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DAILY CURRENT AFFAIRS, 14 MAY 2025

RETAIL INFLATION

 

1. Context

Retail inflation in India eased for the sixth straight month in April 2025, falling to 3.16% — its lowest level in 69 months

2. What is Inflation?

  • It is the rise in prices of goods and services within a particular economy wherein consumers' purchasing power decreases, and the value of the cash holdings erodes.
  • In India, the Ministry of Statistics and Programme Implementation (MoSPI) measures inflation.
  • Some causes that lead to inflation are demand increases, reduction in supply, demand-supply gap, excess circulation of money, increase in input costs, devaluation of the currency, and rise in wages, among others.

3. Retail Inflation

Consumers often directly buy from retailers. So, the inflation experienced at retail reflects the actual price rise in the country. It also shows the cost of living better. In India, the index that reflects the inflation rate at the retail level is known as Consumer Price Index (CPI). Unlike WPI, CPI includes both goods and services. CPI is used to calculate the Dearness Allowance (DA) for government employees.

4. How Inflation is measured?

  • In India, inflation is primarily measured by two main indices- WPI (Wholesale Price Index) and CPI (Consumer Price Index), Which measures Wholesale and retail-level price changes, respectively.
  • The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics, etc, which Indian consumers buy for use.
  • On the other hand, the goods or services sold by businesses to smaller businesses for selling further are captured by the WPI.
  • Both WPI (Wholesale Price Index) and CPI (Consumer Price Index) are used to measure inflation in India. 

5. What is the Inflation Target?

  • Under Section 45ZA, in consultation with the RBI Act, the Central Government determines the inflation target in terms of the Consumer Price Index (CPI), once in five years and notifies it in the Official Gazette.
  • Accordingly, on August 5, 2016, the Central Government notified in the Official Gazette 4 percent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016, to March 31, 2021, with the upper tolerance limit of 6 percent and the lower tolerance limit of 2 percent.
  • On March 31, 2021, the Central Government retained the inflation target and the tolerance band for the next 5-year period-April 1, 2021 to March 31, 2026.
  • Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.

6. Monetary Policy Committee (MPC)

  • The MPC is a statutory and institutionalized framework under the RBI Act, of 1934, for maintaining price stability, keeping in mind the objective of growth. It was created in 2016.
  • It was created to bring transparency and accountability in deciding monetary policy.
  • MPC determines the policy interest rate required to achieve the inflation target.
  • The committee comprises six members and Governor RBI acts as an ex-officio chairman. Three members are from RBI and three are selected by the government. The inflation target is to be set once every five years. It is set by the Government of India, in consultation with the Reserve Bank of India.
  • The current inflation target is pegged at 4% with -2/+2 tolerance till March 31, 2021.

7. What Caused the drop in Inflation?

  • Retail Inflation or price gains based on the Consumer Price Index, slowed to 6.77 % last month, from September's 7.41%, aided by an appreciable deceleration in food price inflation.
  • The year-on-year inflation based on the Consumer Food Price Index eased by almost 160 basis points in October, to 7.01%, from the preceding month's 8.60%, helped by a 'decline in prices of vegetables, fruits, pulses and oils, and fats', the Government said.
  • With the food and beverages sub-index representing almost 46% of the CPI's weight, the slowdown in food price gains understandably steered overall inflation lower even as price gains in three other essential categories, namely clothing, and footwear, housing, and health remained either little changed from September or quickened.
  • Inflation at the Wholesale Prices Level also continued to decelerate, with the headline reading easing into single digits for the first time in 19 months. A favorable base effect along with a distinct cooling in international prices of commodities including crude oil and steel amid gathering uncertainty in advanced economies was largely instrumental in tempering wholesale price gains.

8. Recent Measures by the Government

To soften the prices of edible oils and pulses, tariffs on imported items have been rationalized from time to time. The stock limits on edible oils are also maintained, to avoid hoarding.
The Government has taken trade-related measures on wheat and rice to keep domestic supplies steady and curb the rise in prices.
The impact of these measures is expected to be felt more significantly in the coming months.

For Prelims & Mains

 

For Prelims: Inflation, MPC, CPI, WPI, food Inflation, RBI, Headline inflation, Core inflation

For Mains: 
 1. Explain the concept of inflation and its impact on an economy. Discuss the various causes of inflation and the measures that can be taken to control it, with specific reference to India. (250 Words)
2. What are the challenges and opportunities associated with managing inflation in India? Evaluate the effectiveness of recent policy measures in addressing inflationary pressures and maintaining price stability. Suggest strategies for sustainable economic growth while managing inflation risks. (250 Words)
 
 
Previous Year Questions
 
1. Consider the following statements:  (UPSC 2021)
1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in the public interest.
3. The Governor of the RBI draws his natural power from the RBI Act.
Which of the above statements is/are correct? 
A. 1 and 2 only    B.  2 and 3 only     C. 1 and 3 only     D. 1, 2 and 3
 
 
2. Concerning the Indian economy, consider the following: (UPSC 2015)
  1. Bank rate
  2. Open Market Operations
  3. Public debt
  4. Public revenue

Which of the above is/are component(s) of Monetary Policy?

(a) 1 only   (b) 2, 3 and 4    (c) 1 and 2     (d) 1, 3 and 4

 

3. An increase in Bank Rate generally indicates: (UPSC 2013)

(a) Market rate of interest is likely to fall.
(b) Central bank is no longer making loans to commercial banks.
(c) Central bank is following an easy money policy.
(d) Central bank is following a tight money policy.
 

4. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? (UPSC 2017) 

1. It decides the RBI's benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.

Select the correct answer using the code given below:

A. 1 only      B.  1 and 2 only      C. 3 only      D. 2 and 3 only

 
5. Read the following passage and answer the question that follows. Your answers to these items should be based on the passage only.
Policymakers and media have placed the blame for skyrocketing food prices on a variety of factors, including high fuel prices, bad weather in key food producing countries, and the diversion of land to non-food production. Increased emphasis, however, has been placed on a surge in demand for food from the most populous emerging economics. It seems highly probable that mass consumption in these countries could be well poised to create a food crisis.
With reference to the above passage, the following assumptions have been made: (UPSC 2021)
1. Oil producing countries are one of the reasons for high food prices.
2. If there is a food crisis in the world in the near future, it will be in the emerging economies. Which of the above assumptions is/are valid?
A. 1 only        B. 2 only           C. Both 1 and 2         D.  Neither 1 nor 2
 
 
6. India has experienced persistent and high food inflation in the recent past. What could be the reasons? (UPSC 2011)
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30.
2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
3. The food supply chain has structural constraints.
Which of the statements given above are correct? 
A. 1 and 2 only          B. 2 and 3 only        C. 1 and 3 only          D. 1, 2 and 3
 
 
7. With reference to inflation in India, which of the following statements is correct? (UPSC 2015) 
A. Controlling the inflation in India is the responsibility of the Government of India only
B. The Reserve Bank of India has no role in controlling the inflation
C. Decreased money circulation helps in controlling the inflation
D. Increased money circulation helps in controlling the inflation
 
 
8. With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? (UPSC 2016)
1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017
2. The Agreement aims to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2°C or even 1.5°C above pre-industrial levels.
3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.
Select the correct answer using the code given below:
A. 1 and 3 only     B.  2 only        C. 2 and 3 only        D. 1, 2 and 3
 
Answers: 1-C, 2-C, 3-D, 4-A, 5-D, 6-B, 6-C, 7-B
 
 
Source: The Hindu
 
 

SOUTHWEST MONSOON

 
 
1. Context
The India Meteorological Department (IMD) announced on Tuesday that the southwest monsoon has advanced into some parts of the south Bay of Bengal, the south Andaman Sea, Nicobar Islands, and parts of the north Andaman Sea
 
2. What is the southwest monsoon?
 
  • The southwest monsoon is a seasonal weather pattern that brings significant rainfall to large parts of South Asia, particularly India, between June and September
  • The southwest monsoon typically begins in early June and lasts until late September. It starts with the arrival of the monsoon winds in the southern part of India, usually marked by the onset over the state of Kerala
  • The southwest monsoon brings about 70-90% of India’s annual rainfall. The distribution of rainfall varies, with some regions receiving heavy rains, while others may experience scanty showers.
  • The Western Ghats, the northeastern states, and the Himalayan foothills typically receive very heavy rainfall.
  • The monsoon is critical for the Kharif crop season in India, which includes crops like rice, maize, pulses, and cotton. Adequate and timely monsoon rains are essential for a good harvest
  • The monsoon starts retreating from northwestern India in early September and completely withdraws from the Indian subcontinent by mid-October. This phase is also known as the retreating or northeast monsoon

Mechanism:

  • High-Pressure Area: During the summer, intense heating of the landmass in the Indian subcontinent creates a low-pressure area over northern India and the Tibetan Plateau.
  • Low-Pressure Area: The Indian Ocean remains relatively cooler, creating a high-pressure area.
  • Wind Movement: Air moves from the high-pressure area over the ocean to the low-pressure area over the land, carrying moisture from the ocean and resulting in rainfall.
The monsoon trough is an elongated area of low pressure extending from the heat low over Pakistan and northwestern India to the Bay of Bengal. It influences the distribution and intensity of the monsoon rains.
 
3. What are easterly and westerly winds?
 
Easterly Winds
 
  • Easterly and westerly winds refer to the direction from which the winds originate
  • Easterly winds are winds that blow from the east towards the west
  • Easterly winds can affect weather patterns, including the development of tropical storms and cyclones. For instance, easterly waves in the tropics can lead to the formation of tropical cyclones in the Atlantic and Pacific Oceans

Characteristics:

  • Trade Winds: One of the most well-known examples of easterly winds are the trade winds. These winds blow from the east towards the west in the tropics, from the subtropical high-pressure areas toward the equatorial low-pressure areas.
  • Tropical Regions: In the tropical regions, particularly between 30 degrees north and south of the equator, easterly winds are prevalent. These are crucial for the weather patterns and climatic conditions in these regions.
  • Monsoon Winds: During certain seasons, such as the northeast monsoon in India, easterly winds play a significant role. These winds bring dry air from the land towards the ocean during the winter months.
Westerly Winds
 
  • Westerly winds are winds that blow from the west towards the east
  • Westerly winds play a significant role in the weather of temperate regions, influencing the climate and the movement of storm systems.
  • They are also responsible for carrying warm and moist air from the oceans inland, affecting precipitation patterns in coastal and inland regions.
  • The westerlies can affect transoceanic travel and weather prediction due to their influence on the movement of high and low-pressure systems

Characteristics:

  • Prevailing Westerlies: These winds are predominant in the mid-latitudes (between 30 and 60 degrees north and south of the equator). They blow from the subtropical high-pressure belts towards the poles.
  • Jet Streams: High-altitude westerly winds known as jet streams are important in influencing weather patterns and the movement of weather systems across the globe. They are fast flowing and occur in the upper levels of the atmosphere.
  • Polar Front: In the mid-latitudes, the westerlies interact with polar easterlies near the polar front, leading to the development of extratropical cyclones and storms
 
 
4.How does monsoon occur in India?

Monsoons in India occur due to seasonal changes in wind patterns and temperature differences between land and sea.

Here's a concise explanation of the process:

  • Differential heating: During summer, the Indian landmass heats up more quickly than the surrounding Indian Ocean.
  • Low pressure system: The heated land creates a low-pressure area over the Indian subcontinent.
  • Wind direction shift: This low pressure draws in moisture-laden winds from the cooler Indian Ocean towards the land.
  • Orographic lift: As these winds encounter geographical features like the Western Ghats or the Himalayas, they are forced to rise.
  • Condensation and precipitation: The rising air cools, causing water vapor to condense and form clouds, leading to heavy rainfall.
  • Duration: This pattern typically lasts from June to September, bringing the majority of India's annual rainfall.
 
5.What are the conditions that determine the onset of monsoon?
 
  • The primary driver is the temperature difference between the land and the surrounding sea. During summer, the land heats up faster than the ocean, creating a low-pressure area over the land and a high-pressure area over the ocean. This pressure difference leads to the movement of moist air from the ocean to the land
  • Warm sea surface temperatures are crucial as they increase the evaporation rate, contributing to the formation of moist air masses that drive the monsoon rains.
  • The monsoon winds, which are part of the larger atmospheric circulation, shift according to the seasonal temperature differences. The southwest monsoon, for instance, is driven by the southwest winds that carry moisture from the Indian Ocean to the Indian subcontinent.
  • The geographical features, such as mountain ranges, play a significant role. For example, the Western Ghats in India force moist air to rise, cool, and condense, leading to heavy rainfall on the windward side
  • The movement and strength of the high-pressure systems over the oceans and low-pressure systems over the land influence the intensity and timing of the monsoon.
  • Phenomena such as El Niño and La Niña can affect the strength and timing of the monsoon. For example, El Niño can lead to weaker monsoons due to altered wind patterns and sea surface temperatures
6.What is the impact of La-Nina and El Nino on monsoon?
 
La Niña and El Niño, both phases of the El Niño-Southern Oscillation (ENSO) phenomenon, have significant impacts on the monsoon patterns around the world.
 
Here’s how each affects the monsoon:
El Niño
  • El Niño is generally associated with a weaker Indian monsoon. The warming of the central and eastern Pacific Ocean during El Niño tends to disrupt the normal atmospheric circulation patterns, leading to reduced rainfall over the Indian subcontinent.
  • The onset of the monsoon can be delayed, and the overall intensity of the rainfall during the monsoon season might be lower than usual
  •  El Niño often brings drier conditions to Southeast Asia and northern Australia, leading to droughts and reduced rainfall
  • Eastern and southern Africa may experience drier conditions as well
La Niña
  • La Niña, characterized by cooler-than-average sea surface temperatures in the central and eastern Pacific Ocean, is typically associated with a stronger Indian monsoon. It often leads to increased rainfall over the Indian subcontinent
  • The enhanced monsoon can lead to heavier rains and potentially more frequent and intense flooding
  • La Niña tends to bring wetter conditions to Southeast Asia and northern Australia, potentially causing heavy rains and flooding
  • La Niña can lead to wetter conditions in parts of northern South America
 
7.Way Forward
 
The intermittent development of a wind shear zone — where winds move with different velocities and directions — along latitudes 20 ° N between central and peninsular India
 
 
 
For Prelims: Indian and World Geography
For Mains: GS-I, GS-III: Important Geophysical phenomena and environment
 
 
Previous Year Questions
 
1.Consider the following statements: (UPSC CSE 2012)
 
1. The duration of the monsoon decreases from southern India to northern India.
2. The amount of annual rainfall in the northern plains of India decreases from east to west.
 
Which of the statements given above is/are correct?
A. 1 Only
B. 2 Only
C. Both 1 and 2
D. Neither 1 nor
Answer (C)
  • The duration of the monsoon indeed decreases from southern India to northern India. The southern part of India experiences the monsoon earlier and for a longer duration compared to the northern part.
  • The amount of annual rainfall in the northern plains of India decreases from east to west. The eastern part of the northern plains receives more rainfall compared to the western part, largely due to the influence of the Bay of Bengal branch of the Southwest Monsoon.
 
 
Source: The Hindu
 
 

WORLD TRADE ORGANISATION (WTO)

 

1. Context

At a time when India and the U.S. are in talks over a trade deal, fresh tensions have emerged as India has notified the World Trade Organization (WTO) of its proposal to impose tariffs on $7.6 billion worth of imports from the U.S. in retaliation for that country raising its import duties on steel and aluminium to 25%

2. What is WTO?

  • The World Trade Organization is the only international organization that deals with the rules of trade between countries.
  • The WTO officially commenced in 1995 under the Marrakesh Agreement signed by 124 nations, replacing the General Agreement on Tariffs and Trade (GATT).
  • Currently, it has 164 members and 23 observer governments (like Iran, Iraq, Bhutan, Libya, etc).
  • According to its rules, all decisions are taken through consensus and any member can exercise a veto.
  • It aims to promote free trade, which is done through trade agreements that are discussed and signed by the member states.
  • The WTO also provides a forum for countries to negotiate trade rules and settle economic disputes between them. 

3. What is WTO's Ministerial Conference?

  • The Ministerial Conference is the WTO’s top decision-making body and usually meets every two years.
  • All members of the WTO are involved in the Ministerial Conference and they can take decisions on all matters covered under any multilateral trade agreements.
  • The WTO’s 12th Ministerial Conference was held in Geneva from 12-17 June.
  • It was supposed to end on 15 June, but with intensifying negotiations, the conference was extended by two days. 

4. Key takeaways from the meeting

4.1 Curtailing harmful fishing subsidies

  • The WTO passed a multilateral agreement that would curb ‘harmful’ subsidies on illegal, unreported, and unregulated fishing for the next four years, to better protect global fish stocks.
  • Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
  • The current agreement, which establishes new trading rules, is the second multilateral agreement in WTO history. 
  • India and other developing countries were able to win some concessions in this agreement.

4.2 Global food security

  • Members agreed to a binding decision to exempt food purchased by the UN's World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
  • In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group's members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
  • However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
  • India's key demand to allow it to export food from its public stockholdings to other countries will reportedly be discussed in the next Ministerial Conference in 2023.

4.3 E-Commerce transactions

  • Members agreed to continue the long-standing moratorium on customs duties on e-commerce transmissions.
  • It will be continued until the subsequent Ministerial Conference or until March 31, 2024, depending on whichever comes first.

4.4 Covid-19 vaccine production

  • WTO members agreed to temporarily waive intellectual property patents on Covid19 vaccines without the consent of the patent holder for 5 years so that they can more easily manufacture them domestically.
  • The current agreement is a watered-down version of the original proposal made by India and South Africa in 2020.
  • They had wanted broader intellectual property waivers on vaccines, treatments, and tests.
  • Rich pharmaceutical companies had strongly opposed this, arguing that IPs do not restrict access to Covid vaccines and that the removal of patent protections gives researchers that quickly produced life-saving vaccines, a negative message. 
  • The waiver agreed upon by the WTO was criticized by advocacy groups for being narrow in scope, as it did not cover all medical tools like diagnostics and treatments.

5. Significance of the Recent Agreements

  • The fisheries agreement is of immense significance as it is the first time that members agreed with environmental sustainability at its heart.
  • It will also help in the protection of the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries. It is only the second multilateral agreement on global trade rules struck in its 27-year history.
  • Second, the exemption of WFP's food from tariffs is vital for promoting global food security, especially in light of the global food shortages and rising prices caused by the war between Ukraine and Russia.
  • Third, the temporary waiver will contribute to ongoing efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off.

6. Issues surrounding WTO

6.1 The burden for Poor countries

  • The WTO rules include many Non-trade subjects as well. The subjects like environment, labor standards, fossil fuel subsidies, plastic pollution, and transparency in government procurement have been brought into the fold of the WTO.
  • This is expected to raise costs for the poor and developing countries and impact the competitiveness of their goods.
  • For instance, a poor country exporting cotton shirts must first meet high environmental standards at home. This will only raise costs and cut exports from poor countries.

6.2 Trade wars

  • The US administration imposed steep tariffs in January 2018 on China alleging IP violations.
  • In December 2019 the US also blocked the appointment of new nominees to WTO’s appellate body. This has paralyzed the WTO as a judge and enforcer of global trade rules.

6.3 Lack of consensus

  • The developed nations’ game plan is to put the old obligations on the back burner and push the WTO to form rules on new areas like e-commerce.
  • It is an area where the US firms have a clear edge.
  • Most WTO member countries want them to first deliver on the agreed issues like reduction in agriculture subsidies.
 
For Prelims: General Agreement on Tariffs and Trade (GATT), Marrakesh Agreement, World Trade Organisation (WTO), 12th Ministerial Conference of WTO, and UN's World Food Programme (WFP).
For Mains: 1. What have been the recent issue related to dispute settlement at WTO? Have the policies at WTO worked against the interest of emerging economies like India?(250 Words)
 

Previous year Questions

1. In the context of which of the following do you sometimes find the terms 'amber box, blue box, and green box' in the news? (UPSC 2016)
A. WTO affairs
B. SAARC affairs
C. UNFCCC affairs
D. India-EU negotiations on FTA
Answer: A
 
2. In the context of the affairs which of the following is the phrase "Special Safeguard Mechanisms" mentioned in the news frequently? (UPSC 2010)
A. United Nations Environment Program
B. World Trade Organization Agreement
C. ASEAN-India Free Trade
D. G-20 Summits
Answer: B
 
3. Consider the following statements: (UPSC 2017)
1. India has ratified the Trade Facilitation Agreement (TFA) of the WTO.
2. TFA is a part of WTO's Bali Ministerial Package of 2013.
3. TFA came into force in January 2016
Which of the statements given above is/are correct?
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3
Answer: A
 
Source: The Indian Express
 
 

MOST FAVOURED NATION (MFN)

 
 
1. Context
 
 Global pharma companies could ramp up pressure on India to raise the prices of drugs in India and other developing markets, as US President Donald Trump’s new executive order is set to force companies to align US drug costs with cheapest ones abroad
 
2. What is Most favoured nation (MFN)?
 
  • The term "Most Favoured Nation" (MFN) refers to a principle in international trade where a country agrees to treat another country equally in terms of trade advantages. It might sound like one country is being given special treatment, but in reality, MFN status means non-discriminatory treatment — that is, the receiving country gets the same favorable terms as any other nation.
  • Here’s how it works in practice: Imagine Country A has trade agreements with several countries. If Country A gives one of those countries a lower tariff rate or special access to its markets, it must extend the same benefit to all other countries it has granted MFN status to. This ensures that trade policies are fair and uniform, preventing countries from playing favorites.
  • The MFN principle is a cornerstone of the World Trade Organization (WTO). All members of the WTO are automatically granted MFN status by one another, unless an exception applies (such as a free trade agreement or customs union, which are allowed under WTO rules).
  • So in essence, Most Favoured Nation doesn’t mean the "most preferred" in a literal sense. Rather, it guarantees that the country will not be treated less favorably than any other country — it’s about ensuring equality in trade relationships
 
3.What is the status of India’s generic drug industry?
 
 
  • India’s generic pharmaceutical sector plays a crucial role in supplying affordable medicines, not just domestically but also to countries like the United States and the United Kingdom.
  • However, this industry has often been at odds with major pharmaceutical companies in developed nations. These firms contend that India’s relatively lenient intellectual property regulations put them at a disadvantage.
  • This tension escalated when the U.S. placed India on its “Priority Watch List” for intellectual property concerns—an action that significantly impacts drug production—and was further reflected in an executive order signed by then-President Trump.
  • Ajay Srivastava, head of the Global Trade and Research Initiative (GTRI), remarked that Trump’s policy on Most Favoured Nation (MFN) pricing should serve as a warning. As Western markets enforce stricter price controls, pharmaceutical companies may intensify their push to raise prices in countries like India to compensate.
  • Although India’s pharmaceutical regulations adhere to the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the country has consistently pushed back against adopting additional protections, known as “TRIPS-plus” measures.
  • These are often introduced through Free Trade Agreements (FTAs) by developed countries and include provisions like data exclusivity, automatic extensions of patent terms, stronger patent linkage mechanisms, more expansive patent eligibility, and the controversial practice of evergreening
 
4.What is the Priority Watch List watch list?
 
  • The Priority Watch List is part of the Special 301 Report, an annual review conducted by the United States Trade Representative (USTR). This report identifies countries that the U.S. believes do not provide adequate protection and enforcement of intellectual property rights (IPR), such as patents, copyrights, and trademarks.
  • Countries placed on the Priority Watch List are considered to have serious IPR concerns that significantly affect U.S. companies or industries. While being on the list doesn’t automatically lead to penalties or sanctions, it signals strong disapproval from the U.S. and may lead to increased diplomatic pressure or trade negotiations aimed at reforming the country’s IP laws or enforcement practices.
  • For example, a country like India has often been placed on this list because, from the U.S. perspective, its patent laws (especially in the pharmaceutical sector) are seen as too flexible or not fully aligned with U.S. standards.
  • This includes issues like allowing generic versions of drugs to enter the market more easily, or resisting stricter IP protections such as data exclusivity and patent term extensions.
  • In short, the Priority Watch List acts as a diplomatic tool that the U.S. uses to push countries toward adopting stronger IP protections that align more closely with American commercial interests
 
 
5. Double Taxation Avoidance Agreement (DTAA)
 
 

The Double Taxation Avoidance Agreement (DTAA) is a treaty between two or more countries that aims to prevent individuals and businesses from being taxed twice on the same income.

Here’s how it works in a simplified, explanatory way:

When a person or a company earns income in one country (say, Country A) but is a resident of another country (Country B), both countries may claim the right to tax that income. This can lead to double taxation, which is unfair and discourages cross-border trade and investment.

To solve this issue, countries sign a DTAA. This agreement outlines which country gets to tax what type of income, such as salaries, business profits, dividends, interest, royalties, or capital gains. The goal is to make sure the same income is not taxed twice or, if it is, that a credit or exemption is given to offset the burden.

There are two main ways DTAAs avoid double taxation:

  1. Exemption method – One country agrees to not tax the income at all if it’s already taxed in the other.

  2. Credit method – The country of residence taxes the income, but gives a credit for the tax already paid in the source country.

For example, if an Indian resident earns income in the United States, and both countries have a DTAA in place, that income won’t be taxed twice. Either India will exempt the income or allow the individual to deduct the tax already paid in the U.S. from their Indian tax liability.

Apart from avoiding double taxation, DTAAs also aim to:

  • Prevent tax evasion and promote transparency.

  • Encourage foreign investment by creating a more predictable and fair tax environment.

  • Clearly define tax residency, which is especially useful for people or businesses with cross-border activities

 
6. Way Forward
 
International trade experts said Trump’s executive order may offer immediate relief to American patients, but it is likely to trigger a global price recalibration—with pharmaceutical giants intensifying pressure on lower-cost markets like India to raise their prices as the low cost markets would determine prices in the lucrative US market
 
 
For Prelims: Current events of national and international Significance.
 
For Mains:General Studies II: Effect of policies and politics of developed and developing countries on India’s interests
 
Previous Year Questions
 
1.Which of the following are the reasons for the occurrence of multi-drug resistance in microbial pathogens in India? (2019)
1. Genetic predisposition of some people
2. Taking incorrect doses of antibiotics to cure diseases
3. Using antibiotics in livestock farming
4. Multiple chronic diseases in some people
Select the correct answer using the code given below.
(a) 1 and 2
(b) 2 and 3 only
(c) 1, 3 and 4
(d) 2, 3 and 4
 
Answer (b)
 

Multi-drug resistance in microbial pathogens arises when microorganisms such as bacteria, viruses, fungi, and parasites evolve to resist the effects of medications that were once effective against them. In India, several human practices contribute significantly to this issue.

Let’s evaluate the options:

  1. Genetic predisposition of some people – ❌ Not a cause of microbial drug resistance. While genetics may affect how individuals respond to medications, resistance is about how microbes evolve, not human genetics.

  2. Taking incorrect doses of antibiotics to cure diseases – ✅ This is a well-established cause. Underdosing or not completing a full course of antibiotics allows some bacteria to survive and develop resistance.

  3. Using antibiotics in livestock farming – ✅ The widespread and often unregulated use of antibiotics in animals can lead to the development of resistant bacteria, which can spread to humans through food, water, and the environment.

  4. Multiple chronic diseases in some people – ❌ Having multiple diseases may increase antibiotic use, but it is not a direct cause of microbial resistance.
Source: Indianexpress
 
 

BRAHMOS MISSILE

 
 
1. Context
 
Since it was first tested successfully on June 12, 2001, the BrahMos supersonic cruise missile was likely used for the first time in a combat situation during Operation Sindoor
 
2. What are the BrahMos Missile?
 
  • The BrahMos missile is a supersonic cruise missile jointly developed by India's Defence Research and Development Organisation (DRDO) and Russia's NPO Mashinostroyeniya. Its name is a portmanteau of the Brahmaputra and Moskva rivers.
  • BrahMos is known for its speed and versatility. It is the fastest cruise missile in the world, capable of reaching speeds of up to Mach 3 (three times the speed of sound). This makes it extremely difficult for enemy defenses to intercept.
  • The missile has both land-attack and anti-ship capabilities, meaning it can target both land-based targets and naval vessels. Its precision and range make it a potent weapon for both offensive and defensive purposes. It's deployed across various platforms including land, sea, and air.
  • The BrahMos missile has become a significant asset in the Indian military's arsenal, providing a formidable deterrent and offensive capability. It's continuously being upgraded to enhance its capabilities and adapt it to different platforms and operational requirements

3. Evolution of Brahmos

  • During the early 1980s, Dr. A P J Abdul Kalam spearheaded the Integrated Guided Missile Development Programme, initiating the creation of various indigenous missiles such as Prithvi, Agni, Trishul, Akash, and Nag, each with diverse capabilities and operational ranges.
  • In the early 1990s, India's strategic leadership recognized the necessity for cruise missiles—guided projectiles maintaining nearly constant speeds throughout their trajectories—to deliver sizable warheads with pinpoint accuracy over extensive distances.
  • This requirement emerged prominently following the deployment of cruise missiles during the 1991 Gulf War.
  • In 1998, an Inter-Governmental Agreement was formalized in Moscow between Dr. Kalam, then heading the DRDO, and N V Mikhailov, Russia's Deputy Defence Minister at the time.
  • This agreement laid the foundation for BrahMos Aerospace, a collaborative venture between DRDO and the Russian space company NPO Mashinostroyenia (NPOM), with the Indian side holding 50.5% ownership and the Russians 49.5%. The venture derived its name from two rivers—Brahmaputra in India and Moskva in Russia.
  • Subsequently, in 1999, the development of missiles commenced within the laboratories of DRDO and NPOM after BrahMos Aerospace secured funding from both governments. The first successful test launch occurred in 2001 from a specifically engineered land-based launcher

4.Significance of Brahmos

 

  • The BrahMos missile is equipped with a solid propellant booster engine, comprising two stages. Initially, the first stage accelerates the missile to supersonic speeds, after which it detaches. Subsequently, the liquid ramjet, constituting the second stage, propels the missile to nearly three times the speed of sound during its cruise phase.
  • Notably, the missile exhibits a minimal radar signature, enhancing its stealth capabilities, and can follow various trajectories.
  • As a "fire and forget" weapon, it can maintain a cruising altitude of 15 km and descend to as low as 10 meters to effectively strike its target.
  • Classified as "standoff range weapons," cruise missiles like BrahMos are launched from a distance substantial enough to evade defensive countermeasures, a feature common among the arsenals of major militaries worldwide.
  • Compared to subsonic cruise missiles, BrahMos boasts three times the speed, 2.5 times the flight range, and extended operational capabilities. With export versions available, BrahMos serves as a crucial asset in defense diplomacy initiatives.
  • In 2022, an air-launched variant of BrahMos underwent testing from a frontline SU-30MKI aircraft, while an advanced sea-to-sea variant was also tested from the INS Visakhapatnam during the same year.
  • However, BrahMos was embroiled in controversy in 2022 when Pakistan alleged that an unarmed Indian missile had inadvertently landed within its territory on March 9, 2022. The Ministry of Defence attributed the incident to a technical malfunction resulting in accidental firing.
  • Though the government initiated a high-level inquiry, the specific missile involved was not officially disclosed. Nonetheless, experts inferred from its trajectory that it bore the hallmarks of BrahMos

5. Types of  BrahMos

  • The BrahMos missile system is strategically deployed across various fronts, encompassing land-based formations along border regions, BrahMos-equipped Sukhoi-30 aircraft stationed in both the Northern and Southern theaters, and ships and submarines fitted with BrahMos capabilities in naval operations. This integrated setup constitutes a formidable triad, adept at addressing evolving demands in multidimensional warfare scenarios.
  • To adapt to dynamic warfare requirements, ongoing efforts are focused on upgrading the BrahMos system, with emphasis on enhancing range, maneuverability, and accuracy.
  • Current development initiatives include testing versions with extended ranges of up to 350 km, surpassing the original's 290 km limit. Furthermore, plans are underway for versions with even greater ranges, potentially reaching up to 800 km, and featuring hypersonic speeds. Concurrently, endeavors are directed towards reducing the size and radar signature of existing iterations while augmenting their overall capabilities.
  • Across all three branches of the Armed Forces, BrahMos variants are subject to regular testing, including those presently in development.
  • Land-Based: The land-based BrahMos setup comprises mobile autonomous launchers, typically housing four to six launchers, each armed with three missiles capable of near-simultaneous firing.
  • These batteries are strategically deployed along India's land borders in various theaters. Upgraded versions of the land attack variant, capable of cruising at 2.8 Mach, boast precision striking capabilities with ranges of up to 400 km.
  • Advanced iterations with enhanced range and speeds of up to 5 Mach are reportedly in the developmental pipeline. Notably, the ground systems of BrahMos are lauded for their streamlined design and minimal componentry.
  • Ship-Based: Since 2005, the Navy has been inducting BrahMos missiles on its frontline warships, enhancing their ability to engage sea-based targets beyond the radar horizon. The naval variant has demonstrated efficacy in both sea-to-sea and sea-to-land engagements.
  • These missiles can be deployed individually or in salvos of up to eight, with staggered firing intervals. This capability enables them to effectively target groups of frigates equipped with modern missile defense systems.
  • Air-Launched: The successful flight testing of BrahMos from a Sukhoi-30MKI against a sea-based target in the Bay of Bengal on November 22, 2017, marked a significant milestone. Subsequent tests have validated its effectiveness.
  • The BrahMos-equipped Sukhoi-30 aircraft, boasting a range of 1,500 km without mid-air refueling, serve as a pivotal strategic deterrent along both land borders and the strategically vital Indian Ocean Region. The Indian Air Force is actively integrating BrahMos with 40 Sukhoi-30 fighter jets across various airbases.
  • Submarine-Launched: This variant can be launched from depths of approximately 50 meters below the water surface. The missile, stored in a canister, is vertically launched from the pressure hull of the submarine, employing distinct configurations for underwater and surface flights. Successful testing of this version was first conducted in March 2013 from a submerged platform off the coast of Visakhapatnam

6. Brahmos Missile Series

 

The BrahMos missile series is a family of supersonic cruise missiles developed jointly by India and Russia. Named after the Brahmaputra River in India and the Moskva River in Russia, the BrahMos series is renowned for its speed, precision, and versatility.

Here are some key variants within the BrahMos missile series:

  • BrahMos Block-I: The initial variant of the BrahMos missile, featuring a range of approximately 290 km. It is capable of striking both land-based and naval targets with high accuracy.

  • BrahMos Block-II: An upgraded version with enhanced capabilities, including improved range and accuracy. It incorporates advanced technologies to further enhance its effectiveness in various operational scenarios.

  • BrahMos Block-III: This variant features additional upgrades aimed at improving its range, maneuverability, and stealth capabilities. It is designed to overcome evolving threats and maintain its position as a potent deterrent.

  • BrahMos-A: The air-launched variant of the BrahMos missile, integrated onto Sukhoi Su-30MKI fighter aircraft of the Indian Air Force. It significantly extends the reach of the missile, allowing for precision strikes against ground and naval targets.

  • BrahMos-N: The naval variant of the BrahMos missile, deployed on Indian Navy warships. It provides a formidable anti-ship and land-attack capability, enhancing the offensive capabilities of naval fleets.

  • BrahMos-ER: The extended-range variant of the BrahMos missile, currently under development, aimed at achieving ranges beyond the existing capabilities. It will further enhance the strategic reach of the BrahMos series, allowing for precision strikes at longer distances.

  • BrahMos-NG: A next-generation variant of the BrahMos missile, featuring reduced size and weight while maintaining high performance. It is designed for compatibility with a wider range of platforms, including aircraft, submarines, and surface vessels

7.Way Forward
 
BrahMos missile series represents a significant technological achievement in the field of missile development, providing India with a potent and versatile deterrent against various threats. Its continuous evolution and upgrades ensure that it remains at the forefront of modern warfare capabilities
 

 

 

Previous Year Questions

1.Consider the following statements: (UPSC CSE Prelims 2023)

  1. Ballistic missiles are jet-propelled at subsonic speeds throughout their flights, while cruise missiles are rocket-powered only in the initial phase of flight.
  2. Agni-V is a medium-range supersonic cruise missile, while BrahMos is a solid-fuelled intercontinental ballistic missile.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

Answer: (d)
Source: Indianexpress
 
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