UPSC Key: AI summit begins, Refurbished medical devices, and Maternity Benefit Act

Key Points to Ponder:

— What is Artificial Intelligence (AI) and its application?

— What is the objective of the AI impact summit 2026?

— What are the opportunities and challenges posed by AI?

— What are the initiatives taken by India to integrate AI?

— What is Digital Public Infrastructure (DPI)?

— How can AI help India accelerate economic growth and governance capacity?

— Why is a global compact on AI the need of the hour?

— What are the ethical issues related to AI?

Key Takeaways:

— Coming to the Global South for the first time, the summit, scheduled from February 16-20, will be officially inaugurated by Prime Minister Narendra Modi on February 19.

— At 5 pm Monday, Modi will inaugurate the co-located India AI Impact Expo 2026 at Bharat Mandapam. The Expo, the Prime Minister’s Office said Sunday, will serve as “a national demonstration of AI in action, where policy meets practice, innovation meets scale, and technology meets the everyday citizen”.

— The summit represents the latest chapter in an evolving international conversation on AI governance and innovation. What began as the AI Safety Summit at Bletchley Park in the UK in November 2023, where 28 countries signed the landmark Bletchley Declaration focusing on identifying AI safety risks, has progressively broadened its scope. The Seoul Summit in May 2024 expanded discussions to include innovation and inclusivity alongside safety, while the Paris AI Action Summit in February 2025 emphasised practical implementation and economic opportunities, though issues of safety and security were largely sidestepped.

— India’s pitch is somewhat different. Where previous summits wrestled with catastrophic risks and regulatory frameworks, New Delhi is centring the conversation on, what Electronics and IT Secretary S Krishnan calls, “People, Planet, and Progress” – to build AI solutions that focus on on-ground issues, an approach that reflects India’s position both as an aspiring AI power and a voice for the Global South.

— The summit is expected to be watched closely across the world as it comes amid concerns that AI could fundamentally alter previously settled economic drivers, with world and corporate leaders discussing their plans for the technology.

— Governments, industry leaders, researchers, civil society organisations, and international institutions are set to attend the event. It is expected to see participation from over 100 countries, including over 20 heads of government. The list includes French President Emmanuel Macron, Brazil’s President Luiz Inacio Lula da Silva, Spain’s President Pedro Sanchez Perez, Switzerland’s President Guy Parmelin, Netherlands’s Prime Minister Dick Schoof, and Estonia’s President Alar Karis, among others.

— The summit comes at a time of great upheavals in the world. The proliferation of AI has led to existential questions about the future of work and the impact it will have on the jobs of today. India’s IT sector, a key driver of the country’s economic engine for the last two decades, faces one of its biggest challenges yet, as AI threatens to make many of their offerings obsolete. AI’s drain on resources like energy and water is also weighing heavy on many people’s minds.

— The summit will host more than 500 sessions over the course of the next five days to try and address a roadmap through which some of these fundamental fears can be addressed. These sessions will address AI safety, governance, ethical use, data protection and India’s approach to sovereign AI, including the development of indigenous foundation models for strategic sectors.

— The summit will also have deep dives into how AI is impacting professions and industries, the new skill requirements for the evolving job market, and the role of AI in supporting farmers, small businesses and individuals.

From the Front Page– “AI shakes state craft: Prediction markets test diplomats, spies”

— C. Raja Mohan- “As world leaders gather in New Delhi this week for the AI Summit to debate how governments should deploy artificial intelligence for public good, a less-noticed but more unsettling transformation is under way.”

— “While governments discuss how to regulate the transformative technological revolution, AI-driven prediction markets are beginning to constrain state behaviour — including on decisions about war and peace.”

— “If Trump 2.0 ushered in diplomacy breaking live as social media posts, in the age of AI, statecraft will not rest solely in the chancelleries. It will unfold in digital marketplaces where algorithms continuously calculate the odds of history even as it is made.”

— “When traders on the Polymarket began assigning probabilities to ceasefires in Ukraine, election outcomes in New York city, or interest rate cuts by major central banks, many dismissed it as digital-age gambling. But prediction markets are not just online betting platforms. They represent a new way of forecasting political and economic events — and, increasingly, a fresh force influencing them.”

— “Prediction markets are digital platforms where participants buy and sell contracts linked to future events. If a contract pays 100 rupees but is trading at 70, the market is effectively saying there is a 70 per cent likelihood of that event occurring. The basic idea is that when people risk money on their judgments, market prices tend to reveal the best informed estimate of the future.”

— “Polymarket, a blockchain-based global platform, allows users to trade on questions ranging from election results to the likelihood of war between countries. It uses cryptocurrency and operates largely outside traditional regulatory systems.”

— “For decades, geopolitical forecasting was done behind closed doors by foreign offices and intelligence agencies. They had the monopoly of classified and privileged information. Think tanks, risk analysts, and media commentariat speculated on these from outside based on their reading of open source material. Today, prediction markets are challenging state monopoly and claims of the expert class.”

— “AI models can scan vast amounts of information in real time — legislative drafts, leaders’ speeches and their career records. They can continuously monitor major decision makers, track satellite imagery, shipping data, financial flows and social media chatter. Where national bureaucracies are cumbersome, and the expert class is slow to see new patterns, AI-driven systems respond in seconds.”

— “As a result, we may be getting closer to a real-time geopolitical barometer…The idea that perceptions shape reality is not new. Financial markets have long demonstrated that expectations can trigger self-fulfilling outcomes. But AI amplifies this dynamic. Growing expectations of conflict may encourage military mobilisation and great power intervention. In that sense, AI-enhanced prediction markets become participants in geopolitics, not just observers.”

— “The power of predictive markets poses major challenges to traditional statecraft. For centuries, diplomacy has been about managing uncertainty–taking big decisions in the fog of limited information. The statesmen and women relied on intelligence assessments, diplomatic advice and personal political judgement.”

— “AI-driven prediction markets introduce a new element: radical openness that thins out the fog to a large extent. Probabilities of conflict, regime change or policy shifts are continuously priced in open digital platforms. Political leaders accustomed to shaping narratives must now contend with numerical forecasts updated every second.”

— “There are clear advantages, like better situational awareness of speedier decisions. There are also dangers — AI has lowered the cost of producing synthetic information. It also increases the ease of manipulation that can generate the aura of inevitability around certain outcomes. In the AI era, information integrity itself becomes a major battleground.”

— “For emerging powers like India, the challenge is particularly acute. Governments have long operated under the assumption that sensitive information can be protected and narratives carefully managed. But in an age where probabilities of internal conflict or external crises are traded globally, secrecy becomes harder to sustain. Sound political judgement and strategies rooted in structural reality acquire a greater premium.”

From the Explained Page – “At global event, India aims to spotlight local solutions”

— As the world faces fundamental questions, spurred by the sensational growth in AI services, much of the global conversation around them will happen in India over the next five days, with New Delhi playing host for the India-AI Impact Summit 2026. Between February 16 and 20, several world and corporate leaders will try to answer the burning questions facing the world today.

— With the summit, India intends to generate actionable recommendations that contribute to long-term AI innovation and governance objectives rather than framing immediate binding regulations.

— Union IT Minister Ashwini Vaishnaw has billed the summit as the biggest one so far, and had last month said the government has received a phenomenal response from across the world.

Governments, industry leaders, researchers, civil society organisations, and international institutions are set to attend the event. 

From the Editorial Page- “On building public AI, governments must be tactical but remain flexible”

— Akash Kapur and Arvind Narayanan write- “Some 35,000 delegates will arrive in Delhi this week for the fourth Global AI Summit. It is the first time the summit is being held in the Global South. Many of its themes reflect that orientation.”

— “India has been eager to frame the summit as a marker of a new approach to AI. Through its work on Digital Public Infrastructure (DPI), India has argued that it is pioneering an alternative model for digital transformation: One that highlights public purpose over private profit. Many observers have suggested that DPI could offer lessons for building more inclusive and representative AI.”

— “Questions about the role of the state are central. In principle, DPI is not only about government: It emphasises public interest rather than public ownership, and its goal is to create more competitive markets. In practice, the state plays a decisive role, whether through policy or funding.”

— “The apparent tension in a framework that emphasises markets yet relies on the state is particularly acute when it comes to public investments. AI is capital intensive, and it emerges at a moment of global fiscal constraint. How much should taxpayers underwrite the development of public AI systems, and how should policymakers weigh the risks of crowding out private investment against the benefits of building shared capacity? As governments around the world consider alternatives to proprietary AI, does DPI offer guidance on how to finance these systems?”

— “Our answer, in brief, is that DPI does offer a useful framework for thinking about public investment in AI — but only to a point. We encourage governments, including India’s, to draw seriously on the lessons of DPI, but we caution against treating DPI as a comprehensive blueprint or checklist. Another pitfall is for investment to focus exclusively on fostering AI innovation; often, it is the rate of diffusion that will ultimately determine AI’s impact.”

— “Much of the conversation around DPI emphasises its public dimension. But when considering its lessons for AI, the infrastructural component is equally important. At its core, the DPI argument is that some technologies are foundational and cross-cutting: They support a wide range of downstream uses and function as neutral, open platforms for innovation. Analogies are drawn to roads and bridges; the World Bank describes DPI as “digital plumbing”.”

— “When it comes to AI-as-infrastructure, one particularly promising avenue is high-quality datasets. India’s recently released AI governance guidelines already emphasise the importance of curating “high-quality and representative datasets,” some of which could be drawn from DPI systems (e.g., by repurposing payment data). We agree with this orientation and argue that governments are uniquely positioned to support such initiatives, with one important caveat: Data reuse must be accompanied by robust governance to protect privacy and other rights (a point acknowledged by the AI guidelines).”

— “Governments should also consider altogether new forms of infrastructure. Just as the Global South pioneered lighter, lower-cost forms of physical infrastructure — for instance, bus rapid transit systems — there are opportunities to rethink foundational AI.”

— “Infrastructural AI investments have the advantage of being high-leverage; they support a range of downstream innovation. But there are also cases where more targeted public funding of specific applications makes sense, typically because of various forms of market failure.”

— “A similar logic applies to AI used within government. Internal tools — copilots for officials, AI-based training simulations — can yield large public returns but rarely drive private investment. These tools depend more on institutional and administrative fit than technical sophistication; public funding must extend beyond mere procurement to training and organisational integration.”

Do You Know:

— Artificial Intelligence is the ability of machines, especially computers, to perform tasks that typically require human intelligence. These tasks include things like understanding language, recognising patterns, solving problems, and making decisions. 

— Essentially, AI enables machines to think and learn from experience, just like humans do, but often at a much faster pace with access to vast amounts of data.

— AI can be classified into two types: Artificial Narrow Intelligence (ANI) also known as weak AI and Artificial General Intelligence (AGI) also referred to as strong AI. 

Other Important Articles Covering the same topic:

📍Knowledge Nugget | AI Impact Summit 2026 and beyond: What are the must-know AI-related initiatives of India?

📍Artificial intelligence’s larger promise—together, let’s keep it

📍Best of Both Sides | On AI impact, India has important lessons for the world

Previous year UPSC Prelims Question Covering similar theme:

(1) With the present state of development, Artificial Intelligence can effectively do which of the following? (UPSC CSE 2020)

1. Bring down electricity consumption in industrial units

2. Create meaningful short stories and songs

3. Disease diagnosis

4. Text-to-Speech Conversion

5. Wireless transmission of electrical energy

Select the correct answer using the code given below:

(a) 1, 2, 3 and 5 only

(b) 1, 3 and 4 only

(c) 2, 4 and 5 only

(d) 1, 2, 3, 4 and 5

Previous year UPSC Mains Question Covering similar theme:

Introduce the concept of Artificial Intelligence (AI). How does Al help clinical diagnosis? Do you perceive any threat to privacy of the individual in the use of Al in healthcare? (UPSC CSE 2023)

 

THE EDITORIAL PAGE

Maternity Benefit Act is progressive. Empathy is key

Syllabus:

Preliminary Examination: Indian Polity and Governance – Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues.

Mains Examination: General Studies-I, II: Role of women and women’s organization, population and associated issues, Social empowerment, Government policies and interventions. 

What’s the ongoing story: Vijaya Kishore Rahatkar writes- “For decades, India has celebrated the academic brilliance of its women. They consistently top school boards, civil services, medical entrances, and university examinations. And yet, when we look at corporate boardrooms or senior decision-making spaces, their presence thins out sharply. Motherhood, for many women, is the point at which this quiet exit begins.”

Key Points to Ponder:

— What are the key provisions of the Maternity Benefit Act?

— How have maternity benefit policies evolved in India? 

— Know about the paternity leave.

— Despite the existence of the Maternity Benefit Act, why does the implementation gap persist, especially in the private and informal sectors?

— What are the implications of excluding informal sector and contractual women workers from maternity benefits, both socially and economically?

— How does the legal and policy framework for maternity benefits in India compare with global best practices?

— How does the lack of affordable childcare affect women’s employment in India?

Key Takeaways:

— “The Maternity Benefit Act, with its provision of six months of paid leave, is undeniably progressive and among the more generous protections globally. But no law can legislate the emotional reality of a new mother. Many return carrying guilt, anxiety, and exhaustion, and are seen as less reliable. A new mother needs reassurance both at home, where she must be encouraged to believe that seeking professional growth is not selfishness, and within her organisation, where she must feel confident that thinking about her child does not diminish her capability or commitment.”

— “Although the Act extends to almost all wage-earning women except the self-employed, the quality of support they receive varies dramatically. A woman in a permanent government post enjoys not only maternity leave but access to long-term childcare leave of up to 730 days, with full pay for the first year and partial pay thereafter, providing her with a relatively structured path back into her career.”

— “In smaller private establishments, while employers may comply with the Act, this does not equate to acceptance. Many women return to find their responsibilities reassigned, their promotion prospects diminished, and their growth trajectory slowed. For the Act to succeed, empathy needs to be woven into organisational behaviour. Women need workplaces that believe ambition and motherhood can coexist with dignity.”

— “One of the most significant barriers for new mothers is the lack of dependable, affordable childcare. Yet this challenge presents an extraordinary opportunity. Millions of unskilled and semi-skilled women in India are seeking employment. Through training, certification, and skilling modules, they can form a new, formalised workforce of caregivers. It has the potential to become a major employment generator for women and a critical support pillar for working mothers. Importantly, empowering one woman to work should not come at the cost of another’s exploitation.”

— “In recent years, the rise of “DINK” (Double Income, No Kids) couples has often been portrayed as a lifestyle preference. But for many women, it is a choice born of fear of career stagnation and societal expectations that motherhood is a woman’s sole responsibility. While laws can protect wages and jobs, they cannot dictate how families behave. The burden of motherhood grows heavier when a woman is expected to project an image of “effortless coping” as she balances childcare and work pressure. Unless families and workplaces share this load, women will continue to drop out quietly, painfully, and permanently.”

Do You Know:

— In a judgment on May 23, 2025, the Supreme Court set aside a Madras High Court order that had denied maternity leave to a government school teacher for the birth of her third child. The Court ruled that maternity leave is part of a woman’s reproductive rights and requires constitutional protection. 

— This case once again highlights how maternity benefits are integrally connected to notions of social justice and inclusion. Historically, the provision of paid maternity leave is connected to the idea of the welfare state from the 1880s. It emerged as an outcome as well as a cause of women’s influence in policy making. 

— Maternity benefits were first granted in welfare states such as Bismarckian Germany and France to deal with concerns about depopulation and maternal and infant health problems. This helped incorporate more and more women into the state apparatus as well as workforce.

Other Important Articles Covering the same topic:

📍Maternity benefits integral to right to life, health and equality

 

EXPLAINED 

Refurbished medical devices: a new global vs domestic debate

Syllabus:

Preliminary Examination: Current events of national importance.

Mains Examination: General Studies-II: Issues relating to development and management of Social Sector/Services relating to Health, Government policies and interventions for development.

What’s the ongoing story: The import of refurbished or pre-used medical devices such as magnetic resonance imaging (MRI) scanners, computed tomography (CT) machines, robotic surgery systems, and other high-end diagnostic equipment has divided India’s medical device industry, with stakeholders sharply split over regulation. 

Key Points to Ponder:

— What are refurbished medical devices?

— Why are they imported into India?

— What are the advantages of refurbished medical equipment for the accessible healthcare system in India?

— What are the concerns related to the refurbished medical devices?

— Know about the Medical Devices Rules, 2017 and Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.

— Is there any regulatory framework governing the import of refurbished medical equipment in India?

Key Takeaways:

— Indian manufacturers have raised concerns about safety, oversight and the impact on domestic industry. International medical device associations argue that instead of restrictions or bans, India needs a clear and robust policy under the Medical Devices Rules, overseen by the Ministry of Health and Family Welfare (MoHFW).

— On February 3, the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers informed the Rajya Sabha that MoHFW has constituted a committee on “Policy on regulation of refurbished medical devices”, which will examine the scope of refurbished devices, develop methodologies to evaluate their safety, performance and remaining useful life, and suggest guidance for waste disposal.

— Refurbished medical equipment are essentially used devices and systems that have been restored to their original operating specifications and are then sold to hospitals and clinics at a lower cost. Most of these are capital-intensive technologies that cost several crores, depending on their configuration.

— These include high-end diagnostic and imaging systems such as CT scanners, MRI machines, PET-CT systems, advanced endoscopy and laparoscopy systems, and robotic navigation systems.

— A new 1.5T MRI machine (T stands for Tesla, the unit to measure magnetic field) can cost between Rs 4 crore and Rs 8 crore or more, while refurbished versions typically range between Rs 1-3.5 crore. Such expenditure is often beyond hospitals in Tier-2 and Tier-3 cities, district centres, and standalone diagnostic facilities. Refurbished equipment can reduce upfront capital costs, enabling local access to advanced diagnostics and supporting affordability and decentralisation of healthcare.

— Although India’s medical device manufacturing ecosystem is expanding, the country continues to depend on imports for advanced imaging and highly specialised technologies due to technological complexity, advanced detector systems, precision component supply chains and established global manufacturing hubs.

— India has no dedicated regulatory pathway under the Medical Devices Rules, 2017 defining or governing refurbished devices. Medical devices were brought under a phased regulatory framework beginning in 2017 through the Medical Devices Rules, and in 2020 all medical devices were notified as “drugs” under the Drugs and Cosmetics Act, expanding central regulation but without creating a specific pathway for refurbished products.

— Currently, imports are allowed through no-objection certificates issued by an expert committee under the Ministry of Environment, Forest and Climate Change (MoEFCC). The committee can approve imports of 38 high-end and high-value medical equipment items, strictly based on a list prescribed by MoHFW’s Directorate General of Health Services. 

— Imports of used medical equipment are governed primarily under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. Earlier, used critical-care devices were prohibited. In December 2022, amendments permitted the import of certain “high-end and high-value used medical equipment” subject to stringent conditions.

— These include prior permission from MoEFCC after expert scrutiny, submission of maintenance history and quality assurance reports, compliance documentation, technical inputs from the Central Drugs Standard Control Organisation (CDSCO), and import authorisation from the Directorate General of Foreign Trade.

— India also lacks a statutory definition distinguishing “used”, “refurbished”, “reconditioned”, or “remanufactured” medical devices, creating ambiguity over classification, licensing and compliance.

— The debate centres on the absence of a clear regulatory pathway under the Medical Devices Rules. The issue is no longer whether refurbished devices should exist, but how they should be regulated.

— Another dimension concerns industrial policy versus healthcare access. Some stakeholders argue unrestricted imports could hurt domestic manufacturing. Others stress that refurbished equipment plays a vital role in expanding advanced diagnostics in Tier-2 and Tier-3 cities. Internationally, refurbished devices are regulated rather than universally banned.

UPSC Prelims Practice Question Covering similar theme:

(2) With reference to refurbished medical devices, consider the following statements:

1. They are used medical equipment restored to original operating specifications.

2. They are generally cheaper than new devices.

3. There is no statutory definition distinguishing “used” and “refurbished” devices.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 1 only

(c) 2 and 3 only

(d) 1, 2 and 3

The four stanzas of Vande Mataram: A truncated song, a long-running row

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-I, II: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues, Government policies and interventions. 

What’s the ongoing story: The Union government’s January 28 directive on singing all six stanzas of the National Song, Vande Mataram, at official functions has sparked objections from Muslim organisations in India.

Key Points to Ponder:

— Read about the Swadeshi movement.

— Read about Bankim Chandra Chatterjee and his work.

— Know the history of adoption of the national song Vande Mataram.

— What are fundamental duties?

— What is the Prevention of Insults to National Honour Act, 1971?

— Know about the history and adoption of the national anthem.

— What was the significance of Vande Matram in the independence movement?

Key Takeaways:

— The directive, which notified the first set of protocols for singing the National Song, stated that the full version of Vande Mataram — lasting 3 minutes and 10 seconds — must be played before Jana Gana Mana when both are part of official functions, and that the audience shall stand in attention when it is performed.

— So far, at all public functions, we only get to hear the first two stanzas of Vande Mataram. Some of the later parts of the composition contain religious imagery, which have been a source of contention.

— The government, however, repeatedly brought up the “dropped” stanzas, including in Parliament, as it commemorates 150 years of the National Song. The latest move appears to be in line with that larger push. Here’s a history of the composition of Vande Mataram and why objections are being raised about the latter four stanzas.

— Vande Mataram (meaning mother, I bow to thee) was composed in Sanskritised Bengali by Bankim Chandra Chattopadhyay in 1875. Six years later, it was included in his novel Anandamath, which tells the story of the late-18th century Sanyasi Rebellion — a series of armed uprisings against the rule of Mir Jafar and his East India Company overlords.

— Vande Mataram emerged as a rallying cry during the Swadeshi movement (1905–08), becoming closely associated with the freedom struggle.

— An October 1937 letter from Jawaharlal Nehru to Subhas Chandra Bose expressed apprehension that the song could provoke Muslims owing to its Anandamath background. But he added that the outcry was “manufactured” by “communalists”.

— A Congress Working Committee resolution from October 1937 recommended that whenever Vande Mataram is sung at national gatherings, only the first two stanzas should be sung. It noted that there was nothing in the first two stanzas to which any one can take exception, and that the latter stanzas were not well known.

— Indeed, the first two stanzas describe the beauty of the motherland — its fertility, its waters, its greenery. And in 1950, these stanzas were adopted as India’s National Song.

— While the Constituent Assembly accorded the song equal honour and respect alongside the National Anthem, there had been no compulsory etiquette, posture, or legal requirement associated with singing or reciting it. The government’s move now looks to change this.

— The opposition to Vande Mataram from Muslim scholars is rooted in the interpretation that the song’s imagery of “Mother India” as a goddess violates the basic Islamic tenet of strict monotheism, which forbids followers from worshipping anyone other than Allah.

— Then comes the issue of the latter stanzas. The third stanza talks about “crores and crores” of arms ready to bear swords in the defence of the motherland.

— The fourth says the motherland’s image is carved out in every shrine, and the fifth likens the motherland to goddesses Durga, Lakshmi and Saraswati. This invocation of Hindu goddesses has sparked objections from Muslim scholars.

Do You Know:

— In recent years, several petitions have been filed in courts seeking a framework for the rendition of Vande Mataram and clarity on whether penalties can be imposed under the Prevention of Insults to National Honour Act, 1971, which was enacted to prevent disrespect for national symbols.

— The National Anthem enjoys explicit constitutional and statutory protection, unlike the National Song. Article 51A(a) of the Constitution places a fundamental duty on citizens to respect the national anthem, with its recitation and use governed by detailed executive orders issued by the MHA.

Other Important Articles Covering the same topic:

📍From ‘national song’ to ‘modern anthem’ – the journey of Vande Mataram

📍Knowledge Nugget: MHA issues first protocol on Vande Mataram — What does it say?

UPSC Prelims Previous year and Practice Question Covering similar theme:

(3) Which among the following events happened earliest? (UPSC CSE 2018)

(a) Swami Dayanand established Arya Samaj.

(b) Dinabandhu Mitra wrote Neeldarpan.

(c) Bankim Chandra Chattopadhyay wrote Anandmath.

(d) Satyendranath Tagore became the first Indian to succeed in the Indian Civil Services Examination

(4) Consider the following statements:

1. Vande Mataram was adopted as India’s National Song by the Constituent Assembly in 1950.

2. The song was ardhamagadhi Prakrit by Bankim Chandra Chattopadhyay.

Which of the statements mentioned above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) None of the above

 

THE IDEAS PAGE

Trade pact opens doors with caution, and with quota systems, in agriculture

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-II, III: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests; Indian Economy, Effects of liberalisation on the economy.

What’s the ongoing story: Ashok Gulati writes-“Let me state at the very outset that anyone who thinks exports are always good but imports are bad does not understand trade policies. There has been a lot of noise and commotion in Parliament over the India-US trade deal. The opposition parties, led by the Leader of Opposition, feel that the deal is a total surrender. But the government benches projected it as the best deal under the given circumstances. The truth may be somewhere in between. There is always give-and-take in any trade deal. This one is no different.”

Key Points to Ponder:

— Read about the evolution of India-US relations.

— Know the key highlights of the India-US Interim deal.

— What was the impact of US reciprocal tariffs on India?

— What is the significance of the India-US interim trade deal? 

— What are the concerns associated with the India-US interim trade deal?

— What is India’s stand on Russia-Ukraine war?

Key Takeaways:

— “India had to give in to the US demand that it buy more energy, aircraft, and high-tech equipment. We had to agree to show our “intent” or “commitment” to buy $500 billion worth of goods from the US over the next five years. That looks huge as our current goods imports from the US are well under $50 billion a year. But in return, India got the US to slash its import tariffs on Indian goods to 18 per cent, which is very much in line with our competitors in South and Southeast Asia, and almost half of what is being imposed on China. This, the government says, is the biggest victory and opens doors for significantly higher exports from India to the largest economy in the world — the US.”

— “There are also strong apprehensions expressed by opposition parties as well as by some farmer groups on the agricultural segment of the deal…What are the fears on the agri-trade front? First, the US will flood the Indian market with its agri-produce and our farmers will be severely hurt. Second, it will throw its genetically modified (GM) crops or their derivatives like soya oil and dried distillers’ grains (DDGs) into our food system, which will put the health of millions of our citizens at risk.”

— “Third, farms in the US are very large, mechanised, and receive large subsidies — our small farmers cannot compete with them and will thus lose their livelihoods on a large scale. Let me discuss each of these fears, and how much truth there is to them.”

— “In the trade deal, India has largely opened crops that are either not grown in the country or grown on very small areas, like tree nuts and berries. Almonds have already been coming to India at low duty of about 10 percent in ad-valorem terms (Rs 42/kg). Walnuts, pistachios, pecans, cranberries and blueberries are likely to attract similar duty (10 to 15 per cent) and there will be some imports of those. But they are not going to impact our farmers much.”

— “Concerns are raised about apples, and their duties are likely to come down from 50 per cent to 25 per cent or so, although more will be known only when the fine print is out. My understanding is that lowered duties will be accompanied by import quotas, safeguarding our farmers adequately.”

— “The other concern when it comes to agri-imports is that of GM crops or their derivatives like soya oil and DDGs. It may be noted that India has not allowed direct import of GM corn or GM soya, which are living modified organisms, and which can be seeded to grow GM crops in India. But soya oil or DDGs, which are permitted to be imported, actually have been coming for quite some time. It may be noted that when GM soya or GM corn are processed into oil or DDGs, traces of GM are either absent or negligible, but more importantly, they are no longer living modified organisms. They cannot be germinated, and there is no adverse health impact either on poultry, cattle or human beings as per the US Food and Drug Administration.”

— “The third point is about competition: Whether our small farmers can compete with large US farmers, who are subsidised. It may be noted that our small farmers have done reasonably well in global competition. Our overall agri-exports to the world were about $52 billion and imports about $37 billion in 2024.”

— “The US is a net importer of agri-products ($59 billion in 2024). We also give a lot of input subsidies to our farmers, be it in the form of fertiliser subsidy, credit subsidy or insurance premium subsidy, and even direct income support in the form of PM-KISAN. If we want to retain the competitive strength of our smallholders, we need to invest much more in agri-R&D.”

From the Ideas Page- “Beyond the deal: US-China relations impact India-US ties”

— Ishan Bakshi writes- “The broad contours of the India-US trade deal have been agreed upon. Never mind that the granular details are sketchy, the announcement itself is noteworthy. With agreements with the US, EU and the UK, India is now more closely integrated with the Western world than ever before. There is, after all, a convergence of economic and strategic interests.”

— “The contentious issue of Russian oil, however, remains. Agreeing to stop or even drastically cut down its crude imports would mean that the government has concluded that the cost-benefit ratio of buying large quantities of Russian crude has now turned adverse. Perhaps the pain of the imposition of the tariffs and the penalty, the dwindling of foreign capital flows and the sharp decline in the rupee was simply too much to bear.”

— “The question now is whether the agreement is a wholehearted or hesitant embrace? Have long-held ideological positions been cast aside? It does appear that both sides are moving ahead with caution. There is a trust deficit. India won’t find it easy to paper over the bitterness of the last several months. It has also underlined its strategic options by affirming strong relations with Russia — whether falling crude imports will affect the relationship with its top defence supplier is unknown — and improving equations with China.”

— “But, therein lies the conundrum. US-China relations lie at the heart of the India-US relationship. Decades ago, the US facilitated China’s entry to the WTO. American companies shifted their manufacturing to China in search of greater efficiency. They provided the capital and technical assistance, in part, to build up the Chinese economy. While the US benefitted greatly from this, it has turned out to be a strategic mistake. Propped up by enormous subsidies and an undervalued currency, Chinese manufacturing has done immense damage to the economic and social fabric of the US.”

— “The China shock has rendered millions unemployed, destroying communities. In recent years, faultlines between the two countries have only deepened. In fact, it would not be an exaggeration to say that the US-China economic clash will be the major global contest over the coming decades.”

— “While long-term trends may well point towards greater strategic and economic integration between India and the US, it’s difficult to say how this will play out in the immediate future.”

Do You Know:

— In the calendar year 2024, India exported goods worth roughly $81 billion to the US and imported goods worth $43 billion, leading to a trade surplus of about $38 billion. Out of this, agri-exports were about $5.7 billion and imports roughly $2.1 billion, giving India an agri-trade surplus of $3.6 billion.

Other Important Articles Covering the same topic:

📍UPSC Issue at a Glance | India-US Interim Trade Deal: Backdrop, key highlights, gains, and concerns

📍 What India has really given on agriculture in India-US trade deal

Previous year UPSC Mains Question Covering similar theme:

‘What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self-esteem and ambitions’. Explain with suitable examples. (UPSC CSE 2019)

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PRELIMS ANSWER KEY

1. (b)  2. (d)  3. (b)   4. (a)

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