BRICS vs USA: Trade War Looms | India's New Job Scheme & Nipah Alert | Current Affairs 7 July 2025

Daily Current Affairs Analysis: 7th July 2025

A UPSC Civil Services Examination Perspective

Presented by Sunlo UPSC YouTube channel

Table of Contents

A. Motivation for the Day

"Man needs his difficulties because they are necessary to enjoy success."

— Dr. A.P.J. Abdul Kalam

The journey of a UPSC aspirant is a marathon defined by persistent effort and the navigation of numerous challenges. Dr. Kalam's profound words serve as a powerful reminder that the daily struggles—the long hours of study, the complexity of the syllabus, the moments of self-doubt—are not obstacles to be lamented but crucibles for forging strength. Each difficult concept mastered, each challenging answer written, and each day of disciplined study builds the intellectual and emotional resilience required not only to clear this examination but to excel in a demanding career of public service. These difficulties are the very process through which an aspirant transforms into a capable and determined administrator, making the eventual success all the more meaningful and deserved.

B. GS Paper 2: Polity, Governance & International Relations

1. 17th BRICS Summit: A Renewed Push for a Multipolar World

Context

The 17th BRICS Summit, held in Rio de Janeiro, Brazil, on July 6-7, 2025, convened at a critical juncture in global affairs. The summit's backdrop was one of escalating geopolitical tensions, the protracted war in Ukraine, a fragile ceasefire in the Middle East, and a global economic landscape fraught with uncertainty and protectionist tendencies. The bloc, now expanded to include new members like Indonesia and Iran, sought to project a unified voice for emerging economies. The summit's dynamics were also shaped by the notable absence of Chinese President Xi Jinping for the first time since 2012 and the virtual participation of Russian President Vladimir Putin, who faces an international arrest warrant.

In-depth analysis of the Rio de Janeiro Declaration

The summit culminated in the "Rio de Janeiro Declaration: Strengthening Global South Cooperation for More Inclusive and Sustainable Governance," a comprehensive document outlining the bloc's collective stance on a range of global issues.

  • Reforming Global Governance: A central theme was the urgent need to reform the existing architecture of international relations. The declaration explicitly called for comprehensive reform of the UN, including its Security Council, and demanded reforms in the WTO and Bretton Woods institutions (IMF and World Bank) to enhance the voice of developing countries.
  • Economic and Trade Stance: The declaration expressed "serious concerns" over unilateral coercive measures, such as economic sanctions, that are inconsistent with WTO rules. This was a clear critique of the United States' recent trade policies, warning that such measures threaten to disrupt global trade.
  • Peace, Security, and Counter-Terrorism: The declaration addressed major global conflicts, condemning military attacks against Iran and expressing "grave concern" for the humanitarian situation in Gaza, calling for an immediate, permanent ceasefire. It also reiterated the bloc's strong condemnation of terrorism in all its forms.
  • Sustainable Development and Emerging Technologies: The leaders reaffirmed their commitment to the Paris Agreement, stressing the importance of climate finance and technology transfer. Recognizing the potential of AI, the declaration called for an inclusive global AI governance framework.

India's role and PM Modi's call for reforming global governance

Prime Minister Narendra Modi played a pivotal role, forcefully articulating India's position. He reiterated India's commitment to enhancing the voice of the Global South and called for an end to "double standards" in global affairs, particularly in development, climate finance, and technology access. On security, he cited the April 2025 Pahalgam terror attack as an example of an onslaught on the entire international community, reinforcing the need for a united front against terror.

Deep Dive: The New Development Bank (NDB) and Contingent Reserve Arrangement (CRA)

The BRICS financial architecture represents the bloc's ambition to create alternatives to the Western-dominated financial system.

  • New Development Bank (NDB): Established to mobilize resources for infrastructure and sustainable development, the NDB has approved USD 39 billion for 120 projects by early 2025. In India, it has financed key projects like the Delhi-Meerut RRTS and the Rajasthan Water Sector Restructuring Project.
  • Contingent Reserve Arrangement (CRA): With a total committed capital of USD 100 billion, the CRA is a financial safety net for members facing short-term balance of payments pressures. It offers an alternative source of emergency funding without the policy conditionalities often associated with the IMF.

Significance for India and the Global South

The summit's outcomes hold considerable significance. BRICS is navigating a complex path, balancing its critique of the existing global order with pragmatic cooperation. It is not a monolithic anti-Western alliance but a pragmatic "coalition of interests" seeking a truly multipolar world. Understanding the internal divergences, such as Iran's reservations on the two-state solution, is crucial to avoid a simplistic "BRICS vs. West" narrative. The consistent emphasis on the "Global South" is a key strategic positioning, aiming to enhance the bloc's legitimacy and influence on the world stage.

2. Geopolitical Developments and Their Implications for India

Analysis: Escalating US-EU Trade Tensions and the risk of a new trade war

The transatlantic trade relationship is on a knife's edge, with a looming deadline for the US to potentially re-impose high tariffs on EU goods. This stems from the US "America First" policy. Failure to secure a deal could trigger a full-blown trade war. For India, a US-EU trade war could disrupt global supply chains and heighten market volatility, though it could also create market opportunities if India can navigate the geopolitical risks with an agile trade policy.

Update: Israel-Hamas ceasefire negotiations in Doha

Indirect negotiations in Doha, mediated by Qatar and Egypt, remain challenging. Hamas demands a guaranteed pathway to a permanent end to the war and a complete Israeli withdrawal, which remains the primary sticking point. The ongoing conflict impacts India's interests in energy security, maritime trade, and the welfare of its diaspora in the Middle East.

Strategic Shift: The UK's resumption of diplomatic ties with Syria

In a significant reversal, the UK has restored diplomatic relations with Syria after a 13-year hiatus, following the ouster of President Bashar al-Assad. This shift, coordinated with the US lifting some sanctions, could realign power dynamics in the Levant. For India, which maintained its embassy in Damascus, this validates its policy of continuous engagement and presents new opportunities for cooperation and participation in Syria's reconstruction.

C. GS Paper 3: Indian Economy, Environment, Science & Tech

1. Employment-Linked Incentive (ELI) Scheme: A New Strategy for Job Creation

Context: The state of employment in India

The Union Cabinet approved the Employment-Linked Incentive (ELI) scheme with a ₹99,446 crore outlay. This is a response to the challenge of formal employment generation, highlighted by PLFS data showing a stagnant All-India Labour Force Participation Rate (LFPR) at 56.2%. The scheme aims to boost jobs, particularly in manufacturing.

Detailed Provisions of the ELI Scheme

The ELI scheme, operational from August 1, 2025, to July 31, 2027, is implemented by the EPFO.

Beneficiary Category Incentive Details Eligibility & Key Conditions
Part A: First-Time Employees A one-time incentive equal to one month's wage, capped at ₹15,000. Must be a new EPFO-enrolled employee with a monthly salary up to ₹1 lakh. Paid in two installments after 6 and 12 months.
Part B: Employers (General Sector) Up to ₹3,000 per month for each additional employee for two years. EPFO-registered. Must hire a minimum number of new employees and retain them for at least six months.
Part B: Employers (Manufacturing Sector) Same as general sector, but incentive period is extended to the third and fourth years. Same conditions, with a longer incentive period to specifically boost manufacturing employment.

Critical Examination: Potential benefits, challenges, and expert criticisms

The government projects the creation of over 3.5 crore jobs. However, economists like Professor Santosh Mehrotra criticize it as a supply-side intervention that misdiagnoses the problem. They argue that the core issue is not the high cost of labour but weak aggregate demand. Without a revival in demand, incentives are unlikely to create sustainable employment. Critics also point to the perceived failure of the PLI scheme to meet its employment goals and question the ELI scheme's job creation targets as unrealistic.

2. The Inequality Conundrum: Decoding the World Bank Report

The Controversy: Government claims vs. opposition critiques

A debate erupted after a government press release cited a World Bank report to claim India is the world's fourth most equal country, based on an improved consumption-based Gini Index. The opposition contested this, calling it a misleading, "apples-to-oranges" comparison.

Understanding the Metrics: Consumption vs. Income Gini Index

  • Consumption-based Gini Index: Measures inequality based on household spending. It typically shows lower inequality as even the wealthy have limits on consumption. This is the metric India traditionally uses.
  • Income-based Gini Index: Measures inequality based on pre-tax income. It is the international standard and almost always reveals higher inequality.

The opposition's charge is that comparing India's consumption Gini to the income Gini of other countries is fundamentally flawed. They argue that on a like-for-like basis (income Gini), India would rank as one of the more unequal societies.

Importance of data integrity for policy formulation

This debate highlights the politicization of data and the critical importance of statistical integrity. Selective interpretation can erode public trust and hinder evidence-based policymaking. It underscores a potential paradox in India's growth story: the simultaneous reduction of absolute poverty and a possible increase in relative inequality.

3. 'Jai Anusandhan': Catalyzing Agricultural Innovation

The ₹1 Lakh Crore RDI Fund for sunrise sectors

The Union Cabinet approved a ₹1 lakh crore Research, Development, and Innovation (RDI) scheme to give substance to the call for "Jai Anusandhan". It will provide long-term, low-interest financing to the private sector to de-risk investment in R&D in sunrise sectors like clean energy, AI, biotech, and digital agriculture.

The Regulatory Maze of Genetically Modified (GM) Crops in India

While the government promotes high-tech innovation, agricultural biotechnology, particularly GM crops, remains in a regulatory stalemate. As of 2025, only Bt cotton is commercially cultivated. Bt Brinjal remains under a moratorium, and GM Mustard's commercialization is stalled. The debate is polarizing, with proponents citing food security and opponents raising concerns about biosafety, environmental impact, and economic sovereignty of farmers.

Balancing innovation, food security, and biosafety

The juxtaposition of the 'Jai Anusandhan' fund and the GM crop paralysis reveals a policy contradiction. The government aims to catalyze innovation but fails to create a clear, predictable, science-based regulatory pathway for a key technology. This highlights the challenge of balancing technological progress with socio-economic and environmental concerns.

4. A Milestone in Self-Reliance: Indigenous 700 MW Nuclear Reactors

Operationalization of Kakrapar Atomic Power Station (KAPS-3 & KAPS-4)

In a landmark achievement, the Atomic Energy Regulatory Board (AERB) granted operational licences to two 700 MW Pressurized Heavy Water Reactors (PHWRs) at Kakrapar, Gujarat. These are the first indigenously designed and built reactors of this scale, a major step for Aatmanirbhar Bharat in a critical technology sector.

Significance of Pressurized Heavy Water Reactors (PHWRs)

PHWRs are the cornerstone of India's nuclear program. They use natural uranium as fuel and heavy water as a moderator, avoiding the need for expensive uranium enrichment. This success has prompted NPCIL to plan ten more 700 MW PHWRs in "fleet mode" across the country.

Relevance to India's Three-Stage Nuclear Program

This is a major victory for Stage 1 of the program. However, significant delays in Stage 2 (the Prototype Fast Breeder Reactor) mean that the full realization of the three-stage program and large-scale use of thorium remain a distant prospect. This achievement highlights the need for a robust, independent, and vigilant safety and security culture as India expands its nuclear enterprise.

D. GS Paper 2: Health

1. Nipah Virus Outbreak in Kerala: A Public Health Emergency

Current Situation and Government Response

Kerala is on high alert after fresh Nipah cases were confirmed in Malappuram and Palakkad districts. Authorities have activated a swift public health response, including intensive contact tracing, establishing isolation wards, and declaring containment zones. The National Centre for Disease Control (NCDC) is closely monitoring the situation.

Understanding the Nipah Virus: Transmission, Symptoms, and Prevention

  • Transmission: Nipah (NiV) is a zoonotic virus. Its natural reservoir is fruit bats. It spreads to humans via contact with infected bats, contaminated fruit, or through direct human-to-human contact.
  • Symptoms: Range from asymptomatic to fatal encephalitis (brain inflammation). Initial symptoms include fever, headache, and muscle pain.
  • Prevention: There is no specific drug or vaccine. Prevention is key and involves avoiding exposure to sick animals, not consuming potentially contaminated food, and practicing stringent infection control.

The One Health Approach in managing zoonotic diseases

Recurring Nipah outbreaks underscore the need for a 'One Health' approach—an integrated strategy recognizing that human health is linked to animal health and the environment. This requires collaborative, long-term surveillance of animal populations and research into ecological drivers of disease, moving beyond a purely reactive human public health response.

E. Prelims Snippets: Quick Facts for 7th July 2025

  • Persons in News: Sanjay Bhandari, a UK-based arms dealer, has been declared a fugitive economic offender.
  • Initiatives & Studies: The BHARAT study, launched by IISc Bengaluru, aims to create India's first comprehensive database on ageing.
  • Science & Tech: Ham radio was used by astronaut Shubhanshu Shukla to interact with students from the ISS.
  • Places in News: Bukkapatna Chinkara Wildlife Sanctuary (Karnataka) was in the news for clearing encroachments. It protects the Indian Gazelle. Edgbaston (UK) was the venue for India's historic Test match win.
  • Terms in News: Girmitiyas refers to Indian indentured labourers taken to British colonies in the 19th century.
  • Health: July is Sarcoma Cancer Awareness Month. Sarcomas are rare cancers of bones and soft tissues.
  • Appointments: Aditya Mangla has been appointed CEO of Zomato's food delivery division.

F. Mains Practice Question

Question: The simultaneous launch of the 'Jai Anusandhan' RDI fund and the continued regulatory impasse on Genetically Modified (GM) crops reveals a fundamental contradiction in India's approach to agricultural innovation. Critically analyze this statement, discussing the challenges of balancing technological advancement with socio-economic and environmental concerns in the agricultural sector. (250 words, 15 marks)

G. Interactive Flashcards for Revision

Click on a card to flip it and reveal the answer!

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