DAILY NEWS ANALYSIS

The government has identified seven strategic and frontier sectors to scale up manufacturing and reduce import dependencies.

The focus is on strengthening high-tech manufacturing, critical minerals, chemical clusters, biopharma, semiconductors and container manufacturing.

• India Semiconductor Mission: Supports semiconductor fabrication, display manufacturing, chip design and semiconductor ecosystem development.
• Biologics: Medical products derived from living organisms; biosimilars are near-equivalent versions of approved biologics.
• Critical Minerals: Minerals essential for strategic sectors such as EVs, defence, electronics and renewable energy.
• Plug-and-Play Model: Provides ready infrastructure to industries, reducing setup time and construction delays.

MSMEs are recognised as the “engine of growth” and are being supported through a three-pronged strategy focused on equity, liquidity and professional assistance.

The budget also places emphasis on strengthening the services sector, creative economy and employment-oriented growth.

• TReDS: Enables MSMEs to receive early payment against invoices through invoice discounting.
• GeM: Government e-Marketplace is India’s public procurement portal.
• AVGC: Animation, Visual Effects, Gaming and Comics sector is part of the creative economy.
• ICAI/ICSI: Professional bodies linked with chartered accountancy and company secretaries.

The budget focuses on increasing farmer incomes through high-value crops, AI-driven advisory and rural enterprise development.

The emphasis is on productivity enhancement, crop diversification, women-led rural enterprises and integrated fisheries development.

• AgriStack: Digital public infrastructure for agriculture, including farmer data and digital advisory services.
• ICAR: Indian Council of Agricultural Research is the apex body for agricultural research and education in India.
• Lakhpati Didi: A livelihood initiative aimed at enabling women SHG members to earn at least Rs. 1 lakh annually.
• Amrit Sarovar: Linked with water conservation through rejuvenation and creation of water bodies.

The “Reform Express” vision focuses on modernising India’s physical and digital infrastructure through high-speed connectivity, waterways and urban economic development.

The strategy aims to strengthen logistics efficiency, regional growth, multimodal transport and sustainable urbanisation.

• National Waterways: Declared under the National Waterways Act, 2016.
• NW-5: Located in Odisha and linked with the Brahmani river system and East Coast Canal.
• VGF: Viability Gap Funding supports economically justified but financially less viable infrastructure projects.
• Coastal Shipping: Reduces logistics cost, road congestion and carbon emissions.

Human capital development remains central to the “Second Kartavya”, with focus on health, education, care services and inclusion.

The social welfare push aims to strengthen healthcare capacity, support elderly care, promote medical value tourism and improve women’s participation in STEM education.

• AHPs: Allied Health Professionals include healthcare workers such as technicians, therapists and diagnostic support staff.
• AYUSH: Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy.
• Medical Value Tourism: Combines healthcare services with travel, wellness and traditional medicine.
• STEM: Science, Technology, Engineering and Mathematics, important for women’s participation in high-skill sectors.

Part B of the Budget speech introduced the Income Tax Act, 2025, replacing the older Income-tax Act, 1961 with effect from 1 April 2026.

The reforms focus on tax simplification, digital compliance, rationalisation of tax rates and customs duty reductions to support investment, trade and economic efficiency.

• Income Tax Act, 2025: Replaces the older Income-tax Act, 1961 and aims to simplify direct tax law.
• MAT: Minimum Alternate Tax ensures that companies with book profits pay a minimum amount of tax.
• STT: Securities Transaction Tax is levied on transactions in securities such as shares, futures and options.
• LRS: Liberalised Remittance Scheme allows resident individuals to remit money abroad within prescribed limits.
• EEZ: Exclusive Economic Zone extends up to 200 nautical miles from the baseline of the coast.

Aligning with India’s Net Zero goals, the budget introduces new technologies and incentives to decarbonise industry.

The focus is on carbon capture, renewable fuels, battery storage and solar-linked inputs to strengthen clean energy transition.

• Net Zero Target: India has announced a target of achieving net-zero emissions by 2070.
• CCUS: Carbon Capture, Utilization and Storage helps capture carbon dioxide from industrial sources and either store or reuse it.
• Biogas: A renewable fuel produced from organic waste through anaerobic digestion.
• Battery Energy Storage Systems: Important for grid stability and integration of renewable energy like solar and wind.

The budget focuses on strengthening fiscal federalism, financial sector reforms, municipal financing and trade facilitation.

It reflects a structured Kartavya-driven governance approach, positioning Yuva Shakti as a major driver of India’s long-term development vision.

• Finance Commission: Constitutional body under Article 280 that recommends tax devolution between Centre and States.
• Vertical Devolution: Share of central taxes transferred from the Union to States.
• Municipal Bonds: Debt instruments issued by urban local bodies to finance civic infrastructure.
• Viksit Bharat: India’s long-term development goal for 2047.

On 22nd January 2026, the U.S. President formally launched the ‘Board of Peace’.

The initiative began as a Gaza-focused reconstruction and ceasefire body, but its mandate has expanded toward global conflict resolution and stability promotion.

• United Nations: Founded in 1945 after World War II to maintain international peace and security.
• UN Security Council: It has 15 members: 5 permanent and 10 non-permanent members.
• India’s Observer Status: Reflects strategic autonomy and cautious diplomatic balancing.
• Legitimacy Concern: Any peace body outside the UN framework raises issues of legitimacy, accountability, veto power and international law.

On 3rd January 2026, the U.S. carried out a military operation in Venezuela and captured President Nicolás Maduro.

The U.S. accused him of working with drug cartels and claimed that Venezuela posed a security threat, making the action controversial under sovereignty and international law principles.

The incident raises major questions about the legality of unilateral military action, regime change, extradition processes and the limits of self-defence claims.

It also connects with the wider debate over whether powerful states can use security claims to interfere in another country’s sovereignty and control over natural resources.

• Article 2(4): Prohibits threat or use of force against the territorial integrity or political independence of any state.
• Article 51: Allows self-defence only if an armed attack occurs, unless authorised by the UN Security Council.
• Venezuela: Globally significant because of its large oil reserves.
• Core Linkages: State sovereignty, intervention, regime change, extradition law and natural resource sovereignty.

On 22nd May 2025, the United Kingdom agreed to transfer sovereignty of the Chagos Islands to Mauritius.

The agreement ends decades of British control over the Indian Ocean archipelago, while retaining strategic military arrangements over Diego Garcia.

In February 2026, the North Atlantic Treaty Organization (NATO) launched the Arctic Sentry Mission.

The mission aims to strengthen NATO’s military and surveillance presence in the Arctic amid rising security concerns, increased Russian activity and debates around Greenland.

• Diego Garcia: Hosts a major US-UK military base and is strategically important in the Indian Ocean.
• Chagos Dispute: Linked with decolonisation, maritime sovereignty, military bases and strategic island geopolitics.
• Mauritius: An island nation in the south-west Indian Ocean.
• Arctic Importance: Rising due to melting ice, new shipping routes, resource competition and military positioning.
• NATO: Founded in 1949 and headquartered in Brussels, Belgium.

On 19th July 2025, China began constructing a mega dam on the Yarlung Tsangpo in Medog county near Arunachal Pradesh.

With a planned capacity of 60,000 MW, the project is expected to become the world’s largest hydroelectric dam, surpassing the Three Gorges Dam.

• Origin: The Brahmaputra originates in Tibet as the Yarlung Tsangpo.
• Riparian Position: China is the upper riparian and India is the lower riparian in this river system.
• Brahmaputra Basin: Important for water security, agriculture, hydropower, biodiversity and floodplain ecology.
• Strategic Relevance: Connected with India-China relations, transboundary river governance, hydro-politics and environmental security.

On 4th May 2025, Nicaragua formally withdrew from UNESCO.

The withdrawal came after UNESCO announced that the 2025 Guillermo Cano World Press Freedom Prize would be awarded to La Prensa, a prominent Nicaraguan newspaper critical of President Ortega.

• UNESCO Mandate: Works in education, science, culture, communication, heritage protection and press freedom advocacy.
• World Press Freedom Prize: Highlights freedom of expression and media independence.
• UN Agency Withdrawal: Often reflects political disagreement with global norms or institutional decisions.
• Exam Link: Revise UNESCO World Heritage Sites and India’s cultural heritage listings.
• Relevance: Important for global governance, press freedom, democracy and international organisations.

On 26th December 2025, Israel became the second United Nations member state to officially recognise the Republic of Somaliland as an independent and sovereign state.

The recognition has renewed debates over statehood, sovereignty, territorial integrity and international recognition in the Horn of Africa.

Somaliland is a self-declared republic located in the Horn of Africa, although it is internationally recognised as part of Somalia.

Due to prolonged instability in southern Somalia, Somaliland has consistently sought formal international recognition as an independent state.

• UN Status: Somaliland is not a UN member despite functioning as a de facto state.
• Core Issue: Important for state recognition, sovereignty, territorial integrity and secession debates.
• Horn of Africa: Strategically located near the Red Sea, Gulf of Aden and major maritime routes.
• Recognition Principle: Recognition by some states does not automatically create UN membership.

On 21st May 2025, China and Pakistan formally agreed to expand the China-Pakistan Economic Corridor (CPEC) into Afghanistan.

The move marks a major strategic development in the region and has sparked strong opposition from India due to sovereignty, security and connectivity concerns.

The CPEC extension strengthens the China-Pakistan-Afghanistan axis and may reduce India’s strategic space in Afghanistan and Central Asia.

It also directly connects with India’s objections to CPEC through PoK, regional terrorism concerns and competition between Chinese-led corridors and Indian-backed connectivity routes.

• CPEC: A flagship corridor under China’s Belt and Road Initiative.
• India’s Objection: India opposes CPEC because it passes through Pakistan-occupied Kashmir.
• Chabahar Port: Strategically important for India’s access to Afghanistan and Central Asia.
• INSTC: Links India with Iran, Central Asia, Russia and Europe through a multi-modal route.
• UPSC Relevance: Important for India-China-Pakistan relations, Afghanistan policy, regional connectivity and sovereignty concerns.

On 21st May 2025, China and Pakistan formally agreed to expand the China-Pakistan Economic Corridor (CPEC) into Afghanistan.

The move marks a major strategic development in the region and has sparked strong opposition from India due to sovereignty, security and connectivity concerns.

The CPEC extension strengthens the China-Pakistan-Afghanistan axis and may reduce India’s strategic space in Afghanistan and Central Asia.

It also directly connects with India’s objections to CPEC through PoK, regional terrorism concerns and competition between Chinese-led corridors and Indian-backed connectivity routes.

• CPEC: A flagship corridor under China’s Belt and Road Initiative.
• India’s Objection: India opposes CPEC because it passes through Pakistan-occupied Kashmir.
• Chabahar Port: Strategically important for India’s access to Afghanistan and Central Asia.
• INSTC: Links India with Iran, Central Asia, Russia and Europe through a multi-modal route.
• UPSC Relevance: Important for India-China-Pakistan relations, Afghanistan policy, regional connectivity and sovereignty concerns.

On 3rd October 2025, the global banking industry’s Net Zero Banking Alliance (NZBA) announced that it would cease operations and officially dissolve.

The shutdown followed high-profile exits by major US banks and rising political pressure amid weakening global climate commitments.

The closure reflects growing tension between climate finance commitments and domestic political and energy priorities.

It also highlights how fossil-fuel politics, deregulation demands and changing geopolitical priorities can affect global sustainability initiatives.

• Net Zero: Balancing greenhouse gas emissions with removals.
• UNEP FI: Works with financial institutions on sustainable finance initiatives.
• Climate Finance Alliances: Aim to shift banking and investment flows toward low-carbon sectors.
• Core Tension: Reflects conflict between climate commitments, fossil-fuel politics and domestic political economy.

On 4th December 2025, the US President hosted the signing of the Washington Accords for Peace and Prosperity between the Democratic Republic of the Congo (DRC) and the Republic of Rwanda in Washington, DC.

The accords seek to reduce long-standing conflict, promote economic cooperation and establish the foundation for peace in Africa’s Great Lakes region.

Eastern DRC is one of the world’s most resource-rich conflict zones and contains strategic minerals essential for electronics and green technologies.

Long-standing instability in the region has contributed to armed conflict, humanitarian displacement and regional geopolitical competition in Central Africa.

• Great Lakes Region: Includes African countries around lakes such as Victoria, Tanganyika and Kivu.
• Eastern DRC: Rich in strategic minerals such as cobalt, coltan and copper.
• M23: A major rebel group active in eastern Democratic Republic of the Congo.
• Conflict Drivers: Linked with resource control, cross-border militias, refugee flows and regional security tensions.

In January 2026, the United States President signed an executive order withdrawing the US from 66 international organisations, agencies and commissions.

The decision triggered strong global reactions and raised concerns about the future of multilateral cooperation.

No. The United States will continue to remain part of the United Nations system, including its position on the UN Security Council.

It will also continue to fund agencies such as the World Food Programme and support bodies such as the International Atomic Energy Agency.

On 8th August 2025, the third United Nations Conference on Landlocked Developing Countries concluded in Awaza, Turkmenistan.

The conference adopted the Awaza Political Declaration and endorsed the Awaza Programme of Action (2024–2034) to accelerate sustainable development for the world’s 32 landlocked nations.

• Multilateralism: Cooperation among multiple countries through rules-based institutions.
• UN Security Council: Has 5 permanent and 10 non-permanent members.
• IAEA: Headquartered in Vienna, Austria.
• UNICEF: Works for children’s welfare, health, nutrition, education and protection.