Mains Exhaustive

India-Japan Ties: Old partners, New priorities 

Context: Recently, the Prime Minister of India visited Japan for the 15th India-Japan Annual Summit. The visit is expected to further consolidate the Special Strategic and Global Partnership between the two nations.

Relevance of the Topic: Mains: India-Japan bilateral relations. 

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Key Highlights of India PM’s Visit to Japan

India and Japan inked 21 pacts during the recent visit. The key agreements, MOUs and announcements include:

  • India-Japan joint vision for the next decade: The roadmap covers vital areas such as economic growth, security, technology, innovation, health, sustainability, mobility and people-to-people exchanges.
  • Revision of the 2008 Joint Declaration on Security Cooperation. 
  • Bilateral energy partnership on clean Hydrogen and Ammonia.
  • Memorandum of cooperation on joint crediting mechanism.
  • Private investment target of ¥10 trillion (about $68 billion) in India over the next decade. 
  • Economic Security Initiative launched to promote supply chain resilience in strategic sectors.
  • MoU on India-Japan digital partnership 2.0 
  • Launch of the India - Japan AI Initiative to strengthen collaboration on large language models, data centres, and AI governance.
  • Launch of the Next Generation Mobility Partnership
  • Launch of the India - Japan Small and Medium Enterprises Forum
  • Launch of the Sustainable Fuel Initiative
  • Implementing arrangement between the Indian Space Research Organisation (ISRO) and Japan aerospace exploration agency (JAXA) concerning joint lunar polar exploration mission. 
  • Transfer of Japan's next-generation E10 series Shinkansen technology for the Mumbai-Ahmedabad bullet train project.
  • Japan Human Resource Exchange: an action plan to promote two-way exchange of 5 lakh people between India and Japan, particularly 50,000 skilled and semi-skilled personnel from India to Japan in the next five years.

Overview of India-Japan Bilateral Relationship: 

India and Japan are two of Asia’s leading democracies and among the world’s top five economies. The partnership is rooted in civilisational ties reinforced by convergence in their regional and global outlooks. The countries share values, trust, and strategic outlook.

Strategic Partnership:

  • India-Japan bilateral relations were elevated to Global Partnership in 2000, Strategic and Global Partnership in 2006, and Special Strategic and Global Partnership in 2014.
  • India’s Act East Policy and Indo-Pacific Oceans Initiative (IPOI) align closely with Japan’s Free and Open Indo-Pacific (FOIP) policy. 

Multilateral and Regional Cooperation: 

  • Cooperation between the countries extends to plurilateral platforms such as the:
    • Quad (India and Japan coordinate closely with the US and Australia to ensure a free, open, and inclusive Indo-Pacific) 
    • International Solar Alliance (ISA)
    • Coalition for Disaster Resilient Infrastructure (CDRI)
    • Supply Chain Resilience Initiative (India and Japan are looking to diversify and secure supply chains through the SCRI which also involves Australia).
  • Japan leads the Indo-Pacific Oceans Initiative (IPOI’s) connectivity pillar.

Trade Ties: 

  • Bilateral trade reached $22.8 billion in FY 2024. 
  • Imports from Japan continue to outweigh exports.
    • India’s main exports: chemicals, vehicles, aluminium, and seafood 
    • India’s major imports: machinery, steel, copper, and reactors.

Investment: 

  • Japan is India’s fifth-largest source of FDI with $43.2 billion cumulative investment up to December 2024. Annual inflows have been strong: $3.1 billion in FY 2024.
  • Around 1,400 Japanese companies with nearly 5,000 establishments operate in India; more than 100 Indian companies are present in Japan.

Emerging Focus Areas: 

  • Digital cooperation (involving AI, semiconductors, startups), clean energy, supply chain resilience, industrial competitiveness, public infrastructure and skill development.
  • Economic security initiative focuses on semiconductors, critical minerals, AI, telecommunications and clean energy. 

Infrastructure Cooperation: 

  • Japan has been India’s largest Overseas Development Assistance (ODA) donor since 1958, supporting critical infrastructure and human development projects. ODA disbursement stood at about JPY 580 billion ($4.5 billion) in FY 2024.
  • The flagship Mumbai-Ahmedabad High Speed Rail is the flagship project symbolising advanced technology transfer and skill development. The latest tranche of JPY 300 billion ($2.2 billion) was signed in 2023.
  • Japan is transferring its next-generation E10 series Shinkansen technology for the Mumbai-Ahmedabad bullet train project.

Defence and Security: 

  • Key agreements on defence and security include the Joint Declaration on Security Cooperation (2008), Defence Cooperation and Exchanges MoU (2014), Information Protection Agreement (2015), Reciprocal Provision of Supplies and Services Agreement (2020), and co-development of the UNICORN naval mast (2024).

Military Exercises: 

  • Malabar (with the US and Australia), Milan (multilateral naval), JIMEX (bilateral maritime), Dharma Guardian (Army), and Coast Guard cooperation are held regularly.
  • Dialogue Mechanisms: Defence Ministers’ meetings, Chiefs’ visits, and Joint Service Staff Talks (2024) have consolidated trust.

People-to-People, Culture and Education: 

  • Tourism: 2023-24 was celebrated as the Year of Tourism Exchange with the theme “Connecting Himalayas with Mount Fuji”.
  • Education: There are more than 665 academic partnerships between Indian and Japanese universities. Platforms like Edu-Connect and Universities Forum promote exchanges. The Skill Connect platform launched in 2023 links Indian talent with Japanese employers.
  • Diaspora: About 54,000 Indians live in Japan, mainly IT professionals and engineers.

The visit consolidates India-Japan relations making Japan India’s most consistent partner in Asia. 

Govt Push for E-Commerce Exports amid US Tariff Hit

Context: The Ministry of Commerce and Industry has initiated consultations with industry stakeholders (Amazon, Flipkart, MSMEs, retailers) to explore ways of boosting e-commerce exports, especially under the E-Commerce Export Hubs (ECEHs) model announced in the Union Budget.

Relevance of the topic:

Prelims: State of E-Commerce in India.

Mains: E-commerce in India- state, potential, issues, government policies.

In the backdrop of the US imposing 50% tariffs on Indian products, the Indian government is pushing to strengthen e-commerce exports as an alternative route to sustain export growth. A major debate has emerged on whether FDI should be permitted in the inventory-based model of e-commerce, which MSMEs support but retailers oppose.

What is E-Commerce?

  • E-Commerce (Electronic Commerce) refers to the buying and selling of goods and services using digital platforms and electronic networks, particularly the internet.
  • It enables Business-to-Business (B2B), Business-to-Consumer (B2C), and even Consumer-to-Consumer (C2C) transactions across domestic and international markets.

Models of E-Commerce in India:

  • Marketplace Model: 
    • E-commerce companies act as facilitators between buyers and sellers.
    • 100% FDI is permitted under the automatic route in this model.
    • Example: Amazon, Flipkart (platforms connecting sellers to buyers).
  • Inventory-Based Model:
    • E-commerce entities own inventory of goods and sell directly to consumers.
    • FDI is not permitted in this model.
    • Example: Reliance Digital’s online stores.

Current State of E-Commerce in India: 

  • India’s e-commerce industry is dominated by MSMEs and small businesses exporting goods valued between $25 and $1,000.
  • Popular export products: handicrafts, art, books, ready-made garments, gems and jewellery.
  • India’s total e-commerce exports currently stand at only $5 billion, which is far below China’s $300 billion.
  • According to GTRI (Global Trade Research Initiative), India’s e-commerce exports have the potential to reach $350 billion by 2030.

Challenges in India’s E-Commerce Exports: 

  • Policy and Regulation: Current rules are a patchwork framed for regular B2B exporters, creating a high compliance burden on small firms. No separate e-commerce export policy exists yet.
  • FDI Restrictions: FDI permitted only in the marketplace model, not in the inventory model → limits global competitiveness.
  • Logistics and Infrastructure: Poor logistics integration, high shipping costs, and lack of streamlined customs processes hamper efficiency. India's logistics costs remain high: 10-12% of GDP as compared to 8-10 % global benchmark.
  • MSME Burden: Small exporters face difficulties in customs clearance, returns, and international payments.
  • Global Competition: India’s e-commerce exports, at just $5 billion, lag far behind global leaders such as China ($300 billion) and rapidly growing players like Vietnam and South Korea.

Government’s Current Push

  • E-Commerce Export Hubs (ECEHs) announced in the Union Budget to promote small exporters.

E-Commerce Export Hubs (ECEHs): 

  • E-Commerce Export Hubs (ECEHs) initiative aims to establish dedicated zones for facilitating cross-border e-commerce exports from India.
  • These hubs are designed to support SMEs, Artisans, and small businesses by mitigating the cost and time associated with logistics, regulations, and returns processing. 
  • Each ECEH will offer integrated services at a single location including customs clearance, quality certification, packaging, off-port warehousing, and support for re-imports of returns or rejected goods. 
  • ECEHs are envisioned as part of a broader push under the Foreign Trade Policy (FTP) 2023 which includes digital trade facilitation, outreach (like Niryat Bandhu scheme), and infrastructure like Dak Ghar Niryat Kendras (DNKs), and improved courier export limits. 
  • Economic Survey further underscores that ECEHs will connect MSMEs, Artisans, and One District One Product (ODOP) initiatives with global markets, thus enhancing logistics efficiency and economic inclusion in Tier 2 and Tier 3 cities.
  • DPIIT has begun consultations with stakeholders to explore reforms.
    • MSMEs are advocating for allowing FDI in inventory-led models to ease compliance and boost competitiveness.
    • Retailers, however, oppose inventory-based FDI, fearing it could hurt small traders and lead to monopolisation by global giants.

Way Forward

  • Dedicated E-Commerce Export Policy: Frame a unified policy addressing customs, returns, payments, and compliance burdens specific to digital trade.
  • FDI and Regulatory Reforms: Revisit FDI norms in the inventory-led model with safeguards for MSMEs and small retailers.
  • Integrated Logistics Infrastructure: Operationalise E-Commerce Export Hubs (ECEHs) with end-to-end facilities for warehousing, packaging, and streamlined customs clearance.
  • Digital Empowerment of MSMEs: Provide targeted skilling, digital onboarding, branding, and fintech solutions to integrate small exporters into global e-marketplaces.
  • Global Trade Engagement: Leverage FTAs and WTO negotiations to secure favourable digital trade rules and expand market access.

The GTRI estimate of $350 billion e-commerce exports by 2030 highlights the immense untapped potential of India’s digital trade. Achieving this target will require a dedicated e-commerce export policy, supportive FDI frameworks, robust logistics infrastructure, and effective integration of MSMEs into global value chains.

US’s Tariffs: Nature, Impacts, and Lessons for India

Context: The US has imposed 50% tariffs on most US imports from India with effect from August 27, 2025. 

Relevance of the Topic: Prelims: Concept of Tariff, WTO, MFN Principle, India-US Trade. Mains: US’s Tariffs - nature, impact, and lesson for India.

What is Tariff?

  • A tariff is a tax or duty imposed on imported or exported goods by a government.
  • It is one of the oldest instruments of trade policy used to regulate cross-border trade.
  • Objectives:
    • To protect domestic industries from foreign competition
    • To raise government revenue
    • To be used as a tool of foreign policy or retaliation. 

Under the WTO framework, members commit to tariff ceilings and must follow the Most Favoured Nation (MFN) principle, applying equal tariffs to all members except under FTAs or customs unions.

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Nature of US Tariffs on India: 

  • The US has imposed two layers of tariffs on Indian products: 
    • a reciprocal tariff of 25% (effective August 7, 2025)
    • secondary tariff of 25% (effective August 27, 2025).
  • The tariffs apply to a broad range of Indian exports, sparing only a few critical sectors such as pharmaceuticals, semiconductors, mobile phones, lumber, and certain chemicals.
  • The tariffs have been imposed unilaterally by the US without negotiation or consultation, making them a violation of WTO commitments.
  • The tariffs directly breach the Most Favoured Nation (MFN) principle, since India is being treated less favourably compared to other WTO members such as the EU and China, which are not subjected to similar duties.
  • The tariffs violate binding tariff commitments under WTO schedules, where the US had agreed to maintain duties below certain ceilings for all members.
  • The tariffs are discriminatory in nature, the US has not imposed any tariff on the EU and China, the two largest buyers of energy from Russia. 

The tariffs demonstrate the weaponisation of trade policy, where tariffs are being used to pursue geopolitical objectives such as pressuring countries on Russian oil purchases. 

The paralysis of the WTO’s Appellate Body since 2019 has been exposed further, as countries like India have no effective mechanism to challenge such unilateral actions.

India’s Concessions to the US: 

  • India reduced tariffs on bourbon whiskey, high-end motorcycles, and electric vehicles.
  • India withdrew the equalisation levy on offshore entities, a long-standing US objection.
  • India offered zero or near-zero tariffs on most industrial products and some agricultural products.
  • India expressed willingness to increase energy imports from the US to reduce the bilateral trade deficit.

At the same time, India drew red lines by refusing concessions on GM foods, soya, maize, cereals, and dairy products, citing farmer livelihoods and food security.

Likely Impact on India: 

Impact on Exports: 

  • Tariffs are expected to affect 55% of India’s $89-billion goods exports to the United States.
  • Labour-intensive industries such as textiles, clothing, gems and jewellery, and engineering goods will be among the worst hit.
  • Indian exporters in low-to-medium value segments will lose competitiveness, as South and Southeast Asian countries like Vietnam and Bangladesh enjoy lower tariff regimes.
  • China may gain an advantage because of the 90-day tariff extension it received from the US and a lower 30 per cent tariff rate, thereby diverting some orders away from India.

Impact on Imports: 

  • India’s imports from the US, which include mineral fuels, uncut diamonds, capital goods, machinery, organic chemicals and plastics, and edible fruits and nuts, will not be directly protected by retaliation.
  • Any counter-tariffs by India on these imports would hurt domestic industries that depend on these products as raw materials or intermediates. 

Impact on Services and Investments: 

  • Tariff retaliation by India may provoke the US to adopt cross-sectoral retaliation in services trade, threatening India’s IT and professional services exports.
  • Indian professionals may face stricter visa regimes or regulatory hurdles in the US, which would affect India’s services sector earnings.
  • The US investors may become more cautious about investing in India if trade relations deteriorate, thereby affecting foreign direct investment flows.

Impact on Employment and Economy: 

  • Job losses are likely in labour-intensive industries like textiles, jewellery, and engineering goods, where export demand will shrink.
  • Export slowdown may create inflationary pressures in India by reducing foreign exchange earnings and widening the current account deficit.
  • Small and medium enterprises (SMEs), which form the backbone of India’s export ecosystem, will be particularly vulnerable to these shocks.

Way Forward

  • India must recognise the risks of overdependence on a single market, as nearly 17% of its goods exports currently go to the United States. It shows the urgent need to diversify export destinations, particularly towards Latin America, Africa, West Asia, and other emerging economies.
  • India must broaden its export basket by moving beyond traditional sectors such as textiles, gems, and jewellery to high-value areas like electronics, green technologies, and services.
  • Strengthening and fast-tracking trade agreements with partners such as the EU, Japan, Korea, ASEAN, and Australia is necessary to secure alternative markets.
  • India should expand intra-BRICS and South-South trade, thereby reducing dependence on Western economies and creating alternative trade corridors.
  • India must invest in skilling, technology, and innovation ecosystems to ensure its workforce and industries remain competitive in a rapidly changing global economy.

The episode should be seen as a wake-up call similar to the 1991 reforms, pushing India towards deeper economic reforms and stronger integration with global trade networks.

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The Asia Challenge: Opportunities and Challenges for India

Context: Indian Prime Minister’s Asia tour covering the Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China and a bilateral visit to Japan has significant implications for India’s foreign policy. The visit comes amid trade tensions with the US, strained ties with China, and shifting alliances in Asia. 

Relevance of the Topic: Mains: PM Modi’s Asia Tour: Opportunities and Challenges for India. 

For India, the tour highlights both strategic opportunities and persistent challenges in its continental and maritime engagements.

Opportunities for India

  • Strengthening Strategic Partnership with Japan: India and Japan share converging interests in maintaining a free, open, and inclusive Indo-Pacific. Defence cooperation, joint exercises, and technology collaborations can deepen mutual trust. Japan’s concerns over US unpredictability create room for India to emerge as a reliable strategic partner.
  • Expanding Trade and Technology Cooperation: Japan offers prospects for investment in critical technology, resilient supply chains, and infrastructure development. Collaborations in areas like digital economy, semiconductors, and green energy can reduce India’s over-dependence on China.
  • Leveraging Maritime Asia: India’s geographical position and naval strength make it a natural partner for Japan, South Korea, and Southeast Asian nations. Maritime partnerships allow India to project influence beyond the continental constraints of its neighbourhood.
  • Diplomatic Space in SCO: Despite contradictions, the SCO provides a platform for India to engage with China, Russia, Central Asia, and Pakistan simultaneously. Participation helps India avoid isolation in regional forums where China is expanding its influence. Even limited dialogues on border management or counter-terrorism can reduce immediate risks of escalation.
  • Balancing Major Powers: India’s presence in both Japan and China underscores its multi-alignment strategy. By engaging with the US allies like Japan, while also remaining part of SCO, India signals its intent to retain strategic autonomy.

Challenges for India: 

Economic Vulnerabilities to China

  • India’s manufacturing sector remains dependent on China for critical inputs like rare earth magnets and tunnelling equipment. Disruptions in supply chains, such as China’s withdrawal of engineers from iPhone production in India expose India’s fragile industrial base.
  • Campaigns like Make in India and Swadeshi will take time to reduce this dependency.

Limitations of the SCO Forum: 

The SCO is portrayed as an inner-Asian club standing up to American dominance, but this aspiration is undermined by severe internal contradictions. They include-

  • India-China mistrust
  • India-Pakistan disputes
  • Though counterterrorism was one of SCO’s founding goals, the forum has been unwilling to censure Pakistan due to China’s protection.
  • Economic divergence: India rejects China’s Belt and Road Initiative (BRI), central to SCO’s economic vision.

Russia’s Shrinking Utility: 

  • Discounted Russian oil, once seen as a stabilising factor, has now become a diplomatic liability as the US pressures India to scale down energy ties with Russia.
  • Russia’s growing dependence on China reduces India’s room for manoeuvre in Eurasian geopolitics.

Erosion of Strategic Primacy in South Asia: 

  • With SAARC effectively non-functional, China has quietly drawn much of the Asian subcontinent into the SCO orbit. China is promoting new minilateral formats such as trilaterals with Pakistan and Afghanistan, and dialogues with Bangladesh and Myanmar positioning itself as South Asia’s most consequential external power.
  • China seeks to entrench its role as both economic engine and political stabiliser, thereby eroding India’s traditional strategic primacy in the neighbourhood.

Uncertainty in US Relations: 

  • Trade tensions with the US threaten India’s biggest export market.
  • While the SCO and Japan visits show alternatives, neither Russia nor China can replace the US as a trade partner. In 2024, India’s exports to the US stood at $88 billion with a $45 billion trade surplus, far exceeding exports to Russia ($5 bn) and China ($15 bn) combined.

Risk of Losing Strategic Space to US-China Rivalry: 

  • As both the US and China advance competing regional visions for South Asia, India risks being squeezed between the two.
  • China is embedding itself as the region’s “benign benefactor” through the SCO and minilateral formats, while the US has signalled its intent to counter this influence by appointing a special envoy for South Asia.
  • In this growing great-power rivalry, India faces the danger of erosion of its traditional strategic primacy in its own neighbourhood.

For India, the challenge is to stabilise difficult ties with China and Russia, while deepening reliable partnerships like Japan to safeguard its strategic autonomy in an era of great-power rivalry.

India-Fiji deepen Defence and Climate Cooperation 

Context: Recently, the Prime Minister of Fiji paid his first official visit to India. India and Fiji unveiled significant initiatives to enhance defence and maritime security cooperation, positioning Fiji as an important partner in the Indo-Pacific amidst rising Chinese influence in the region.

Relevance of the Topic: Mains: Strategic Significance of India-Fiji ties in the Indo-Pacific. 

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Key Outcomes of the Visit

The most important outcome of the visit was the announcement of enhanced defence and maritime cooperation between India and Fiji. 

  • India has committed to providing training and equipment to upgrade Fiji’s maritime security and strengthen the capacity of its armed forces.
  • A Defence Attaché post was created at the High Commission of India in Suva, which will also cover the wider Pacific Islands, marking a permanent institutional mechanism for security engagement.
  • India announced the gifting of two sea ambulances to the Fijian Military Forces and extended support to Fiji’s initiative “Ocean of Peace,” which aligns with India’s Indo-Pacific Oceans Initiative. 
  • India announced the establishment of a Cyber Security Training Cell in Fiji, thereby extending cooperation in digital security and resilience against cyber threats.
  • Both sides agreed to deepen cooperation in humanitarian assistance and disaster relief, given the vulnerability of Fiji and other Pacific Island countries to cyclones and climate-induced disasters.
  • Nine agreements and MoUs were exchanged between the two countries, including- construction and operation of a super-speciality hospital in Fiji; supply of medicines under the Jan Aushadhi scheme; migration and mobility partnership etc. 
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Strategic Significance of India-Fiji Ties in Indo-Pacific

  • Geopolitical Leverage: Fiji’s central location in the South Pacific provides India with a strategic gateway to engage with other Pacific Island nations and expand its maritime outreach.
  • Maritime Security Cooperation: By assisting Fiji in protecting its vast Exclusive Economic Zone (EEZ), India strengthens regional maritime security and ensures safe and open sea lanes in the Indo-Pacific.
  • Forum for India-Pacific Islands Cooperation (FIPIC): India views Fiji as a hub for its engagement with Pacific Island countries, and closer ties with Suva strengthen India’s position in FIPIC.
  • Countering Chinese Influence: Strengthening defence and development ties with Fiji helps India counterbalance China’s growing military and economic footprint in the Pacific Islands.
  • Quad Plus Alignment: Closer India-Fiji ties complement the objectives of the Quad (India, US, Japan, Australia) to promote a free, open, inclusive, and rules-based Indo-Pacific order.
  • Climate and Disaster Resilience: Cooperation in disaster management and humanitarian assistance positions India as a credible partner for climate-vulnerable Pacific Island states.
  • Diaspora Connect: Fiji’s large Indian-origin community (nearly 38% of the population) provides India with strong cultural and people-to-people linkages that reinforce strategic trust.
  • Soft Power and Development Diplomacy: India’s initiatives in healthcare, migration, and capacity building enhance its image as a development partner, broadening the scope of its influence beyond defence into socio-economic cooperation.

India-Fiji relations have acquired new strategic depth by combining defence, development, and maritime cooperation within the larger Indo-Pacific framework.

GST Rate Rationalisation: Two slab GST proposal gets GoM nod 

Context: The Group of Ministers (GoM) on Rate Rationalisation formed by the Goods and Services Tax (GST) Council has decided to accept the Centre’s two-rate structure proposal for GST. Final decisions on all matters pertaining to GST are taken by the GST Council, as GoMs are only recommendatory bodies. 

Earlier, the former Chief Economic Adviser has emphasised the need for simplification of GST structure and rate rationalisation. 

Relevance of the Topic:Prelims: Features of GST; GST Rate Rationalisation. Mains: Challenges in GST Implementation. 

Features of Goods and Services Tax: 

  • GST is a single tax levied on the supply of goods and services across all stages of the supply chain (right from the manufacturer to the consumer). 

GST subsumes multiple state and central taxes: 

  • Excise duty 
  • Service tax 
  • Additional excise duty 
  • Additional customs duty 
  • States sales tax 
  • Entertainment tax 
  • Octroi tax (Entry tax)
  • GST has dual tax structure: 
    • CGST (Central GST) goes to the Central Government.
    • SGST (State GST) goes to the state government, in which the sale is taking place.
  • GST is a destination based tax. During interstate trade, tax is imposed by the state (importing state) in which the consumption takes place instead of the state which supplied the goods/service. 
  • Rate slabs: There are four primary tax rates (5%, 12%, 18%, and 28%) under GST.  

GST Rate Rationalisation

The GST reforms will simplify the tax structure, reduce disputes on classification of products and also boost consumption. They include: 

  • Elimination of two tax slabs of 12% and 28% in the current GST structure and retention of the 5% and 18% tax rates. This would entail 99% of the items in the 12% slab moving to 5%, and 90% of the items in the 28% slab moving to 18%. 
  • Special slab of 40% for luxury and sin goods: Ultra-luxury goods (like high-end cars) along with sin goods and services such as tobacco, cigarettes, and online real-money gaming would be moved to a higher 40% slab. However, the compensation cess currently being levied on the items in the 28% slab would no longer apply. 
  • Proposed exemption of individual life and health insurance premiums from the 18% goods and services tax (GST) slab to nil. 

Final decisions on all matters pertaining to GST are taken by the GST Council, as GoMs are only recommendatory bodies. The date of the next GST Council meeting is expected to take place in early September 2025.  

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Significance: 

  • Bring down tax burden on consumers: The proposed shift of most items from 12% slab to 5% and from 28% slab to 18% eases costs and enhances affordability for households.
    • The GST rate of essential items (food, cloth) is expected to decline to 5% from 12%, the CPI inflation in this category may also come down by 10-15 bps after considering a 60% pass through effect on food items. 
    • Rationalisation of GST rates of services will lead to another 5-10 bps reduction in CPI inflation on other goods and service items, considering a 25% pass through effect.
  • Spur growth of MSMEs: Lower GST slabs will have a subsequent multiplier effect because of lower reduced logistics costs and simplified compliance, especially for MSMEs. 
  • Makes goods competitive: A lower GST rate for both the final products and their inputs would make Indian goods competitive in global markets. 
  • GST exemption would provide significant relief to millions of Indians currently paying 18% GST on both life and health insurance premiums.

GST reforms align with the government’s broader agenda of growth and financial inclusion.

Concerns of GST Rate Rationalisation:

  • Revenue loss to states due to rationalisation: Earlier rate rationalisation by the GST Council has brought down the effective weighted average GST rate from 14.4% to around 11.6%. With the current rationalisation of rates the effective weighted average GST rate is believed to further come down to 9.5%. 
    • Positive scenario: Lower GST slabs will encourage consumption in the states, lead to higher sales volumes and can partly make up for lower rates.
    • Negative scenario: If consumption growth is not high enough, this will lower the GST revenue of the state (unless compensated by the Central government). According to an SBI research report, estimated revenue loss due to the changes could be ₹85,000 crore per annum and around ₹45,000 crore in the current financial year.
  • Burden on exchequer: GST exemption would cost the exchequer an estimated ₹9,700 crore in annual revenue. 

However, since more than 70% GST collections come from 18% slab (which is not proposed to be changed in general) the revenue impact of GST cuts may be limited, particularly because reduced prices will spur demand. 

There should be a comprehensive discussion on the possibility of loss in revenue for the States due to GST rate rationalisation. If the States incur any losses due to rationalisation, there should be a mechanism to compensate the States and preserve revenue neutrality. 

Also Read: Challenges in GST Implementation 

Need for a Separate Budget for Agriculture

Context: The imposition of 50% penal tariffs by the United States on Indian farm products in 2025 underlines the structural fragility of Indian agriculture and the asymmetry in global trade. 

Relevance of the topic:

Prelims: WTO’s Agreement on Agriculture (AoA); Aggregate Measurement of Support (AMS); MSP, FPOs; PMFBY.

Mains: State of Indian Agriculture, Issues of subsidy. 

Asymmetry in Global Trade

  • The US and EU’s so-called “Green Box” subsidies, which they claim are non-trade-distorting, effectively grant their farmers an unfair advantage in global markets.
                        United States                            India 
As per WTO, the US spends over $48 billion annually on domestic farm support. This includes crop insurance subsidies covering up to 60% of premium. A large number of our farmers are waiting for compensation for their produce losses under PMFBY (Pradhan Mantri Fasal Bima Yojna). 
Price guarantees and marketing loans ensure farmers earn above-market rates.India farmers are waiting for a legal guarantee of MSP. 
Export-linked supports disguised as food aid and development programmes allow the US’s wheat, corn or dairy farmers to sell abroad at or below cost without losing income.India’s WTO-notified support (Aggregate Measurement of Support) is less than 5% of production value. It is far below the 10% limit allowed for developing countries.

State of Indian Agriculture: 

Agriculture sustains 42% of our population and employs 46% of our workforce. It contributes less than 20% of the GDP. The recent NABARD (National Bank for Agriculture and Rural Development) Rural Financial Inclusion Survey reveals that:

  • Low household income: An average farming household earns Rs 13,661 per month, with a mere Rs 4,476 from actual farming, the rest comes from supplementary work, such as working as labourers or engaging in petty trade. 
  • Fragmentation of Land: Average farm size has shrunk from 2.28 hectares in 1971 to 0.74 hectares in 2021 which is too small for efficient mechanisation.
  • High Input Cost: Input costs (diesel, fertilisers, seeds) have risen faster than crop prices, and are squeezing margins.
  • Lack of employment alternatives: A large percentage of India’s population is engaged in agriculture is a symptom not of farming’s attractiveness, but of manufacturing and services failing to create the 7.9 million jobs a year.

The US tariff shock highlights a stark truth- protection alone cannot secure agriculture’s future. The agriculture sector in India needs structural reforms as the long-term strategy. It requires equipping farmers with the essential tools, providing market access, and creating alternative employment opportunities. 

Way Forward

India must implement three urgent and decisive shifts.

  • Labour Transition (From Agriculture to Manufacturing & Services): India must shift surplus workers from low-yield farming into manufacturing and services by promoting labour-intensive sectors like textiles, food processing, and light engineering, supported by rural skill training and urban job creation.
  • Prioritise farm consolidation and mechanisation: Land pooling through cooperative farming, FPOs, and land leasing reforms can enable mechanisation, modern irrigation, and precision farming, thereby raising productivity and reducing costs.
  • Need to boost value addition and enhance export competitiveness:
    • India’s farm exports, which stand at $48.15 billion for 2023-24, could experience substantial growth through improved logistics, branding, and quality certification.
    • Reducing post-harvest losses from the current 15-25% to the global standard of 5% can release vast quantities for export.

Protection serves a purpose, but it is reform that will ultimately secure our agricultural future, and for this the Rashtriya Kisan Kalyan Kosh (a separate budget like defence) is the need of the hour.

Also Read: Needs of Indian Agriculture Sector

India needs a National Space Law

Context: India’s space programme has achieved remarkable milestones from the cost-effective success of Mangalyaan (2014) to the historic soft landing of Chandrayaan-3 (2023) and the upcoming Gaganyaan mission. These achievements have positioned India among the top spacefaring nations. 

However, India lacks a comprehensive National Space Law which is essential to regulate private participation, ensure accountability, and align with international obligations.

Relevance of the Topic: Prelims: India's and Global Space Legislation.Mains: Why India Need for National Space Legislation? 

Global Space Legislation

The Outer Space Treaty of 1967 is the foundational legal framework for outer space.

Outer Space Treaty of 1967: 

  • It declares space to be the province of all mankind
  • Prohibits any national appropriation of celestial bodies, and 
  • Makes states responsible for all space activities conducted under their jurisdiction, including those by private actors.
  • Its companion agreements create binding frameworks of rights, responsibilities, and liability rules. 

Companion Agreements of OST 1967: 

  • Liability Convention 1972: Establishes state responsibility for damages caused by space objects.
  • Registration Convention 1976: Mandates registration of space objects.
  • Moon Agreement 1979: Treats space resources as “common heritage of mankind” (India is not a party).

Limitations: 

  • These treaties are not self-executing. They need to be translated into national laws for effective enforcement.

India’s Current Legal & Policy Framework

India has ratified the key UN space treaties but it is still in the process of enacting comprehensive national space legislation. Current regulatory measures include : 

  • Indian Space Policy, 2023: outlines roles of government and private entities.
  • IN-SPACe (Indian National Space Promotion and Authorisation Centre): Regulator for non-governmental space activities.
  • Catalogue of Indian Standards for Space Industry: Provides technical safety guidelines.
  • Norms, Guidelines and Procedures (NPG), 2023: Framework for authorisation of space activities.

Need for National Space Legislation: 

  • International Obligations: Under Article VI of the OST, India is internationally liable for activities of private companies. Without national law, India risks treaty violations or arbitrary regulation.
  • Predictability & Legal Clarity: National space legislation offers predictability, legal clarity, and a stable regulatory environment for both government and private actors, critical for attracting private investments.
  • Industry Concerns: 
    • IN-SPACe lacks statutory authority; its decisions are vulnerable to procedural challenges.
    • Companies face delays due to the dual-use nature of space technology (defence and civilian), requiring multiple ministry clearances.
    • Unclear FDI rules and lack of affordable third-party insurance hinder startups.
    • Weak IPR protection risks migration of talent to IP-friendly jurisdictions.
  • Strategic Importance: Space technologies are dual-use and critical for national security, absence of legal clarity can weaken strategic autonomy in space.

At present, more than 20 countries including the U.S., Luxembourg, and Japan already have national space legislation. To compete in this rapidly expanding market which is projected to reach $1 trillion globally by 2040, India cannot afford regulatory ambiguity.

In the words of UNOOSA, “policy signals intent, but law creates enforceable structure.” For India to lead the new space age, enacting this law is no longer optional but an imperative.

India sets eyes on 10% of global Green Hydrogen demand

Context: India aims to capture 10% of the global green hydrogen demand by 2030, with significant progress made through the National Green Hydrogen Mission. The global green hydrogen demand is expected to exceed 100 million metric tonnes (MMT) by 2030. 

Relevance of the topic:

Prelims: Types of Hydrogen, National Hydrogen Mission

Mains: Benefits and Challenges in production of Green Hydrogen as a fuel. 

Hydrogen as an Alternative Fuel

  • Hydrogen is the lightest and the most abundant element in the universe. On Earth, it is found in compounds like water or hydrocarbons. However, Hydrogen is not present in the free state. Therefore, it must be created and stored before it tends to be utilised.
  • Hydrogen Fuel: Hydrogen fuel is produced by splitting water (H₂O) into its components: hydrogen (H₂) and oxygen (O₂). The hydrogen gas can be used to power fuel cells, which generate electricity through a chemical reaction between hydrogen and oxygen, releasing only water vapour as a byproduct. 
image 20

Green Hydrogen: 

  • Green hydrogen is hydrogen produced using electricity from clean energy sources, such as wind and solar energy, which do not release greenhouse gases when generating electricity. 
  • Green hydrogen is made when water (H2O) is split into hydrogen (H2) and oxygen (O2) via a process known as electrolysis.

Other Types of Hydrogen:

Depending on the type of production used, different colour names are assigned to the hydrogen.

1. Grey Hydrogen: 

  • Grey hydrogen is produced using fossil fuels such as natural gas or coal. Grey hydrogen accounts for roughly 95% of the hydrogen produced in the world today.
  • The two main production methods are steam methane reforming and coal gasification. Both of these processes release carbon dioxide (CO2).
  • If the carbon dioxide is released into the atmosphere, then the hydrogen produced is referred to as grey hydrogen.

2. Blue Hydrogen: 

  • Blue hydrogen is similar to grey hydrogen, except that most of the CO2 emissions are sequestered (stored in the ground) using carbon capture and storage (CCS). 
  • Capturing and storing the carbon dioxide instead of releasing it into the atmosphere allows blue hydrogen to be a low-carbon fuel. 
  • Blue hydrogen is a cleaner alternative to grey hydrogen, but is expensive since carbon capture technology is used.

3. Pink Hydrogen: 

  • Pink hydrogen is produced through electrolysis of water but using energy from nuclear power, which does not produce any carbon dioxide emissions.
  • Pink hydrogen facilities can achieve a high capacity factor due to the steady base-load profile of nuclear power (involving both stability and density), as compared to the intermittent supply from renewable sources (solar, wind). 

4. Turquoise Hydrogen: Turquoise hydrogen is made using a process called methane pyrolysis. In this process methane is split into hydrogen and solid carbon with heating in reactors or blast furnaces.

National Green Hydrogen Mission:

  • National Green Hydrogen Mission was launched in 2023 with an outlay of Rs. 19,744 crores from FY 2024 to FY 2030.
  • Aim: To develop India into a global hub for production, usage and export of Green hydrogen and its derivatives.
  • The scheme has set out a goal of at least 5 million metric tonnes (MMT) of annual green hydrogen production capacity by 2030.
  • Initiative of: Ministry of New and Renewable Energy (MNRE).

As part of the mission, the government has awarded 3,000 megawatts of electrolyser manufacturing capacity to 15 companies, signaling a major industrial push.  

Recently, the government has announced that India aims to secure 10% of global green hydrogen demand, or 10 million metric tonnes (MMT) by 2030, which is an aspirational target than that set in the National Green Hydrogen Mission.  

Challenges associated with production of Green Hydrogen:

  • Renewable energy supply crunch: Achieving the target under the National Green Hydrogen Mission requires the installation of 125 GW of dedicated renewable energy and 250,000 gigawatt-hr. units of power (250 TWh), equivalent to about 13% of India’s present electricity generation. 
  • Relying on conventional energy sources: The main concern is that if electrolysers (which split water to produce hydrogen and oxygen) were to run 24x7, they would have to operate even at night when no solar power is available. This would then mean tapping into conventional coal-fired electricity (about 70% of the electricity on the grid is coal-generated).
  • Burning Biomass: India’s standards allow the use of biomass to produce green hydrogen, which results in carbon emissions when burnt.
  • Technological constraints: The challenge is to compress or liquify Hydrogen. It needs to be kept at a stable minus 253°C (far below the temperature of (-) 163°C at which Liquified Natural Gas (LNG) is stored; making its ‘prior to use cost’ extremely high.
  • Prohibitive Costs: The production cost of green hydrogen has been a prime obstacle. Research conducted by the International Renewable Energy Agency (IRENA) indicates that the cost of its production is about $1.5 per kg by 2030 (for countries with eternal sunshine and huge unoccupied areas) if several conservative measures are implemented.
  • Lack of Manufacturing and deployment of electrolysers: India’s current electrolysers manufacturing capacity is around 0.4 GW, which needs to be scaled to ~200 GW by 2050.
  • High cost of storage system: Fuel cells which convert hydrogen fuel to usable energy for cars, are still expensive.

Way Forward

Development of technology to produce green hydrogen is expensive. However, falling prices for renewable energy and fuel cells and stringent climate change regulations have spurred investment in the sector. 

  • Investing in R&D and promoting private sector participation in the hydrogen economy.
  • Developing standardised procedures, rules and standards for hydrogen economy which will standardise and scale up production. 
  • Mandating large users of hydrogen to shift to green hydrogen such as refineries, iron, and steel plants etc. For example, a minimum green hydrogen mandate can be introduced in such industries. 
  • Green hydrogen facilities can be created at sites where the cost of producing renewable energy is lowest. E.g., in the Thar desert region in Rajasthan and Ladakh etc.
  • Facilitating international trade in clean & green hydrogen.

Also Read: Hydrogen as an alternative fuel: Explained 

Taking stock of India-China Bilateral Ties 

Context: Recently, the Chinese Foreign Minister paid a two day official visit to New Delhi, first such visit since 2021. He co-chaired the 24th round of the Special Representatives’ dialogue on the Boundary Question between India and China with India’s National Security Advisor.

Relevance of the Topic : Mains: India and its Neighbourhood: India-China Relations. 

India-China relations constitute one of the most significant bilateral equations in contemporary international politics. Characterised by deep economic interdependence, multilateral cooperation, and persistent strategic distrust, the relationship has been under strain since the 2020 Galwan clashes

Recent talks between Chinese Foreign Minister Wang Yi and Indian leadership, along with the planned Modi-Xi meeting at the upcoming SCO Summit in Tianjin, indicate renewed efforts to stabilise borders, rebuild economic ties, and restore strategic trust.

Key Developments of Chinese Foreign Minister’s Visit

Border Management and Security: 

  • Both sides agreed to establish new mechanisms under the Working Mechanism for Consultation and Coordination (WMCC) on India-China Border Affairs:
    • Expert Group to explore early harvest outcomes in boundary delimitation.
    • Working Group to advance effective border management in order to maintain peace and tranquillity in the border areas.
    • General Level Mechanisms in the Eastern and Middle Sectors, in addition to the existing General Level Mechanism in Western Sector. 
  • Both sides reiterated that peace and tranquillity along the LAC is essential for overall ties.

Political and Diplomatic Engagement: 

  • Indian Prime Minister Modi stated that India-China relations must be guided by mutual respect, sensitivity, and shared interests.

Economic and People-to-People Ties: 

  • Agreement to resume direct flight connectivity and finalise an updated Air Services Agreement.
  • Decision to reopen border trade routes at Lipulekh Pass, Shipki La Pass, and Nathu La Pass.
  • China assured India of addressing its needs for fertilisers, rare earth minerals, and tunnel boring machines.
  • Revival of Kailash-Mansarovar Yatra and planning of people-to-people exchanges to mark the 75th anniversary of diplomatic ties in 2025.
  • Agreement to facilitate visas for tourists, businesses, media, and other visitors.

Strategic and Regional Issues: 

  • India strongly raised concerns about cross-border terrorism from Pakistan, with both sides agreeing that SCO must prioritise counter-terrorism.
  • India expressed concerns over China’s mega dam on the Brahmaputra (Yarlung Tsangpo), stressing the need for transparency and data-sharing.
  • On trans-border rivers cooperation, the Chinese side agreed to share hydrological information during emergency situations based on humanitarian considerations. 
  • Both sides agreed to cooperate on multilateral issues, uphold a rules-based WTO system, and promote a multipolar world.
  • India and China pledged reciprocal support for hosting BRICS summits in 2026 and 2027.

Challenges in India-China Relations: 

  • Taiwan Controversy: China’s readout claimed Jaishankar acknowledged Taiwan as part of China. India clarified no change in policy, i.e., relations with Taiwan remain economic, technological, cultural.
  • Trust Deficit from repeated Chinese incursions on the border: Depsang in 2013, Chumar in 2014, Doklam in 2017, Galwan in 2020. 
  • Chinese Projects on Brahmaputra: India remains cautious of hydrological risks and ecological consequences.
  • China-Pakistan Axis: India continues to be wary of China’s all-weather friendship with Pakistan. China’s military cooperation with Pakistan was on display during Operation Sindoor, when the Chinese supplied weapons and live intelligence to the Pakistanis. 
  • China’s export restrictions: India is concerned at China’s export restrictions on rare earths, tunnel boring machines, and fertilisers, which are key to India’s development and food security.

The Wang Yi visit and the upcoming Modi-Xi meeting represent an opportunity for recalibration in India-China relations. The litmus test remains peace and stability on the border. For India, the challenge will be to remain firm on sovereignty while pragmatic on cooperation.

Also Read: India-China Relations: Developments & Challenges 

Governor Can Act Independently: A-G

Context: The Attorney-General of India submitted before a five-judge Bench headed by the Chief Justice of India that a Governor’s power to withhold assent to a proposed State legislation is an act independent of the Council of Ministers.

Relevance of the Topic:Prelims: Constitutional Provisions on Governor’s Role. Mains: Governor: Powers, challenges & way forward. 

Constitutional Provisions on Governor’s Role

  • Article 163: Council of Ministers to aid and advise the Governor.
    • Article 163 (1): There shall be a Council of Ministers led by the Chief Minister to aid and advise the Governor in the exercise of his functions, except in matters where the Constitution allows him to act on his own discretion.
    • Article 163 (2): If any question arises with respect to whether a matter falls under Governors' discretionary power or not, the governor’s decision will be final. The validity of anything done by the governor in his discretion will not be called into question.
    • Article 163 (3): The advice given by the Ministers to the Governor shall not be inquired into any court.
  • Article 200: When a bill is sent to the governor after it is passed by state legislature, he can:
    • Give the assent to the bill
    • Withhold the assent to the bill
    • Return the bill (if not a money bill) for reconsideration of the state legislature. However, if the bill is passed again by the state legislature with or without amendments, the governor has to give assent to the bill
    • Reserve the bill for the consideration of the President.

The controversy lies in withholding the assent to the bill- whether it is a discretionary power or subject to ministerial advice. 

Governor Can Act Independently: A-G 

  • The Attorney-General of India submitted before a five-judge Bench headed by the Chief Justice of India that a Governor’s power to withhold assent to a proposed State legislation is an act independent of the Council of Ministers.
  • The Governor cannot be expected to be bound by the advice of the House if the proposed State law was found to be unconstitutional. In such cases, the Governor can act outside the aid and advice of the Council, and even contrary to the mandate of the House/Council of Ministers. 
  • A power to withhold necessarily involves personal independent judgment, guided by settled principles of laws. The 42nd Constitutional Amendment made Article 74 (1) explicit that the President shall act in accordance with the Cabinet advice. But Article 163 (Governors) was not amended to match Article 74. 

Relevant Court Cases: 

  • Shamsher Singh v. State of Punjab (1974): The Supreme Court clarified that the Governor must act on the aid and advice of the Council of Ministers, except in situations where the Constitution explicitly allows the Governor to act in his discretion. 
  • State of Rajasthan v. Union of India (1977): This case dealt with the role of the Governor under Article 356, which is related to President’s Rule. While discussing Article 163, the Supreme Court emphasised that the Governor's discretion is limited and he must act on the advice of the Council of Ministers, except in specific situations provided by the Constitution.
  • S. R. Bommai v. Union of India (1994): Primarily a case on Article 356, it also discussed the role of the Governor under Article 163. The Supreme Court held that the Governor's report to the President under Article 356 must be based on objective material, and the Governor’s actions are subject to judicial review.
  • M. P. Special Police Establishment v. State of Madhya Pradesh (2004): This case dealt with the Governor’s discretion in granting sanction for prosecution. The Supreme Court ruled that in certain circumstances, the Governor may act independently of the Council of Ministers, especially where the ministers themselves are under investigation. 

Issues and Concerns: 

  • Undefined scope of discretionary powers: The Constitution does not clearly define the scope of discretionary powers with the governor, thus leaving the scope for misuse. 
  • Erosion of Federalism: Frequent withholding or reserving of bills can delay state legislations and undermine elected government.   

Hence, this may lead to the situations when governors may have political bias and can act as the agent of the Union government. 

Way Forward

  • Sarkaria Commission (1988): Governor should be a detached figure and not too intimately connected with the local politics of the State. Discretion should be used sparingly; reserve bills only when required by the Constitution (as a last resort).
  • Punchhi Commission (2007): Article 163 does not give the Governor a general discretionary power to act against the advice of the Council of Ministers. The exercise of discretion is limited, and it must be dictated by reason, activated by good faith, and tempered by caution.
  • Nabam Rebia and Bamang Felix vs Deputy Speaker (2016): The Governor cannot withhold assent to a Bill indefinitely, but must return it to the Assembly with a message, and this could include his recommendation for amendments to the Bill.
  • State of Punjab vs Principal Secretary to Governor of Punjab (2023): Governor can not veto the legislature by indefinitely withholding assent to the bill. In case the bill is re-enacted, the governor does not exercise discretion to withhold the re-enacted bill.
  • SC’s Judgment in Tamil Nadu Governor case (2025): SC has prescribed a time limit for the Governor to exercise his powers under Article 200. The court said that a governor must be a friend, guide and philosopher to the State, not a hindrance.
    • The governor has a maximum of one month to withhold the assent based on the aid and advice of the State Cabinet. 
    • The governor has a maximum period of three months to return the bill by specifying reasons, if the bill is withheld contrary to the advice of the Cabinet. 
    • The governor has a maximum period of three months to reserve the bill for the President's consideration against the advice of the Cabinet. 
    • The governor must grant assent to the bill re-passed by the state legislature under Article 200 within a maximum period of one month. 

Hence, there is a need to align the Governor’s role with cooperative federalism, as envisioned by the Constitution.

Also Read: The Governor 

Animal-Free Protein using Recombinant DNA Technology

Context: The global market base for alternative proteins is on the rise. Animal-Free Proteins produced using Recombinant DNA Technology are one such viable option to produce alternative proteins. 

Relevance of the Topic:Prelims & Mains: Recombinant DNA Technology: About, Applications & Benefits; BioE3 Policy.  

Animal-Free Protein using Recombinant DNA Technology: 

  • Animal-free protein refers to proteins (dairy, egg, meat proteins, other biological products) produced without using animals. The proteins are produced by relying on microbes (bacteria, fungi, yeast) engineered through Recombinant DNA Technology (rDNA). E.g.,
    • Casein (milk protein) produced in labs without cows.
    • Insulin (earlier extracted from a pig’s pancreas) is now developed by bacteria.
    • Collagen (earlier extracted from animal bones) is now produced in labs. 
  • This is also called precision fermentation or microbial fermentation.

Key steps involved:

  • Identification of the gene responsible for making a specific animal protein (E.g. Insulin)
  • Gene Insertion: The gene is inserted into the DNA of a vector (bacteria, fungi, yeast) using Recombinant DNA Technology. 
  • Protein Expression: The vector is now genetically engineered and acts like a mini factory (bio factory) and produces the desired protein. 

Benefits of Animal-Free Protein using Recombinant DNA Technology

  • Efficient: Requires less resources (land, water, feed) compared to traditional animal husbandry. 
  • Sustainable: Reduces dependence on livestock farming (which contributes to over 14% of global greenhouse gas emissions). 
  • Safer: Eliminates the risks of zoonotic pathogens (E.g., prions in mad cow disease, viruses in poultry). Reduced risk of xenobiotic rejection or allergic reactions. 
  • Animal Welfare: No ethical and moral issues.
  • Desired traits: Proteins can be modified for enhanced nutrition (E.g., more digestible Casein; allergen free proteins) 

What is Recombinant DNA Technology?

  • Recombinant DNA technology or genetic engineering involves manipulation of the genetic code or DNA of a living organism by combining genetic material from different sources.  
  • Basic principle: Isolating a specific gene or DNA sequence of interest from one organism and inserting it into the genome of another organism, via an appropriate vector. The inserted gene can be from the same species or from a different species.
  • Use case: It is used to obtain desired characteristics (traits) in living organisms or to produce useful biological products.  
image 18

Key steps involved in R-DNA technology: 

  • Isolation of the gene or DNA sequence of interest from the source organism.
  • Fragmenting this DNA using ‘molecular scissors’ (Restriction endonuclease Enzymes).
  • Screening the fragments for a ‘desired gene’.
  • Inserting the fragments with the desired gene into a ‘vector’ (plasmids, bacteriophage, cosmid) to develop a recombinant DNA (done using an enzyme called DNA ligase which acts like molecular glue).
  • Introducing the recombinant vector into the target organism or host cell. The vector integrates into the host's genome and the gene of interest is expressed. 
  • Expression: The target organism produces the protein encoded by the inserted gene.

Applications of R-DNA Technology: 

  • Creation of Genetically modified (GM) crops with desirable traits (resistance to pests, diseases, or herbicides). 
  • Production of therapeutic proteins such as insulin, interferon and human growth hormone (Human insulin was the 1st therapeutic protein to be genetically cloned in E.coli using R-DNA technology). 
  • Creation of Mono-clonal antibodies.
  • Production of vaccines. E.g., Hepatitis-B vaccine
  • Backbone of diagnostic tests for diseases like HIV and Hepatitis. 
  • Produce clotting factors for treating Haemophilia. 
  • Development of synthetic anti-venom, free from animal-derived proteins.
  • Create genetically engineered microorganisms for bioremediation and cleaning up environmental pollutants.

BIOE3 Policy: 

  • BioE3 (Biotechnology for Economy, Environment and Employment) policy was launched in 2024 by the Department of Biotechnology. 
  • Aim: Fostering high-performance biomanufacturing which involves the production of bio-based products across various sectors.
  • India's bio economy has skyrocketed from $10 billion in 2014 to over $130 billion in 2024, with projections to reach $300 billion by 2030. 
  • BioE3 Policy would focus on the following strategic and thematic sectors:
    • Smart proteins and functional foods
    • High value bio-based chemicals, biopolymers, and enzymes
    • Precision biotherapeutics
    • Climate resilient agriculture
    • Carbon capture & its utilisation
    • Marine and space research

Implementation Strategies:

  • Support innovation-driven research and development (R&D) and entrepreneurship.​
  • Establish biomanufacturing hubs, Bio-AI centers, and biofoundries.​
  • Expand India's skilled biotechnology workforce, especially in tier-II and tier-III cities.​
  • Align with initiatives like 'Net Zero' carbon economy and 'Lifestyle for Environment' (LiFE) to promote a circular bioeconomy.

With the launch of the BioE3 (Biotechnology for Economy, Environment, and Employment) policy, the government is focusing more on the manufacture of smart proteins, which entail reduced land, water, and energy requirements, while addressing nutritional needs and widespread protein deficiencies. 

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