US Tariffs, NISAR Mission, RTI/DPDP Act I UPSC News 31 July 2025
US Tariffs, NISAR Mission, RTI/DPDP Act | UPSC News 31 July 2025
Table of Contents
GS Paper II: International Relations & Global Affairs
The US Tariff Challenge: A Test of India's Strategic Autonomy
In a significant geopolitical and economic development, the United States announced a sweeping 25% tariff on all goods from India, scheduled to take effect on August 1, 2025. This move directly tests India's policy of strategic autonomy.
The U.S. rationale is twofold. Economically, it targets India's high tariffs and a trade imbalance of $45.8 billion in India's favor. Geopolitically, an additional "penalty" tax is explicitly linked to India's strategic ties with Russia, particularly its purchase of energy and military equipment, and its membership in the BRICS group. This represents a clear weaponization of trade policy to influence India's sovereign foreign policy choices.
India's response has been carefully calibrated. Publicly, Commerce and Industry Minister Piyush Goyal robustly defended India's economic performance. Pragmatically, the government is examining the impact and has kept diplomatic channels open, emphasizing a commitment to a "reciprocally advantageous trade agreement".
Economic Fallout Analysis
Economists predict a potential downside risk of 20 to 30 basis points (0.2% to 0.3%) to India's GDP growth for FY 2025-26. Key sectors with high export exposure to the U.S. are most vulnerable:
- Pharmaceuticals
- Textiles and Apparel
- Marine Products (especially shrimp)
- Gems and Jewellery
- Automobiles and Leather
| Institution/Expert | Projected GDP Impact (FY26) | Key Sectors at Risk | Key Remarks |
|---|---|---|---|
| Barclays | Could shave off 30 basis points. | General Exports | Relatively closed economy will cushion the blow. |
| ICRA | Potential downgrade to 6.2% growth. | General Exports | Move is "harsher than what we had anticipated." |
| Elara Capital | Downside of 20 basis points. | Pharmaceuticals, General Exports | Puts India at a disadvantage vs. peers like Vietnam. |
| Ashok Gulati | Significant impact on trade. | Seafood (Shrimps), Textiles | Ecuador stands to benefit from shrimp tariffs. |
Strengthening Strategic Partnerships: 'Act East' and West Asia
Amidst the US tariff challenge, India continued to strengthen other partnerships, showcasing proactive diversification. The upcoming State Visit of the President of the Philippines, H.E. Ferdinand R. Marcos Jr., from August 4-8, 2025, coincides with the 75th anniversary of diplomatic relations and is a key step in reinforcing the 'Act East' Policy. Concurrently, the second India-UAE Defence Industry Partnership Seminar in New Delhi focused on co-development in high-tech areas like unmanned systems, AI, and cyber defence, deepening ties in West Asia.
Diplomatic Victory: UN Report on Cross-Border Terrorism
In a major diplomatic win, the 36th report of the UN Security Council's 1267 Sanctions Committee Monitoring Team explicitly named the Pakistan-based terror group 'The Resistance Front' (TRF) and linked it to Lashkar-e-Tayyiba (LeT). The report, referencing the Pahalgam terror attack, noted that member states assert TRF is "synonymous with LeT". This vindicates India's long-standing position on Pakistan's use of terror proxies and was achieved despite Pakistan's presence on the UNSC.
India's Position on the Israel-Palestine Conflict
The Indian government reiterated its long-held policy on the Israel-Palestine conflict, stating its support for a "negotiated two-state solution" leading to a "sovereign, independent and viable State of Palestine within secure and recognised borders, living side by side in peace with Israel". This reaffirmation comes as several Western nations move towards recognizing a Palestinian state, and it allows India to balance its historic solidarity with Palestine and its modern strategic partnership with Israel.
GS Paper III: Indian Economy
Decoding the Banking Laws (Amendment) Act, 2025
Key provisions of the Banking Laws (Amendment) Act, 2025, will become effective from August 1, 2025. The Act aims to improve governance, enhance depositor protection, and de-risk the banking sector. Key changes include:
- Redefining 'Substantial Interest': The threshold for restricting loans to entities where bank directors have an interest is raised from ₹5 lakh to a more realistic ₹2 crore.
- Aligning Cooperative Bank Director Tenure: The maximum tenure for directors is increased from 8 to 10 years, in line with the 97th Constitutional Amendment.
- Transfer of Unclaimed Assets: Public Sector Banks (PSBs) can now transfer unclaimed shares and dividends to the Investor Education and Protection Fund (IEPF).
- Auditor Remuneration: PSBs are empowered to offer market-competitive pay to attract high-quality statutory auditors.
New Global Standards for Economic Data: The System of National Accounts (SNA)
The IMF has highlighted the adoption of a new, updated System of National Accounts (SNA), the first major overhaul since 2008. The new SNA aims to make economic data more relevant by:
- Capturing the Digital Economy: Providing frameworks to measure AI, cloud computing, and digital platforms.
- Measuring Crypto Assets: Classifying certain crypto assets to reflect them in national wealth calculations.
- Reflecting Sustainability: Giving greater visibility to Net Domestic Product (NDP), which accounts for the depletion of natural resources.
- Understanding Global Value Chains: Offering better ways to capture income and production generated by multinational enterprises (MNEs).
Financial Governance and Investor Protection
Two key events underscored regulatory focus. First, the Income Tax Department conducted a survey on brokers linked to the U.S. firm Jane Street as part of a tax evasion probe. Second, the Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs, launched the "Saksham Niveshak" campaign to help investors reclaim unclaimed dividends and shares.
GS Paper II: Polity, Governance, and Social Justice
Debates on Systemic Reforms: Policing and Legal Aid
Editorials highlighted deep-rooted issues in India's justice delivery system. Policing reform is needed to move away from coercive methods towards evidence-based investigation, with proposals including ratifying the UN Convention Against Torture and adopting the non-coercive PEACE Model of interrogation. Separately, the legal aid system suffers from chronic underfunding (less than 1% of the justice budget), low per capita spending (₹6 avg), and a declining number of poorly compensated Para-Legal Volunteers (PLVs).
The RTI Act in Focus: A Battle for Transparency
Activists and press bodies are protesting the "dilution" of the Right to Information (RTI) Act, 2005, through the Digital Personal Data Protection (DPDP) Act, 2023. The controversy centers on the amendment to Section 8(1)(j) of the RTI Act, which has removed the crucial "public interest" override for disclosing personal information. Critics argue this creates a blanket exemption, shielding public officials from scrutiny and undermining the accountability framework established by the RTI.
Landmark Judicial and Legal Developments
- Malegaon Blast Case Verdict: After a 17-year trial, a special NIA court acquitted all seven accused, including Pragya Singh Thakur and Lt. Col. Prasad Purohit, in the 2008 Malegaon blast case, citing the prosecution's failure to prove its case. This raises questions about investigation quality.
- Supreme Court to Define Status of Rohingyas: The SC will hear arguments on whether Rohingyas in India should be treated as 'refugees' or 'illegal immigrants'. The verdict will be crucial as India is not a signatory to the 1951 UN Refugee Convention.
Federalism and Governance in Action
- Extension of President's Rule in Manipur: The Lok Sabha approved a six-month extension of President's Rule (Article 356) in Manipur, citing an improved law and order situation, a claim contested by the opposition.
- Maharashtra Reverses EWS Quota Policy: The state government withdrew the 10% EWS quota in private medical colleges for the current year, stating it would apply only if seat numbers are increased to avoid impacting general category students.
GS Paper III: Science, Technology, Environment & Disaster Management
NISAR Mission: A New Eye on Earth
In a landmark achievement, ISRO successfully launched the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite aboard its GSLV-F16 rocket into a Sun-synchronous polar orbit. This $1.5 billion joint mission is a testament to the India-U.S. strategic partnership.
- Technical Capabilities: It is the first satellite to use a dual-frequency radar system (L-band from NASA and S-band from ISRO), allowing for all-weather, day-and-night imaging of Earth with centimeter-level precision.
- Scientific Objectives: The mission will monitor climate change impacts (glacier melt, deforestation), aid in natural disaster management (earthquakes, landslides, floods), and support resource management (agriculture, water resources).
- Significance: The mission elevates India's status to an equal collaborator in high-technology space projects, strengthening its role as a major space power.
Pacific Ring of Fire Active: Earthquakes and Tsunami Alerts
A series of powerful earthquakes, with magnitudes up to 6.9, struck off Russia's Kamchatka Peninsula, a highly active part of the Pacific Ring of Fire. This triggered widespread tsunami warnings, highlighting the importance of international coordination in disaster warning systems and serving as a key case study for disaster management.
Ecological Security: The Imperative of Restoring Mangroves
An analysis highlighted the critical role of mangrove ecosystems. They act as natural shields against cyclones and storm surges, serve as biodiversity hotspots, and are effective carbon sinks. Investing in mangrove restoration is a cost-effective, nature-based solution for climate change adaptation and disaster risk reduction.
Prelims Corner: Factual Compendium
- TRF (The Resistance Front): A Pakistan-based terror group, identified as a proxy of Lashkar-e-Tayyiba (LeT) in a recent UNSC Monitoring Team report.
- 'Act East' Policy: India's policy to deepen engagement with Southeast Asian nations. The Philippines is a key partner.
- Banking Laws (Amendment) Act, 2025: Key changes include raising the 'substantial interest' threshold for director-related loans to ₹2 crore and allowing PSBs to transfer unclaimed assets to the IEPF.
- System of National Accounts (SNA): Newly updated global standard for economic data to better capture the digital economy, crypto assets, and sustainability (NDP).
- IEPFA: The Investor Education and Protection Fund Authority, under the Ministry of Corporate Affairs, running the 'Saksham Niveshak' campaign.
- PEACE Model: A non-coercive police interrogation technique (Preparation, Engage, Account, Closure, Evaluation).
- DPDP Act & RTI: The DPDP Act, 2023 amended Section 8(1)(j) of the RTI Act, 2005, removing the public interest override for disclosing personal information.
- NISAR Satellite: A joint NASA-ISRO mission using dual L-band and S-band radar, launched by a GSLV-F16 into a Sun-synchronous polar orbit.
- Kamchatka Peninsula: A highly seismic region in Russia, part of the Pacific Ring of Fire.
Mains Practice Questions
- "The recent imposition of tariffs by the U.S., explicitly linking them to India's relations with Russia, represents a significant challenge to India's policy of 'strategic autonomy'. Critically analyze." (GS Paper 2, 15 Marks, 250 words)
- "The amendments to the Right to Information Act via the Digital Personal Data Protection Act have ignited a debate between the right to privacy and the public's right to know. Discuss the key areas of contention and their implications for transparency and accountability in governance." (GS Paper 2, 15 Marks, 250 words)
- "The NISAR mission is a testament to the deepening India-U.S. strategic partnership in high-technology domains. Elaborate on the mission's objectives and its significance for India's disaster management and climate change mitigation efforts." (GS Paper 3, 10 Marks, 150 words)
Daily Quiz
1. The recently launched NISAR satellite, a joint mission by ISRO and NASA, is unique because it is the first to use which of the following radar frequency band combinations?
A. C-band and X-band
B. ✅ L-band and S-band
C. Ku-band and Ka-band
D. Only L-band
2. With reference to the Banking Laws (Amendment) Act, 2025, which of the following provisions will come into effect from August 1, 2025?
- PSBs can transfer unclaimed dividends to the Investor Education and Protection Fund (IEPF).
- The RBI is empowered to issue a digital currency.
- The maximum tenure for directors in cooperative banks is increased to 10 years.
- The threshold of 'substantial interest' for loans to director-related entities is raised to ₹2 crore.
Select the correct answer using the code given below:
A. 1 and 2 only
B. 3 and 4 only
C. ✅ 1, 3 and 4 only
D. 1, 2, 3 and 4
3. The 'PEACE model', recently seen in news in the context of governance reforms, refers to:
A. A framework for post-conflict reconciliation.
B. ✅ A non-coercive method of police interrogation.
C. A public-private partnership model for environmental projects.
D. A system for rapid evaluation of disaster-affected areas.
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