DAILY NEWS ANALYSIS

SRVAs are accounts opened by foreign entities with Indian banks that allow international trade transactions to be settled in Indian Rupees (INR) rather than traditional global currencies like the US dollar or Euro.

• Purpose: The primary purpose of SRVAs is to facilitate the settlement of trade transactions between Indian and foreign entities directly in INR, without needing to convert the currency into a widely used global currency like the USD.
• Background:
  SRVAs were introduced in 2022 as part of India's efforts to promote rupee-based trade settlements and reduce the dependence on hard currencies.
  This move allows exporters and importers to invoice and settle trade directly in INR, enhancing trade flexibility and reducing foreign exchange risk.
• Recent Changes:
  The Reserve Bank of India (RBI) recently made important changes to further support this initiative:
  • Non-resident entities holding SRVAs can now invest their surplus rupee balances in Indian government securities (G-secs) and Treasury Bills.
  • Banks no longer need prior approval from RBI to open SRVAs. Authorized dealer (AD) banks can now open these accounts independently, simplifying and accelerating the process of settling trade in INR.

Significance of SRVAs

• Internationalization of the Indian Rupee (INR):
  SRVAs are a crucial step in India’s long-term goal of internationalizing the rupee. This reduces reliance on hard currencies (such as USD) in bilateral trade, enhancing the global stature of the INR.
• Surplus Rupee Deployment:
  Surplus rupees in SRVAs can be productively invested in Indian government securities, which could help in deepening the Indian capital markets and enhance foreign interest in India’s financial instruments.

What is the Internationalization of the Rupee?

Internationalization of the rupee refers to increasing the usage of the Indian Rupee (INR) in cross-border trade, investments, and financial transactions without the mandatory conversion into dominant foreign currencies like the USD or Euro.

Benefits of INR Internationalization:

1. Reduces Vulnerability:
   • Less reliance on foreign currencies like the USD makes India’s economy more resilient to global crises, like currency shortages or volatility in the dollar.
2. Lower Hedging Costs:
   • By allowing trade to be settled in INR, businesses can avoid the costs associated with currency hedging that arise when using USD or other hard currencies. This reduces currency volatility exposure.
3. Eases Forex Reserve Pressure:
   • By reducing the need for foreign currency reserves (such as USD/EUR), India could free up resources for other economic priorities such as infrastructure development and social programs.
4. Enables Deficit Financing:
   • With greater global acceptance of INR, India could issue rupee-denominated bonds abroad, enabling the government to raise funds in Indian Rupees and reduce dependence on foreign currency borrowings.
5. Strengthens Indian Markets:
   • The more foreign investors that demand INR assets (such as Indian government bonds), the deeper and more liquid India’s financial markets will become, attracting stable long-term capital.

Challenges in INR Internationalization:

1. Limited Global Acceptance:
   • INR is not fully convertible on the capital account, limiting its usage in global financial markets. This hampers its ability to gain widespread use in international trade and investments.
2. Lack of INR Liquidity Abroad:
   • There is insufficient liquidity of INR in overseas financial systems, making it difficult for foreign entities to settle transactions in INR. The lack of INR liquidity restricts the ease and efficiency of cross-border settlements.
3. Regulatory Complexities:
   • Stringent Know Your Customer (KYC) norms and inconsistent regulatory standards between institutions such as RBI and SEBI can deter foreign investors from entering the Indian market.
4. Inadequate Payment Infrastructure:
   • The absence of a seamless INR-based payment infrastructure abroad limits the reach of India's payment systems. Initiatives like UPI and RuPay are growing, but they are not yet globally integrated.
5. Geopolitical and Currency Dominance:
   • The dominance of the USD as the global reserve currency creates significant inertia in moving towards the INR as a global trade currency. Many countries are hesitant to adopt INR unless India becomes a major financial hub.

Key Steps Taken for INR Internationalization:

1. Special Rupee Vostro Accounts (SRVAs):
   • Operationalized with 22 countries to facilitate rupee trade settlements in various bilateral trade deals.
2. MoUs with Central Banks:
   • India has signed agreements with countries like the UAE, Indonesia, and Maldives to settle bilateral trade in local currencies (INR and others).
3. Unified Payments Interface (UPI) Global Expansion:
   • As of July 2025, UPI is operational in seven countries (UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, Mauritius), enhancing the infrastructure for cross-border INR transactions.
4. Strategic Action Plan (RBI):
   • The RBI’s Strategic Action Plan 2024–25 includes initiatives such as:
     • Opening INR accounts for Non-Residents outside India.
     • Enabling FDI and portfolio investments through Special Non-Resident Rupee Accounts (SNRRs).
     • Liberalizing the Foreign Exchange Management Act (FEMA) to ease cross-border trade in INR.
5. Currency Swap Agreements:
   • India has signed currency swap agreements with over 20 countries, ensuring liquidity support and facilitating trade settlements in local currencies.
6. Masala Bonds:
   • Rupee-denominated bonds are being issued to attract global investors, increasing foreign interest in INR assets and improving the liquidity of the rupee globally.

RBI’s Recommendations for INR Internationalization:

1. Boost Cross-Border Settlement Mechanisms:
   • Local Currency Settlement (LCS) frameworks need to be developed and standardized, with sufficient INR liquidity, to reduce dependency on the USD.
2. Strengthening Financial Market Infrastructure:
   • Build a global 24×5 INR forex market to facilitate interbank trades and improve settlement efficiency across borders.
3. G-Sec Inclusion in Global Indices:
   • The RBI recommends including Indian government securities in global indices like JPMorgan, which would attract stable, passive capital flows into Indian bonds.
4. Simplifying KYC and Onboarding Processes:
   • Harmonizing KYC norms across RBI, SEBI, and international custodians can help reduce onboarding delays and encourage foreign investment.
5. Inclusion of INR in IMF’s SDR Basket:
   • The International Monetary Fund (IMF) Special Drawing Rights (SDR) basket currently does not include the INR. India's goal is to get INR included in this basket, further positioning it as a global reserve currency.

Conclusion:

The internationalization of the Indian Rupee is a significant step towards enhancing India’s global economic influence. The recent changes to Special Rupee Vostro Accounts (SRVAs) and other policy measures by the RBI reflect India’s commitment to reduce reliance on foreign currencies in trade and financial transactions. While there are challenges, including global acceptance and infrastructure limitations, the measures outlined by the RBI provide a strong foundation for increasing the INR’s global role.

Recently, the National Accreditation Board for Testing and Calibration Laboratories (NABL), a constituent body of the Quality Council of India (QCI), launched its new Medical Application Portal.

About the Quality Council of India (QCI)

The Quality Council of India (QCI) is a non-profit, autonomous organization established in 1997 under the Societies Registration Act of 1860. The QCI was jointly set up by:

• The Government of India and
• The Indian industry, represented by three prominent industry associations:
  • ASSOCHAM (Associated Chambers of Commerce and Industry of India)
  • CII (Confederation of Indian Industry)
  • FICCI (Federation of Indian Chambers of Commerce and Industry)

QCI operates under the Department for Promotion of Industry and Internal Trade (DPIIT), which is part of the Ministry of Commerce and Industry.

Functions of the Quality Council of India

The main objective of QCI is to establish a robust framework for quality assurance across various sectors in India. Some of the key functions of the QCI include:

1. National Accreditation Body:
   • QCI serves as the primary accreditation body for various industries in India. It ensures that businesses and organizations comply with global standards and practices.
2. Independent Third-Party Assessments:
   • The QCI provides an independent mechanism for third-party assessments of products, services, and processes, helping organizations maintain high standards and meet national and international quality benchmarks.
3. Accreditation Services:
   • Through its various boards, such as the National Accreditation Board for Certification Bodies (NABCB), QCI promotes the adoption of quality standards for Quality Management Systems, Food Safety Management Systems, and Product Certification and Inspection Bodies.
4. Promoting Quality Standards:
   • QCI plays a pivotal role in promoting the adoption and adherence to quality standards across sectors, ensuring that Indian industries meet global quality norms. This is achieved through active collaboration with stakeholders.
5. National Quality Campaign:
   • QCI leads a nationwide quality movement aimed at increasing awareness and adherence to quality standards. The National Quality Campaign encourages organizations to adopt best practices and meet national/international accreditation standards.

Governance of Quality Council of India

QCI functions through its governing body and executive bodies (which include various boards and committees). These bodies implement the strategy, policy, and operational guidelines set out by the governing council.

• The governing council consists of 38 members, ensuring a balanced representation from the Government, industry, and other stakeholders.

NABL and the New Medical Application Portal

The National Accreditation Board for Testing and Calibration Laboratories (NABL) is one of the key bodies under the QCI that provides accreditation to testing and calibration laboratories in India. Its newly launched Medical Application Portal is designed to:

• Streamline the accreditation process for medical laboratories,
• Improve the quality of healthcare services by ensuring that medical labs meet global standards,
• Make the accreditation process more efficient and accessible.

This move is part of QCI's broader efforts to enhance healthcare quality, ensuring that laboratories meet stringent standards that are crucial for reliable and accurate medical testing.

Conclusion

The Quality Council of India (QCI) plays a vital role in setting and ensuring quality standards across various sectors, including healthcare. The launch of the Medical Application Portal by NABL is a significant step towards improving the quality of medical testing and services in India. By streamlining the accreditation process and encouraging adoption of international standards, the QCI continues to be at the forefront of India's quality movement

Recently, the Economic Offences Wing (EOW) of the Mumbai Police arrested a 49-year-old contractor in connection with the multi-crore Mithi River desilting fraud. The scam has resulted in significant financial losses, with the Brihanmumbai Municipal Corporation (BMC) losing over ?65 crore.

This fraud involves the mismanagement and fraudulent practices related to the desilting operations of the Mithi River, a vital watercourse that flows through Mumbai.

About Mithi River

The Mithi River is an important river flowing through the city of Mumbai, Maharashtra, and plays a crucial role in the city’s drainage and monsoon water management systems. Here are some key details about the river:

1. Origin and Course:
   • The river originates from the overflow of Vihar Lake and also receives water from Powai Lake, which is located approximately 2 km downstream.
   • It flows through some of Mumbai’s most densely populated areas, including Powai, Saki Naka, Kurla, Kalina, Vakola, Bandra Kurla Complex, Dharavi, and Mahim.
   • After traveling 18 km, the river discharges into the Arabian Sea at Mahim Creek.
2. River Characteristics:
   • In its upper reaches, the Mithi River has an average width of 5 meters.
   • The river has been expanded over the years, particularly after the devastating 26 July 2005 floods, which resulted in the river being widened to 25 meters in the middle reaches and up to 70 meters in the lower reaches.
   • The river is a seasonal watercourse, primarily depending on monsoonal rainfall for water flow.
3. Importance:
   • The Mithi River is an important part of Mumbai's stormwater drainage system and helps manage the excess rainwater during the monsoon.
   • The city has faced significant challenges in managing the river, especially with flooding issues, which have been exacerbated by encroachments and illegal construction along its banks.
4. Environmental Issues:
   • Over the years, the Mithi River has suffered from severe pollution due to untreated sewage and industrial waste being discharged into it.
   • The river's desilting and cleaning efforts have been a key focus of the BMC to ensure better drainage and reduce flood risks. However, corruption and mismanagement, as evidenced by the recent fraud, have hampered these efforts.

The World Health Organization (WHO) has released its tenth report on the Global Tobacco Epidemic 2025, highlighting the progress made in reducing tobacco use globally and pointing out areas that still need attention.

Key Findings from the WHO Report on Tobacco Epidemic 2025

1. WHO MPOWER Measures:
   • The MPOWER initiative, introduced by the WHO in 2007, includes six key policy prescriptions aimed at reducing tobacco consumption. Since its introduction, 155 countries have implemented at least one of these measures, benefitting over 6.1 billion people.
   • The six MPOWER components are:
     1. Monitor: Tracking tobacco use and prevention policies.
     2. Protect: Protecting non-smokers from exposure to tobacco smoke.
     3. Warning: Including graphic health warnings on tobacco packages.
     4. Offer help: Providing resources for quitting tobacco use.
     5. Enforce: Enforcing laws prohibiting tobacco advertising and sponsorship.
     6. Raise taxes: Increasing taxes on tobacco products.
2. Most Implemented Measure:
   • Among all MPOWER measures, the large graphic health warnings on cigarette packages have seen the most significant progress, with more countries adopting these warnings to inform and warn consumers about the risks of tobacco.
3. Effectiveness of Mass Media Campaigns:
   • India has taken aggressive steps to curb Tobacco Advertising, Promotion, and Sponsorship (TAPS) across all forms of media.
   • India became the first country to extend tobacco control regulations to digital streaming content, making a significant leap in addressing the impact of tobacco media exposure.
4. Taxation:
   • One of the least adopted MPOWER measures has been raising tobacco taxes. While India has made some progress in this area, the trend in per capita GDP required to buy cigarettes has actually decreased since 2014, meaning tobacco remains relatively affordable.
5. Tobacco-Related Deaths:
   • The tobacco epidemic is still responsible for over 7 million deaths annually, primarily from smoking-related diseases, underscoring the urgent need for stronger global and local interventions.

Tobacco Production: Global Context

1. Tobacco Species:
   • Tobacco belongs to the nightshade family and has over 60 species. The most commonly cultivated types are Nicotiana tabacum and Nicotiana rustica (Aztec tobacco).
2. Climate and Soil Requirements:
   • Tobacco plants need a frost-free period of 90-120 days for optimal growth and prefer a mean daily temperature of 20-30°C.
   • Tobacco grows best in sandy or sandy loam soils, with well-drained conditions, and requires at least 500 mm of rainfall but cannot tolerate excessive moisture.
3. Tobacco Production in India:
   • India is the world’s second-largest producer and exporter of unmanufactured tobacco, after China and Brazil.
   • The major tobacco-producing states in India include Gujarat, Andhra Pradesh, Uttar Pradesh, Karnataka, West Bengal, Telangana, and Bihar.
   • Gujarat, in particular, accounts for 45% of the nation’s tobacco production, and the Tobacco Board of India, located in Guntur (Andhra Pradesh), ensures fair prices and facilitates the promotion of tobacco exports.

Global and India-Specific Measures to Tackle the Tobacco Epidemic

1. Global Actions:
   • WHO Framework Convention on Tobacco Control (WHO FCTC): Adopted in 2003, this international treaty has been ratified by over 180 countries, including India (since 2005). It mandates comprehensive tobacco control measures and policies.
   • 3 by 35 Initiative: WHO aims to increase tobacco, alcohol, and sugary drink prices by at least 50% by 2035 to curb consumption, with an emphasis on reducing affordability.
2. India-Specific Actions:
   • Cigarettes and Other Tobacco Products Act (COTPA), 2003: Prohibits smoking in public places, bans tobacco sales to minors, and mandates health warnings on packages.
   • Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2022: The rules mandate the use of graphic health warnings on tobacco packaging to highlight the harmful effects of tobacco use.
   • National Tobacco Control Programme (NTCP): India’s national program aims to create awareness, reduce the production and supply of tobacco products, and reduce tobacco consumption.
   • Prohibition of Electronic Cigarettes Act, 2019: India banned the sale, manufacture, and import of e-cigarettes, responding to growing concerns about the health risks of vaping.

Challenges

Tobacco Industry Resistance:

1. • Despite all the measures, the tobacco industry remains a powerful force, often using political lobbying, legal challenges, and misinformation to undermine tobacco control efforts.
   • Industry interference continues to be a significant challenge in many countries, including India, where the industry sometimes circumvents regulations to maintain market dominance.
2. Need for Increased Taxation:
   • One of the most effective measures to reduce tobacco consumption is to raise taxes on tobacco products. Despite some progress, tobacco remains affordable in many countries, including India, which hinders the potential impact of taxation.
3. Public Awareness:
   • Mass media campaigns have been proven to be an effective tool in reducing tobacco consumption. India’s stringent tobacco advertisement bans in traditional and digital media have played a crucial role in spreading awareness, but greater awareness is still needed in remote areas.
4. Monitoring and Enforcement:
   • Strengthening the monitoring systems to track tobacco use and tobacco control policy implementation will be crucial in understanding the effectiveness of interventions. Additionally, enforcement of existing laws is still a challenge in some regions, particularly in rural and remote areas.

Conclusion

To successfully address the global tobacco epidemic, a multi-faceted approach is necessary, combining policy, enforcement, public awareness, and international cooperation. Measures such as increased taxation, graphic health warnings, stronger public education, and tackling tobacco industry interference can lead to significant progress. India, with its growing tobacco control measures and public health campaigns, is playing an essential role in the global fight against tobacco-related diseases

The World Trade Organization (WTO) plays a pivotal role in shaping the global trade environment by providing a multilateral platform for negotiating and enforcing trade agreements, ensuring that international commerce remains predictable, equitable, and transparent.

What is the WTO?

The WTO was established in 1995 following the Uruguay Round of negotiations (1986-94), succeeding the General Agreement on Tariffs and Trade (GATT). Its primary mandate is to promote free and fair trade across its 166 member countries, which account for 98% of global trade. India has been a WTO member since its inception in January 1995.

• Headquarters: Geneva, Switzerland
• Scope: The WTO governs trade in goods, services, and intellectual property (unlike GATT, which focused solely on goods).
• Key Agreements:
  • TRIMS (Trade-Related Investment Measures)
  • TRIPS (Trade-Related Aspects of Intellectual Property Rights)
  • AoA (Agreement on Agriculture)

WTO’s Core Functions

1. Rule-Making & Negotiation Platform:
   • The WTO provides a forum where nations can negotiate trade agreements (e.g., the Trade Facilitation Agreement, 2013). These agreements help reduce trade barriers and create a predictable and stable trading environment.
2. Trade Liberalization & Predictability:
   • It advocates for reducing tariffs and trade barriers, promoting the Most-Favored-Nation (MFN) principle, which ensures that all WTO members are treated equally in terms of trade access.
3. Transparency & Monitoring:
   • Through the Trade Policy Review Mechanism (TPRM), the WTO monitors member countries' trade policies, ensuring transparency and accountability in their implementation of agreed rules and regulations.
4. Capacity Building & Technical Assistance:
   • The WTO supports developing and least-developed countries (LDCs) through initiatives such as Aid-for-Trade, helping them integrate into the global economy.
5. Balancing Trade & Development:
   • It also attempts to align global trade with broader goals like sustainable development, food security, and climate change (e.g., addressing fisheries subsidies linked to SDG 14).
6. Preventing Protectionism & Promoting Cooperation:
   • The WTO works as a global trade referee, especially during times of crisis (e.g., during Covid-19, it monitored export restrictions on medical supplies).

Factors Limiting the WTO’s Effectiveness

Despite its foundational role, the WTO faces several challenges that are eroding its capacity to regulate global trade effectively.

1. Dispute Settlement Paralysis:
   • The WTO’s Appellate Body (responsible for resolving disputes) has been non-functional since 2019. This undermines the credibility of the dispute settlement system, with some nations now engaging in unilateral trade actions due to this paralysis.
   • The U.S. has been blocking the appointment of new judges since 2017, citing concerns over judicial activism.
2. Negotiation Deadlock:
   • The Doha Development Round (2001) aimed at addressing trade imbalances, particularly for developing countries, has stalled due to unresolved issues such as agriculture subsidies and market access.
3. Rise of Regional Trade Agreements:
   • Increasing Free Trade Agreements (FTAs) and regional trade blocs like EU, ASEAN, and the Regional Comprehensive Economic Partnership (RCEP) have fragmented global trade, bypassing the multilateral approach advocated by the WTO.
4. Protectionism:
   • The rise of protectionism, especially through the use of security exceptions (e.g., GATT Article XXI) to impose tariffs, has undermined the credibility of WTO rules. Examples include the US-China trade war and other unilateral tariff measures.
5. New Trade Dimensions:
   • The WTO has struggled to adapt to emerging trade issues, such as digital trade, e-commerce, climate-linked trade barriers, and green technologies. For instance, the moratorium on e-commerce customs duties (since 1998) remains in place, but no permanent rules have been agreed upon.
6. Development Disparities:
   • The Special and Differential Treatment (S&DT) for developing countries allows flexibility in trade commitments, but the lack of a clear definition of "developing country" has led to disputes, with some advanced economies (e.g., China) self-designating as developing nations to access special benefits.

Crucial Reforms for Strengthening the WTO

To adapt to the evolving trade landscape, the WTO must undergo several reforms:

1. Revitalize Rule-Based Dispute Resolution:
   • Revive the Appellate Body by addressing U.S. concerns, setting strict timelines, and respecting domestic policy space for countries while ensuring that disputes are resolved efficiently.
2. Rebuilding Trust through Transparency:
   • Strengthen the Trade Policy Review Mechanism (TPRM) to ensure that national policies do not have negative spillover effects on other nations. Encouraging countries to share data and conduct joint assessments could improve global cooperation.
3. Institutionalize Reform Mechanisms:
   • Create a permanent WTO Reform Council with rotating leadership to ensure that reforms are sustained beyond individual ministerial meetings.
4. Toward Equitable Globalization:
   • The WTO needs to evolve to become a guardian of equitable globalization, incorporating rules on digital trade, cross-border data flows, industrial policies, and green subsidies to ensure that global trade is inclusive and sustainable.

India's Role in Strengthening Multilateral Trade Governance

India, as a major emerging economy, has a significant role to play in shaping the future of multilateral trade governance:

1. Champion of the Global South:
   • India can act as a voice for developing countries in WTO negotiations, ensuring that concerns related to food security, subsidies, and market access are prioritized, particularly for least-developed countries.
2. Balancing Protectionism and Liberalization:
   • India can advocate for calibrated liberalization that respects developmental needs while resisting unilateral tariff hikes and protectionist tendencies from major economies.
3. Promoter of Sustainable and Inclusive Trade:
   • India can push for linking trade to sustainable development goals (SDGs), advocating for climate-just frameworks, resisting green protectionism (e.g., EU Carbon Border Adjustment Mechanism (CBAM)), and showcasing initiatives like Mission LiFE (Lifestyle for Environment) and renewable energy projects.
4. Showcasing as a Model Economy:
   • With its growing manufacturing capacity (through PLI schemes), robust digital economy (via UPI), and services sector strength, India can position itself as a model of balancing development with global integration.

What is Multilateralism?

Multilateralism is a system where three or more countries cooperate to address global issues, governed by shared rules, norms, and institutions. The key features include:

• Rule-based Order: Agreements create predictable frameworks (e.g., WTO rules).
• Inclusivity: Involves countries at various stages of development.
• Shared Responsibility: Countries share the burden of solving global issues like climate change, pandemics, and terrorism.
• Global Public Goods: Ensures cooperation on issues that transcend national borders (e.g., cybersecurity, environment).

Examples of Multilateralism:

• Political & Security: United Nations (UN)
• Economic: WTO, IMF, World Bank
• Climate & Environment: Paris Agreement

Conclusion

The WTO has long been the cornerstone of the global trade system, fostering cooperation, stability, and fairness. However, the changing dynamics of global trade—marked by the rise of regional trade agreements, protectionist policies, and the challenges of digital trade—have exposed cracks in its structure.

To remain relevant, the WTO must undergo reforms that address the evolving needs of modern trade, including resolving the dispute settlement paralysis, improving transparency, and expanding its focus to include new trade dimensions like digital commerce and green subsidies