of the Brahmaputra River. 
• Declared a National Park in 1974. 
• Recognized as a Kaziranga National Park UNESCO World Heritage Site in 1985. 
• Also designated as a Tiger Reserve, Important Bird Area (IBA), and a Ramsar Site. 
• Famous for hosting the world’s largest population of the Indian One-Horned Rhinoceros. 

Key Findings of the Survey

• Recorded 30 species of raptors, indicating a healthy food chain and ecosystem. 
• Identified six species of storks, including globally significant wetland-dependent birds. 
• Wetlands, grasslands, and riverine habitats support diverse resident and migratory bird populations. 
• Presence of apex avian predators reflects strong ecological integrity. 

Important Bird Species Found

Raptors

• Pallas’s Fish Eagle (Endangered) 
• Grey-headed Fish Eagle 
• Lesser Adjutant 

Storks

• Greater Adjutant (Endangered) 
• Black-necked Stork 
• Asian Openbill 

UPSC Prelims-Oriented Analysis

• Kaziranga is a favorite UPSC location-based topic due to its multiple conservation designations. 
• Important static–dynamic linkage between wetland ecosystems, grassland ecology, and bird conservation. 
• Potential MCQs may focus on: 
  • Location of Kaziranga and the river associated with it. 
  • UNESCO, Ramsar, and Tiger Reserve status. 
  • Difference between raptors and scavenging birds. 
  • Conservation status of Greater Adjutant and Pallas’s Fish Eagle. 
  • Protected areas of the Brahmaputra floodplain. 

Source/Reference:

https://www.thehindu.com/news/national/kaziranga-national-park-records-30-raptor-and-six-stork-species/article71069139.ece#google_vignette

Subject: Polity & Governance (Fundamental Rights, Article 21, Criminal Justice System, Judicial Interpretation)

Why in News?

The Supreme Court recently held that an accused person’s right to travel abroad cannot be treated as absolute and must be balanced against the victim’s right to a speedy trial and the broader interests of justice. The Court restored a magistrate’s order requiring the accused to obtain prior court permission before travelling overseas. 

Constitutional Basis

• The Right to Travel Abroad has been recognized as part of the Right to Personal Liberty under Article 21 of the Constitution. 
• The landmark judgment in Maneka Gandhi v. Union of India expanded the scope of Article 21 and recognized foreign travel as a component of personal liberty. 

Supreme Court’s Observations

• An accused does not lose all constitutional rights merely because criminal proceedings are pending. 
• However, courts must ensure that foreign travel does not: 
  • Delay trial proceedings. 
  • Affect the administration of justice. 
  • Increase the risk of absconding. 
• The right of victims and society to a speedy trial must also be protected. 

Related Legal Concepts

• Article 21 – Right to Life and Personal Liberty. 
• Speedy Trial – Recognized as a fundamental right under Article 21 through judicial interpretation. 
• Passport Act, 1967 – Governs issuance, impounding, and regulation of passports. 
• Courts may impose conditions such as security deposits, travel itineraries, or limited-duration permissions. 

UPSC Prelims-Oriented Analysis

• Important example of how the Supreme Court balances individual liberty with societal and judicial interests. 
• Establishes the linkage between: 
  • Right to Travel Abroad (Article 21), 
  • Right to Speedy Trial (Article 21), 
  • Criminal justice administration. 
• Possible UPSC questions may focus on: 
  • Constitutional status of the right to travel abroad. 
  • Landmark judgments expanding Article 21. 
  • Relationship between personal liberty and reasonable restrictions. 
  • Concept of speedy trial as a fundamental right. 

Source/Reference:

https://www.thehindu.com/news/national/right-to-travel-abroad-of-accused-must-be-balanced-with-victims-right-to-speedy-trial-supreme-court/article71069272.ece

Subject: Science & Technology (Nuclear Energy, Nuclear Fuel Cycle, Spent Fuel Reprocessing, Advanced Reactor Technologies)

Why in News?

Pyroprocessing has recently gained attention due to discussions on its role in reprocessing spent nuclear fuel and its potential relevance for advanced nuclear energy programmes, including those linked to fast breeder reactors. 

What is Pyroprocessing?

• Pyroprocessing is a high-temperature, dry industrial process used to bring about physical or chemical changes in materials. 
• Unlike conventional aqueous methods, it uses molten salts and electrochemical techniques rather than liquid solvents. 
• It is highly energy-intensive and finds applications in cement manufacturing, metallurgy, and the nuclear sector. 

Pyroprocessing in the Nuclear Industry

How it Works

1. Spent nuclear fuel is chopped into small pieces. 
2. The fuel is placed in a molten salt bath, typically a mixture of lithium chloride (LiCl) and potassium chloride (KCl) at temperatures above 500°C. 
3. An electric current is passed through the bath. 
4. Uranium, plutonium, and other actinides are separated based on their electrochemical properties. 

Advantages

• Reduces the volume of radioactive waste. 
• Facilitates recycling of valuable nuclear materials. 
• Considered more suitable for fast breeder reactor (FBR) fuel cycles. 
• Does not require organic solvents used in the conventional PUREX (Plutonium Uranium Redox Extraction) process. 

Relevance for India

• Supports India’s Three-Stage Nuclear Programme envisioned by Homi Jehangir Bhabha. 
• Particularly important for Stage II (Fast Breeder Reactors) and the long-term utilization of India’s vast thorium reserves. 
• Research on advanced fuel-cycle technologies is undertaken at Indira Gandhi Centre for Atomic Research, Tamil Nadu. 

UPSC Prelims-Oriented Analysis

• UPSC frequently asks questions on the nuclear fuel cycle, reprocessing technologies, and India’s thorium-based nuclear strategy. 
• Key distinctions between pyroprocessing (dry process) and PUREX (wet process) are important. 
• Possible MCQs may test: 
  • Components of India’s Three-Stage Nuclear Programme. 
  • Role of Fast Breeder Reactors. 
  • Use of molten salts in nuclear fuel reprocessing. 
  • Institutions associated with advanced nuclear research. 

Source/Reference:

https://www.thehindu.com/sci-tech/science/what-is-pyroprocessing/article71072743.ece

Subject: Economy / International Trade (Trade Policy, WTO, Bilateral Trade Agreements, Trade Disputes)

Why in News?

During ongoing negotiations for a proposed India–U.S. trade agreement, India has reportedly sought safeguards against future investigations under Section 301 of the U.S. Trade Act of 1974. The issue has emerged as a key concern because Section 301 allows the United States to unilaterally investigate and impose trade measures against countries deemed to engage in unfair trade practices.

What is Section 301?

• Section 301 is a provision of the U.S. Trade Act, 1974. 
• It authorizes the Office of the United States Trade Representative (USTR) to: 
  • Investigate foreign trade practices. 
  • Determine whether they are discriminatory or unreasonable. 
  • Recommend retaliatory actions such as tariffs or trade restrictions. 

Key Features

• Allows the U.S. to act unilaterally, even before multilateral dispute settlement mechanisms are exhausted. 
• Targets practices that: 
  • Restrict U.S. market access. 
  • Violate trade agreements. 
  • Harm U.S. commerce or intellectual property rights. 
• Investigations can result in: 
  • Additional tariffs. 
  • Import restrictions. 
  • Suspension of trade concessions. 

Major Examples

• China (2018–present): Section 301 investigations led to tariffs on hundreds of billions of dollars worth of Chinese goods, triggering the U.S.–China trade war. 
• Digital Services Taxes (DSTs): Investigations were launched against several countries, including India, over taxes imposed on large digital companies. 

Section 301 vs WTO Dispute Settlement

UPSC Prelims-Oriented Analysis

• Important linkage between domestic trade laws and global trade governance. 
• UPSC may ask: 
  • Which country uses Section 301? 
  • Difference between WTO dispute settlement and unilateral trade actions. 
  • Role of USTR. 
  • Impact of Section 301 investigations on global trade relations. 
• The topic is also relevant for understanding tensions between rules-based multilateralism (WTO) and unilateral trade enforcement measures adopted by major economies. 

Quick Prelims Facts

• Law: U.S. Trade Act, 1974. 
• Implementing Agency: USTR. 
• Purpose: Address unfair foreign trade practices. 
• Nature: Unilateral trade enforcement mechanism. 
• Frequently linked with: China tariffs, digital taxes, market-access disputes, and intellectual property concerns. 

Source/Reference:

https://www.bloomberg.com/news/articles/2026-06-08/india-seeks-protection-from-future-trade-probes-in-us-deal

Subject: Environment & Ecology / Science & Technology (Fungal Diversity, Biodiversity Conservation, Species Discovery, Eastern Himalayas)

Why in News?

Researchers have recorded Bovista colorata, a rare species of yellow puffball mushroom, in Longding district of Arunachal Pradesh. This is the first documented record of the species in India, expanding its known geographical distribution and highlighting the rich fungal biodiversity of the Eastern Himalayan region.

About Bovista colorata

• Bovista colorata is a species of puffball mushroom belonging to the family Agaricaceae. 
• Previously reported mainly from parts of East Asia, including China and Japan. 
• The recent discovery marks its first confirmed occurrence in India. 

Key Characteristics

• Distinctive yellow to yellowish-brown fruiting body. 
• Spherical or nearly spherical structure resembling a small ball. 
• Reproduces through microscopic spores. 
• When mature, the outer covering ruptures, releasing spores into the atmosphere. 
• Grows on soil-rich forest floors, especially in moist environments. 

Ecological Importance of Fungi

• Act as decomposers, breaking down dead organic matter. 
• Play a crucial role in nutrient cycling and soil fertility. 
• Form mycorrhizal associations with plant roots, enhancing nutrient uptake. 
• Serve as indicators of ecosystem health and biodiversity. 

About Arunachal Pradesh’s Biodiversity Significance

• Part of the Eastern Himalaya Biodiversity Hotspot. 
• Characterized by high endemism and rich diversity of flora, fauna, and fungi. 
• Dense forests and varied altitudinal gradients support numerous undiscovered species. 

UPSC Prelims-Oriented Analysis

• UPSC frequently asks about newly discovered species and biodiversity hotspots. 
• Important static–dynamic linkage: 
  • Kingdom Fungi and ecological roles of decomposers. 
  • Eastern Himalaya Hotspot and species richness. 
  • Differences between fungi, plants, and lichens. 
• Potential MCQs may focus on: 
  • Ecological functions of fungi. 
  • Characteristics of puffball mushrooms. 
  • Biodiversity hotspots of India. 
  • Newly discovered or newly recorded species from the Northeast. 

Source/Reference:

https://assamtribune.com/north-east/rare-yellow-puffball-mushroom-recorded-in-arunachals-longding-district-1612458

Subject: Science & Technology (Space Science) / Geography (Solar Storms, Space Weather, Earth’s Magnetosphere, Atmospheric Phenomena)

Why in News?

A powerful solar storm associated with Solar Cycle 25 is expected to make the Aurora Borealis (Northern Lights) visible across unusually low latitudes, including parts of northern India such as Ladakh and high-altitude Himalayan regions under favorable conditions. The event has generated significant scientific interest due to its intensity and rare visibility range.

What is Aurora Borealis?

• Aurora Borealis (Northern Lights) is a natural light display seen primarily in high-latitude regions near the Arctic Circle. 
• Its southern counterpart is called Aurora Australis (Southern Lights). 
• Occurs when charged particles emitted by the Sun interact with gases in Earth’s upper atmosphere. 

How are Auroras Formed?

1. The Sun releases charged particles through the solar wind. 
2. During solar flares and Coronal Mass Ejections (CMEs), the number of particles increases significantly. 
3. Earth’s magnetosphere channels these particles toward the polar regions. 
4. Collisions with atmospheric gases produce colorful light emissions: 
   • Green: Oxygen (most common) 
   • Red: High-altitude oxygen 
   • Blue/Purple: Nitrogen 

Key Scientific Concepts

• Solar Wind: Stream of charged particles emitted by the Sun. 
• Coronal Mass Ejection (CME): Massive eruption of plasma and magnetic fields from the Sun. 
• Geomagnetic Storm: Disturbance in Earth’s magnetic field caused by solar activity. 
• Magnetosphere: Protective magnetic shield surrounding Earth. 

Impact of Strong Solar Storms

• Disruption of satellite communications. 
• GPS and navigation errors. 
• Radio communication disturbances. 
• Potential impact on power grids. 
• Enhanced auroral visibility at lower latitudes. 

UPSC Prelims-Oriented Analysis

• UPSC frequently asks questions on space weather, solar activity, and atmospheric phenomena. 
• Important static–dynamic linkage between: 
  • Solar Cycles and Sunspots. 
  • Earth’s magnetic field and auroral formation. 
  • Space weather impacts on communication and navigation systems. 
• Potential MCQs may test: 
  • Difference between aurora and ozone-related phenomena. 
  • Role of oxygen and nitrogen in auroral colors. 
  • Relationship between CMEs, geomagnetic storms, and auroras. 
  • Locations where auroras are commonly observed. 

Source/Reference:

https://www.thehindu.com/sci-tech/science/aurora-in-india-2026-solar-storm-to-cause-northern-lights-when-where-how-to-see/article71075700.ece

Subject: History (Medieval India) (Regional Kingdoms, Mughal Empire, Bundelkhand, Maratha Expansion)

Why in News?

Maharaja Chhatrasal was recently commemorated during the Mahua Festival at the Madhya Pradesh Tribal Museum, where a dance-drama showcased the life and legacy of the legendary Bundela ruler, popularly known as “Bundel Kesari” (Lion of Bundelkhand). 

Who was Maharaja Chhatrasal?

• Born in 1649 to Champat Rai Bundela of the Bundela Rajput clan. 
• Founded an independent kingdom in Bundelkhand after challenging Mughal authority. 
• Ruled from 1675 to 1731 and established Panna as an important centre of power. 

Struggle Against the Mughals

• Inspired by the resistance movements against Mughal rule. 
• Launched his campaign against the Mughals in 1671. 
• Fought for nearly five decades, gradually liberating large parts of Bundelkhand from Mughal control. 

Association with the Marathas

• Sought assistance from Baji Rao I against Mughal commander Muhammad Khan Bangash in 1728. 
• In gratitude, he ceded parts of Bundelkhand to the Marathas. 
• Tradition holds that Mastani, associated with Baji Rao I, was Chhatrasal’s daughter. 

Cultural & Religious Contributions

• Patron of poets such as Kavi Bhushan and Lal Kavi. 
• Disciple of Mahamati Prannath, founder of the Pranami tradition. 
• His reign is remembered for administrative efficiency and promotion of regional culture. 

UPSC Prelims-Oriented Analysis

• Important for understanding the decline of Mughal authority and the rise of regional powers in the 17th–18th centuries. 
• Static linkage with Maratha expansion, Bundelkhand geography, and regional resistance movements. 
• Potential MCQs may focus on: 
  • Chhatrasal’s kingdom (Panna/Bundelkhand). 
  • His alliance with Baji Rao I. 
  • His role in weakening Mughal influence in Central India. 
  • Cultural and religious movements associated with Bundelkhand. 

Source/Reference:

https://timesofindia.indiatimes.com/city/bhopal/day-2-of-mahua-festival-pays-tribute-to-bundel-kesari-maharaja-chattrasal/articleshow/131573489.cms

GS Paper II – Social Justice (Health) | GS Paper I – Society (Women)
Maternal Health; Antenatal Care; High-Risk Pregnancy; Institutional Deliveries; SDG 3

Introduction

Launched in 2016, the Pradhan Mantri Surakshit Matritva Abhiyaan (PMSMA) provides free antenatal care and early risk detection for pregnant women. Over the past decade, it has served more than 7.5 crore women and contributed to improved maternal health outcomes, reflected in the decline of India’s Maternal Mortality Ratio from 130 to 87 per lakh live births.

Main Body

Why Maternal Health Matters

The Importance:

• Every pregnancy carries hope for the family, community, and nation.
• Pregnancy involves risks that, if not identified and managed in time, may endanger the lives of both mother and child.
• Maternal health is a key indicator of the strength and inclusiveness of a country’s healthcare system.

Maternal Mortality Ratio (MMR):

• Defined as the number of maternal deaths per 1 lakh live births during a given period.
• Maternal death: death during pregnancy or within 42 days of termination due to causes related to or aggravated by pregnancy.

Pre-PMSMA Context:

• Before 2016, maternal mortality remained a major public health challenge.
• During 2014-16, India’s MMR stood at 130 per lakh live births.
• SDG target: reduce maternal mortality to below 70 per lakh live births by 2030.
• National Health Policy, 2017 identified maternal health as a key priority.

Key Features of PMSMA

Service Delivery:

• Conducted on the 9th of every month at designated government health facilities.
• Minimum one comprehensive antenatal checkup by Obstetrician & Gynaecologist or CEmONC-trained doctor during second or third trimester.
• Service package: clinical examinations, laboratory investigations (blood and urine tests), ultrasonography, medicines, counselling on nutrition, birth planning, and safe pregnancy practices.

High-Risk Pregnancy (HRP) Management:

• Screening for 25 high-risk factors (including HIV, syphilis, severe anaemia, pregnancy-induced hypertension, gestational diabetes, hypothyroidism, tuberculosis, malaria, previous LSCS, bad obstetric history, multiple pregnancy, Hepatitis B, teenage pregnancy, elderly primi, grand multipara, etc.).
• HRPs linked to nearest First Referral Unit (FRU) for safe delivery.
• Sticker indicating condition and risk factor added to Mother and Child Protection card for each visit.

Private Sector Participation:

• Doctor Volunteer System: OB-GYN specialists, radiologists, physicians from private sector volunteer on the 9th of every month.
• Prime Minister called on doctors to dedicate just 12 days a year to this cause (Mann Ki Baat).
• ‘IPledgeFor9’ Achievers Awards for volunteer contributions.

Extended PMSMA (January 2022)

Objective:

• Strengthen follow-up care for high-risk pregnancies.

Key Features:

• Women identified as high-risk receive additional antenatal check-ups, continuous monitoring, and timely medical support throughout pregnancy.
• Every high-risk pregnancy is individually tracked until safe delivery.
• Financial incentives for beneficiary and accompanying ASHA worker for up to three additional visits.
• SMS alerts sent to beneficiary and ASHA worker for HRP registration and follow-up visits.

Achievements and Impact

Coverage:

• More than 7.50 crore pregnant women have received antenatal services under PMSMA (in addition to routine ANC checkup services).

MMR Reduction:

• India’s MMR declined from 130 (2014-16) to 87 (2022-24) per lakh live births.
• Reduction of 43 points over the decade.
• Demonstrates how focused interventions can save thousands of lives.

Complementary Maternal Health Initiatives

Janani Suraksha Yojana (JSY):

• Promotes institutional deliveries.
• Since 2014-15, benefited more than 11.96 crore women (as of March 2025).

Janani Shishu Suraksha Karyakram (JSSK):

• Provides free healthcare services to pregnant women and newborns.
• Since 2014-15, more than 18.05 crore beneficiaries.

Surakshit Matritva Aashwasan (SUMAN):

• Strengthens quality maternal healthcare through a network of over 99,290 facilities.

Other Initiatives:

• POSHAN Abhiyaan (maternal nutrition).
• Pradhan Mantri Matru Vandana Yojana (PMMVY) (maternity benefits).
• Labour Room Quality Improvement Initiative (LaQshya) (quality of care in labour rooms).

Tenth Anniversary Commemoration (June 2026)

Ayushman Arogya Shivirs:

• Quality antenatal care services being provided at 1.8 lakh Ayushman Aarogya Mandirs.

Community Awareness:

• Through Village Health Sanitation and Nutrition Day (VHSND).
• Jan Arogya Samiti (JAS) and Self-Help Groups (SHGs).

Special PMSMA Sessions:

• At all District Hospitals / Sub-District Hospitals / First Referral Units (FRU) and other designated PMSMA facilities.

Looking Ahead: Viksit Bharat@2047

Vision:

• PMSMA will continue to transform the maternal healthcare landscape.
• Ensure that every pregnancy is safer and every mother receives the care she deserves.
• Aim: No woman loses her life while giving life.

The Road Ahead:

• MMR reduction from 130 to 87 demonstrates progress, but SDG target of below 70 remains to be achieved.
• Continued focus on high-risk pregnancy tracking and follow-up care.
• Strengthening convergence with other maternal health initiatives.

Challenges:

• SDG target of below 70 per lakh live births not yet achieved (87 currently).
• Coverage of 7.50 crore women over 10 years is significant but still leaves gaps.
• Quality of care at designated facilities varies across states.
• ASHA worker incentives for follow-up visits may not be sufficient for sustained tracking.

The Core Reality:

• PMSMA has transformed antenatal care delivery in India.
• Early risk detection and timely intervention save lives.
• The programme has contributed significantly to the 43-point reduction in MMR.
• However, India still needs to reduce MMR from 87 to below 70 to meet the SDG target by 2030.

Conclusion

Over the past decade, PMSMA has strengthened maternal healthcare through free antenatal services, early identification of high-risk pregnancies, and improved follow-up care. Supported by complementary maternal and nutrition schemes, it has contributed to a significant decline in maternal mortality, advancing the goal of safe motherhood and inclusive healthcare.

UPSC Mains Practice Question

1. Examine the role of the Pradhan Mantri Surakshit Matritva Abhiyaan (PMSMA) in improving maternal health outcomes in India. How does it address high-risk pregnancies? (250 words, 15 marks)

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2270486&reg=3&lang=1

GS Paper III – Economy (Trade; Industrial Policy) | GS Paper II – International Relations
Free Trade Agreements (FTAs); Trade Deficits; Tariff Asymmetry; Inverted Duty Structure; Make in India

Introduction

India’s expanding network of Free Trade Agreements (FTAs) offers greater market access and export opportunities. However, concerns such as rising trade deficits, low utilisation of FTA benefits, inverted duty structures, and the relocation of manufacturing to partner countries highlight the need for careful trade policy design to safeguard domestic industry and employment.

Main Body

Challenge One: Rising Trade Deficits

The Data:

• Between 2007-09 (before FTAs took effect) and 2024-25, India’s trade deficit:
  • With ASEAN grew by 381%.
  • With Japan grew by 318%.
  • With South Korea grew by 268%.
• In comparison, trade deficit with the rest of the world increased by 142%.
• Over the past three years, average annual trade deficit with ASEAN, Japan, and South Korea: about $62 billion.

Newer FTAs:

• In FY2025, India exported $48.6 billion to UAE, Australia, Mauritius, and EFTA countries.
• Imported nearly $100 billion.
• Trade deficit of over $50 billion.
• As tariff cuts under these agreements deepen, the deficit may increase further.

Exception:

• South Asia: India’s trade surplus expanded from $6.7 billion to $20 billion during the same period.

Challenge Two: Low Utilisation of FTA Benefits by Indian Exporters

The Tariff Asymmetry:

• Most of India’s FTA partners are already open economies with low tariffs.
• Average MFN tariffs: close to zero in Singapore; below 4% in Japan, Australia, Malaysia, and UAE.
• India’s trade-weighted MFN tariff: about 12.6% (ranging from zero to 150%).

Why Indian Exporters Don’t Use FTAs:

• When MFN tariffs in partner countries are already zero, there is little benefit in exporting under an FTA.
• Even where MFN tariffs are low (1-3%), savings are too small to justify compliance costs (rules of origin, certification, paperwork).
• Only an estimated 20-30% of India’s eligible exports take advantage of FTA preferences.

Import-Side Utilisation:

• India’s MFN tariffs remain relatively high, so tariff reductions under FTAs generate substantial savings for foreign exporters.
• Import-side utilisation rates estimated at 60-70%.

The Core Insight:

• Rising imports and low export-side utilisation are not separate issues. Both stem from the same tariff asymmetry between India and its FTA partners.

Challenge Three: Worsening Inverted Duty Structures

What Is an Inverted Duty Structure:

• Duties on raw materials and industrial inputs are higher than those on finished products.
• Many finished goods now enter India at low or zero duty from FTA partners (ASEAN, Japan, South Korea, UAE, Australia).
• Indian manufacturers pay high duties on imported inputs (especially from non-FTA countries) while competing against duty-free finished products.

Example – Steel and Aluminium:

• Steel and aluminium attract MFN duties of 7.5-10%.
• Machinery, industrial equipment, and engineering products made from these materials can enter India duty-free under several FTAs.
• Indian manufacturers face higher input costs when competing with tariff-free imported machinery.

Other Sectors with Similar Distortions:

• Chemicals, plastics, rubber, and textiles.
• Duties on inputs such as caustic soda, soda ash, polypropylene, PVC, and SBR raise production costs.
• Finished products in these sectors can be imported at low or zero duty.

The Consequence:

• Protects producers of basic materials but disadvantages downstream manufacturing.
• Makes it harder to achieve higher domestic value addition and the goals of Make in India.

Challenge Four: Make in ASEAN, Sell in India

The Incentive:

• When raw materials and components attract duties in India, but finished products can be imported duty-free from FTA partners, companies may find it more profitable to locate production abroad and export back to India.
• FTAs effectively encourage offshore manufacturing at the expense of domestic value addition.

ASEAN as Manufacturing Hub:

• Chinese companies have invested heavily in Vietnam, Thailand, and Indonesia.
• Some Indian firms have also set up factories and joint ventures there to benefit from lower production costs and duty-free access to India under FTAs.

Sectors Affected:

• Electronics, steel, chemicals, plastics, consumer goods, and engineering products.

The Core Problem:

• When it becomes cheaper to manufacture in an ASEAN country and export duty-free to India than to produce in India, investment and jobs tend to move abroad.
• FTAs can encourage firms to “Make in ASEAN, Sell in India” rather than “Make in India”.

Way Forward: Addressing the Four Challenges

For Rising Trade Deficits:

• Negotiate FTAs more carefully, ensuring that tariff reductions are reciprocated with meaningful market access for Indian exports.
• Focus on services and digital trade where India has comparative advantage.

For Low FTA Utilisation by Exporters:

• Simplify rules of origin and certification requirements.
• Provide awareness and handholding support to MSME exporters.
• Negotiate deeper tariff cuts in partner countries where MFN tariffs are not already zero.

For Inverted Duty Structures:

• Rationalise duties on raw materials and industrial inputs.
• Align India’s tariff structure with its FTA commitments.
• Ensure that downstream manufacturing is not disadvantaged.

For “Make in ASEAN, Sell in India”:

• Reduce duties on industrial inputs to make domestic manufacturing competitive.
• Strengthen domestic supply chains to reduce dependence on imported inputs.
• Ensure that FTAs support “Make in India” rather than undermining it.

The Bottom Line:

• The government and industry must work together to address these four challenges.
• FTAs should strengthen India’s manufacturing base instead of encouraging higher imports, overseas production, and loss of industrial capacity.

Conclusion

India’s growing FTA network can boost trade and exports, but it also raises concerns over widening trade deficits, low utilisation of FTA benefits, inverted duty structures, and the shifting of manufacturing to partner countries. To ensure FTAs support domestic industry, India must better align input tariffs with its trade commitments and strengthen the competitiveness of local manufacturing.

UPSC Mains Practice Question

1. Examine the key challenges associated with India’s Free Trade Agreements (FTAs). How do tariff asymmetries and inverted duty structures affect domestic manufacturing and the Make in India initiative? (250 words, 15 marks)

https://indianexpress.com/article/opinion/columns/india-fta-efta-asean-tariff-mfn-trade-deficit-10729899/