UPSC Key: BRICS, Keralam and India’s Central Asia Policy

Trade war: Canada declares retaliatory tariffs on $20 billion worth of US goods

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

What’s the ongoing story: The United States and Canada find themselves in a bitter trade war, after Washington imposed 50% tariffs on about $20 billion worth of Canadian goods and Ottawa vowed to retaliate “dollar for dollar”.

Key Points to Ponder:

• What is a tariff?

• The US and Canada trade-know in detail

• Why is the US imposing fresh tariffs now?

• What did US want from Canada and did not get?

• What did Canada want from the US and did not get?

• What will be the US-Canada tariff war impact?

• Weren’t those tariffs cancelled?

• How can trade diversion arising from US–Canada trade tensions create both opportunities and challenges for Indian exports?

Key Takeaways:

• While US tariffs kicked off on August 22, Canada’s will come into effect on September 8. The move came after trade negotiations collapsed at the last minute.

• In the February verdict, the US Supreme Court did not eliminate presidential tariff powers. It ruled that the President did not have the authority to impose sweeping import tariffs under a specific law called the International Emergency Economic Powers Act (IEEPA).

• Trump’s administration has since looked for other tariff routes. For the new Canadian tariffs, it has invoked Section 338 of the Tariff Act of 1930, part of the Depression-era Smoot-Hawley legislation. The provision allows the President to impose tariffs of up to 50% on countries deemed to discriminate against US businesses. This law has never previously been used to impose tariffs.

• On India and a host of other countries, tariffs were imposed last month under Section 301 of the US Trade Act, which is applicable to goods produced with forced labour.

Do You Know:

• While the full details are not clear yet, Washington said it was responding to Canadian discrimination against US businesses. The Trump administration said it had offered Canada cuts in tariffs on sensitive sectors including steel, autos and lumber, but the neighbour wanted additional concessions and backed away from commitments.

• US trade representative Jamieson Greer said on a Fox News chat show, “We’ve said enough and so we’ve taken countermeasures. Our interest is in protecting American workers and protecting American supply chains.” Trump posted on TruthSocial on August 23, “Canada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!”

• Canada, meanwhile, said it has been willing to make concessions on tariffs on US steel, aluminium and autos if Washington substantially reduced its own tariffs. Canada was also willing to encourage provinces to restore US alcohol sales, the administration said.
But Carney said the US demands went too far. According to him, Washington’s final terms would have reduced tariff relief for Canadian-made vehicles and restricted Canada’s ability to strike trade deals with other countries. He also said Washington’s signature was at times “in pencil”, implying that the Trump administration wasn’t dependable.

• The immediate economic impact may be significant, but the political impact could be larger.
The new US tariffs cover about 5% of Canada’s annual exports to the US, including products ranging from hockey equipment and wine to agricultural goods, clothing and furniture. Canada says its retaliation will target sectors including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.

• The two countries exchanged $880 billion worth of goods and services last year. For Canada, the stakes are especially high: about 72% of its goods exports went to the US last year.
Tariffs are basically duties importers pays for goods they bring into the country. If the importer is paying more, she is likely to pass on the cost to customers. Hence, the failed trade talks are bad news for Americans too, already struggling with inflation amid the Iran war economic setbacks.

• The US and Canada have historically been close allies, but after Trump started talking about making Canada the 51st state of America, Carney came to power last year on the promise of standing up to the US President. For now, the country has closed ranks behind him.

Other Important Articles Covering the same topic:

📍Trump threatens 50% tariffs on Canada, Ottawa’s ‘dollar for dollar’ retaliation

Previous year UPSC Prelims Question Covering similar theme:
1) Consider the following countries: (UPSC CSE, 2018)
1. Australia
2. Canada
3. China
4. India
5. Japan
6. USA
Which of the above are among the ‘free-trade partners’ of ASEAN?
(a) 1, 2, 4 and 5
(b) 3, 4, 5 and 6
(c) 1, 3, 4 and 5
(d) 2, 3, 4 and 6

Previous year UPSC Mains Question Covering similar theme:
📍How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India? (UPSC, GS3, 2018)

Front

Xi likely to attend BRICS in Delhi next month with large delegation

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

What’s the ongoing story: Chinese President Xi Jinping is likely to attend the summit of BRICS leaders in New Delhi on September 12 and 13, The Indian Express has learnt. He last visited India in October 2019, months before PLA incursions along the Line of Actual Control in eastern Ladakh triggered a military standoff between the two countries.

Key Points to Ponder:

• BRICS-Know in detail

• Map Work-BRICS Countries

• Evolution of BRICS-Know in Detail

• Evolution of BRICS from Russia-China (RC) to Russia-India-China (RIC) to Brazil- Russia-India-China (BRIC) to Brazil-Russia-India-China-South Africa (BRICS) to BRICS 2.0

• What is the Fortaleza Declaration?

• Brazil, Russia, India, China and South Africa (BRICS) Economy-Key Features

• RIC (Russia-India-China) out of BRICS-Significance and Stature in World Politics?

• Why BRICS Matters?

• Is the BRICS alliance no longer relevant and effective?

• The geopolitics of BRICS looks quite different today-how?

Key Takeaways:

• It is learnt that the Chinese side has conveyed to New Delhi that Xi is likely to come for the leaders’ summit. An advance team from China has arrived for the security and protocol arrangements to prepare for the President’s possible visit.

• It is expected that Xi will come with a large delegation of officials, businessmen and state-backed media representatives. Xi’s attendance at the BRICS summit, the most anticipated visit, will add to efforts by New Delhi and Beijing to restore ties that plummeted after the start of the border standoff in 2020. He last visited India in October 2019 when he travelled to Mamallapuram near Chennai for the second informal bilateral summit of leaders.

• In October 2024, Xi and Prime Minister Narendra Modi met on the sidelines of the BRICS summit in the Russian city of Kazan to start the process of restoration of ties. The disengagement of troops in eastern Ladakh was completed next month.

• More than 50,000 troops are still deployed on either side of the LAC in the region and the process of de-escalation and de-induction of troops has not yet taken place. But in the two years since, the two sides have made significant progress in stabilising relations with direct flights, resumption of visas, easing of curbs on Chinese firms and the revival of the pilgrimage to Kailash Mansarovar.

Do You Know:

• The acronym BRIC was first used in 2001 by Goldman Sachs in their Global Economics Paper, ‘The World Needs Better Economic BRICs’. The paper projected that Brazil, Russia, India, and China would be among the world’s largest economies in the next 50 years or so.

• As a formal grouping, BRIC started after the meeting of the leaders of Russia, India and China in St. Petersburg on the margins of the G8 Outreach Summit in 2006. The grouping was formalised during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in 2006.

• The first BRIC Summit was held in Yekaterinburg, Russia, in 2009. It was decided to include South Africa at the BRIC Foreign Ministers’ meeting in New York in 2010, and accordingly, South Africa attended the 3rd BRICS Summit in Sanya, China, in 2011.

Other Important Articles Covering the same topic:

📍The correct measure of New Delhi’s BRICS presidency

Previous year UPSC Prelims Question Covering similar theme:
2) Consider the following statements with regard to BRICS: (UPSC CSE, 2025)
I. The 16th BRICS Summit was held under the Chairship of Russia in Kazan.
II. Indonesia has become a full member of BRICS.
III. The theme of the 16th BRICS Summit was Strengthening Multiculturalism for Just Global Development and Security.
Which of the statements given above is/are correct?
(a) I and II
(b) II and III
(c) I and III
(d) I only

Previous year UPSC Mains Question Covering similar theme:
📍Compare the significance of IBSA and BRICS in the context of India’s multilateral diplomacy. (UPSC, GS2, 2012)

Nation

Kerala is now officially Keralam

Syllabus:

Preliminary Examination: Indian Polity and Governance

Mains Examination: General Studies II: Indian Constitution—historical underpinnings, evolution, features, amendments, significant provisions and basic structure.

What’s the ongoing story: The Union home Ministry has notified ‘Keralam’ as the new name for the State effective Tuesday. In a gazette notification issued on Tuesday, the home ministry said, “in exercise of the powers conferred by sub-section (2) of Section 1 of the Kerala (Alteration of name) Act, 2026, the Central government hereby appoints the 25th day of August, 2026, as the date on which the provisions of the said Act shall come into force.” earlier this month, President Droupadi Murmu gave assent to the bill.

Key Points to Ponder:

• The Kerala (Alteration of Name) Act, 2026-what are the key highlights?

• What has Kerala sought, and why?

• Does the State Legislature have the power to rename itself?

• Where do the names ‘Kerala’ and ‘Keralam’ come from?

• How did the modern state of Kerala come into being?

• How is the name of a state changed?

• Changing the name of a State is specifically covered under which Article of the Constitution?

• What does Article 3 and Article 4 of the Constitution says?

• “Indestructible Union, destructible States”—discuss in the context of alteration of States in India.

Key Takeaways:

• In June 2024, the state assembly unanimously passed a resolution urging the Union government to take steps under Article 3 of the Constitution to change the state’s name to Keralam. This was the second such resolution passed by the assembly, after the earlier one in August 2023.

• The assembly argued that “Keralam” is the name of the state in Malayalam, while “Kerala” is the name used in English and listed in the First Schedule of the Constitution.

• The Constitution explicitly gives Parliament the power to alter the name of a state.

• Under Article 3, a Bill seeking such a change can be introduced in Parliament only on the President’s recommendation. If the proposal affects a state’s area, boundaries or name, the President refers the Bill to that state’s legislature and gives it an opportunity to express its views. The state legislature’s view, however, is ultimately not binding on Parliament.

• In Kerala’s case, after the Union Cabinet approved the proposal in February 2026, the President referred the proposed Kerala (Alteration of Name) Bill, 2026 to the state assembly. The assembly unanimously agreed with the Bill. The Bill was subsequently introduced in the Lok Sabha on August 10 and passed by voice vote on August 11. The Bill must now be passed by the Rajya Sabha and receive the President’s assent before the change from Kerala to Keralam becomes law.

Do You Know:

• There are several theories regarding Keralam’s etymological roots.
—One of the earliest known mentions of the word occurs in Emperor Ashoka’s Rock Edict II, dated to 257 BCE. The edict reads: “Everywhere in the dominions of King Priyadarsin, Beloved of the gods, as well as those of his frontier sovereigns, such as the Chodas [Cholas], Pandyas, Satiyaputra, Ketalaputra [Keralaputra]…” (translated by epigraphist D R Bhandarkar).
—Keralaputra, literally “son of Kerala” in Sanskrit, refers to the dynasty of the Cheras, one of the three main kingdoms of southern India.
—German missionary and linguist Hermann Gundert, who compiled an early Malayalam-English dictionary, noted a relationship between the Canarese (Kannada) word “keram” and “cheram”, referring to the coastal land between Gokarna (in Karnataka) and Kanyakumari (Tamil Nadu, India’s southern tip). Another proposed derivation is from the Old Tamil root “cher”, meaning to join, and “alam”, meaning a region or land.

• Malayalam-speaking populations were historically spread across different political entities, including the princely states of Travancore and Cochin, and the Malabar district of the Madras Presidency.

• The demand to unite the Malayalam-speaking regions gained momentum under the Aikya Kerala, or United Kerala movement of the 1920s.

• After Independence, the princely states of Travancore and Cochin were integrated in 1949 to form the Travancore-Cochin State.

• The reorganisation of states on linguistic lines subsequently paved the way for a Malayalam-speaking state. Following the recommendations of the States Reorganisation Commission under Syed Fazl Ali, the modern state of Kerala came into existence on November 1, 1956.

• Malabar district and Kasargod taluk were included in the new state, while four southern taluks of Travancore—Tovala, Agastheeswaram, Kalkulam and Vilayankode—and some parts of Shenkottai were excluded and eventually became part of Tamil Nadu.

• In Malayalam, the new state was called Keralam. In English and the Constitution, it remained Kerala.

Other Important Articles Covering the same topic:

📍A question in Keralam: What’s in an ‘m’?

Previous year UPSC Prelims Question Covering similar theme:
3) Which of the following special powers have been conferred on the Rajya Sabha by the Constitution of India? (UPSC CSE, 2012)
(a) To change the existing territory of a State and to change the name of a State
(b) To pass a resolution empowering the Parliament to make laws in the State List and to create one or more All India Services
(c) To amend the election procedure of the President and to determine the pension of the President after his/her retirement
(d) To determine the functions of the Election Commission and to determine the number of Election Commissioners

NITI Aayog: Degrees like BA, B.Sc, B.Com have ‘weak job linkages’, need reforms

Syllabus:

Preliminary Examination: Economic and Social Development

Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

What’s the ongoing story: Amid a renewed push to tweak the skilling architecture in the country, NITI Aayog has flagged that unemployment among graduates remains much higher than the national average, and over-reliance on generic degrees such as BA, B.Sc, and B.Com, which seldom lead to direct jobs, is contributing to the problem.

Key Points to Ponder:

• What is in the report titled ‘Reimagining Skilling for Viksit Bharat’?

• The NITI Aayog report Reimagining Skilling for Viksit Bharat@2047 is primarily concerned with what?

• What do you understand by the term “generic degrees”?

• What is educated unemployment?

• Know the terms- educated unemployment, unemployment, disguised unemployment underemployment and skill mismatch

• What is the role of vocational education and apprenticeships in bridging India’s education–employment gap?

• Why has the expansion of higher education not automatically translated into higher employability in India?

Key Takeaways:

• Making the case for moving towards specialised, job-linked programmes in high-growth sectors such as green industries, electric vehicles, and greater focus on apprenticeships, the think tank said that over 90% of graduates in India are employed in roles not aligned with their qualifications.

• “India’s higher and technical education system faces a fundamental disconnect between what is taught and what the labour market demands. Curricula in most institutions remain outdated and misaligned with evolving industry needs, resulting in degrees, diplomas and certificates that do not consistently translate into employability,” the NITI Aayog said in a report titled ‘Reimagining Skilling for Viksit Bharat’ released on Saturday. Citing data from the Economic Survey 2024-25, it said, “Only 8.25% of graduates are employed in roles aligned to their qualifications.”

‎

• Educated unemployment in the country remains high, with 13% among all graduates and 20.4% of graduate women unemployed, far above the national unemployment rate of 3.2%, it said. Compounding this is the overwhelming inclination toward generic degree programmes with weak job linkages, NITI Aayog said. “Of the 3.4 crore students enrolled in undergraduate programmes, 1.13 crore are in B.A. alone, and combined enrolment in B.A., B.Sc., and B.Com exceeds 2 crore,” the report said.

• In the report, the NITI Aayog also said that 8.7 crore individuals (11% of the population outside the labour force) aged between 15 and 29 fall under the NEET category (Not in Education, Employment or Training). Subsequently, in a clarification issued Tuesday, the Aayog said “the category of NEET in the report refers to those not seeking employment…therefore, it cannot be read as a measure of joblessness or as an addition to the unemployment rate. The unemployed represent an entirely separate category, drawn from a different population base than that used for the NEET estimate.”

• Higher unemployment among educated youth was also flagged in the State of Working India report by Azim Premji University released earlier this year. The report showed that unemployment among graduates below the age of 25 rose from 35% in 1983 to 39% in 2023, and unemployment among graduates between the ages of 25 and 29 also rose from 12% in 1983 to 20% in 2023.

Do You Know:

• The NITI Aayog said that vocational skilling and alternative educational pathways in India suffer from a deep-seated social stigma that actively discourages youth from pursuing technical training, Industrial Training Institutes (ITIs) and diploma programmes, which are widely perceived by parents, peers, and students as low-trust or “second-tier” pathways.

• Salary data from Boston Consulting Group (BCG’s) Higher Education Survey, cited in the NITI report, shows that individuals pursuing a generic undergraduate degree without skilling earn an average starting salary of Rs 22,000 per month, with annual growth of 3.2%, compared to Rs 29,000 per month at the same growth rate for a generic undergraduate with skilling.

• NITI Aayog flagged that a core limitation of many existing skilling programmes is weak outcome orientation. Programmes often prioritise enrolment and completion over placement, progression, or income outcomes, while delivery formats remain inflexible and poorly aligned to the needs of different learner segments. As a result, pathways into in-demand jobs remain weak, and participation remains limited, the report said.

• NITI Aayog said that going forward, standalone skilling programmes need to shift decisively from top-down, supply-driven offerings to demand-driven, outcome-linked and industry-backed models. The report said that general employability and entrepreneurship skilling need to be done at scale, covering digital literacy, financial literacy and workplace readiness.

• The report flagged the need to redesign generic university courses (B.A., B.Sc., B.Com.) into industry-aligned applied specialisations, such as B.A. Hospitality, B.Sc. Applied Technology, and B.Com. Analytics; scale Apprenticeship Embedded Degree Programmes (AEDP) and Work-Integrated Degree Programmes (WIDP).

Other Important Articles Covering the same topic:

📍Unemployment is not about just education

Previous year UPSC Prelims Question Covering similar theme:
4) Increase in absolute and per capita real GNP do not connote a higher level of economic development, if (UPSC CSE, 2018)
(a) industrial output fails to keep pace with agricultural output.
(b) agricultural output fails to keep pace with industrial output.
(c) poverty and unemployment increase.
(d) imports grow faster than exports.

Previous year UPSC Mains Question Covering similar theme:
📍Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements (UPSC, GS3, 2023)

The Ideas Page

Our Central Asia strategy needs less romance, more realism

Syllabus:

Preliminary Examination: Current events of national and international importance.

Main Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s Interest

What’s the ongoing story: C. Raja Mohan Writes- India cannot match China’s infrastructure spending, Russia’s geographic advantages, Europe’s financial resources or Türkiye’s direct access across the Caspian. Nor does it need to. Sustained political attention should be matched by a practical economic agenda focused on areas where India can contribute.

Key Points to Ponder:

• What is India’s Central Asia Policy?

• The Central Asia region (CA) comprises the countries of Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan-True or false?

• Map Work-Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan

• India’s strategic Interest in Central Asia-Know in detail

• What is India-Central Asia dialogue?

• Importance of Central Asian Region for India?

• India’s Bilateral Relation with each Countries like Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan etc-know in brief

• What is Ashgabat Agreement and International North South Transit Corridor (INSTC)?

Key Takeaways:
C. Raja Mohan Writes-

• When the Soviet Union dissolved in 1991 and five new republics emerged in Central Asia, there was extraordinary enthusiasm in Delhi about reconnecting with a region that had deep historical ties with India. But India’s lack of direct access, limited national capabilities, and persistent geopolitical headwinds have complicated that engagement.

• India was not alone in imagining a grand reconnection between Central and South Asia. After the 9/11 attacks, the Bush administration bet that Afghanistan’s long-term stability could be secured by reconnecting the two regions.

• In 2006, Washington reorganised the State Department to bring the Central Asian states together with Afghanistan and the Subcontinent in a new South and Central Asian bureau. The hope was that Afghanistan could become a natural bridge between the two regions. That vision proved difficult to realise amid Afghanistan’s internal and external conflicts and the enduring tensions between India and Pakistan.

• Prime Minister Narendra Modi, who travels to Central Asia this week for a bilateral visit to Uzbekistan and the Shanghai Cooperation Organisation summit in Kyrgyzstan, will find a region very different from the one he toured in 2015. Four broad trends stand out.

• The first is the growing geopolitical agency of Central Asia. Long viewed as five vulnerable landlocked states — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — on the periphery of Russia and China, they are acquiring greater internal coherence.

• Since 2018, the five have met regularly at the summit level in the consultative meetings of the heads of state of Central Asia. They have now signed a friendship treaty among themselves and plan to give it some organisational substance and turn the region into a genuine Central Asian community. The Central Asian Five invited Azerbaijan to form the C-6 that links Central Asia more closely to the Caucasus and Türkiye.

• Equally important has been the settlement of the long-running border disputes in the Fergana Valley among Uzbekistan, Kyrgyzstan, and Tajikistan. Growing intra-regional trade has reinforced the new political cooperation. Central Asia is becoming more of a region in its own right rather than merely the sum of five post-Soviet republics.

• Second is the diversification of great-power relations. The traditional “Great Game” framework — external powers competing for control over a passive Central Asia — is utterly inadequate. During 2025, Central Asian leaders held summits with the European Union, China, Russia, the United States and Japan. Central Asia has never been more courted — and perhaps never less amenable to exclusive relationships.

• Russia remains an important partner in security, but the Ukraine war and China’s rising economic influence have weakened Moscow’s former dominance. Washington has returned with a new emphasis on commerce, critical minerals and energy corridors. Europe, Japan and others are also expanding their engagement. Central Asia’s answer is the familiar “multi-vector” strategy — not unlike India’s own multi-alignment. It engages all and commits exclusively to none.

• The third trend is Central Asia’s growing entanglement with the Greater Middle East. Although predominantly Muslim, the region’s political and cultural orientation was long shaped by its Russian and Soviet past. That balance is changing.

• At the Central Asian summit with the US in Washington last November, Kazakhstan announced its accession to the Abraham Accords. Azerbaijan, Kazakhstan and Uzbekistan signed the charter of Trump’s Board of Peace at Davos in January. Gulf capital has become increasingly important across Central Asia. Türkiye has transformed the Organisation of Turkic States from a largely cultural forum into an instrument for wider political, economic and defence cooperation.

Do You Know:

• C. Raja Mohan Writes—Delhi enjoys considerable goodwill in Central Asia, but geography continues to constrain its ambitions. India has no direct land access. Pakistan blocks the obvious overland route, while Afghanistan remains unstable. Chabahar and the International North-South Transport Corridor offered an alternative, but the growing conflict between Iran and the US has complicated their prospects. India’s one hard-built connectivity node in the region now sits idle.

• According to Britannica, the Central Asia is a landlocked region in the heart of the Asian continent made up of five former Soviet republics. The region consists of five nations, often called the “-stans”—Kazakhstan (the largest country), Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

• According to ORF, India’s Connect Central Asia Policy is a broad diplomatic, economic, and strategic framework launched in 2012 to deepen engagement with the five Central Asian Republics—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Other Important Articles Covering the same topic:

📍When Central Asia calls

Previous year UPSC Prelims Question Covering similar theme:
5) India is one of the founding members of the International North-South Transport Corridor (INSTC), a multimodal transportation corridor, which will connect (UPSC CSE, 2025)
(a) India to Central Asia to Europe via Iran
(b) India to Central Asia via China
(c) India to South-East Asia through Bangladesh and Myanmar
(d) India to Europe through Azerbaijan

Previous year UPSC Mains Question Covering similar theme:
📍Critically analyse India’s evolving diplomatic, economic, and strategic relations with the Central Asian Republics (CARs), highlighting their increasing significance in regional and global geopolitics. (UPSC, GS2, 2024)
📍A number of outside powers have entrenched themselves in Central Asia, which is a zone of interest to India. Discuss the implications, in this context, of India’s joining the Ashgabat Agreement, 2018. (UPSC, GS2, 2018)

Repairing ties with Nepal: A strategy of two hands, 10 fingers

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: India and its neighbourhood- relations.

What’s the ongoing story: Safi Ahsan Rizvi Writes- The challenge is to embed arrangements that expand Nepal’s choices while assuring India that intense economic and technology integration will not create new security vulnerabilities

Key Points to Ponder:

• What is the “two hands, ten fingers” approach that the author emphasizes?

• What is the least developed countries (LDC) status?

• Which countries are considered the least developed countries?

• Why does LDC graduation matter?

• Why are India-Nepal rivers strategically important?

• How can India use economic interdependence to strengthen its relationship with Nepal without creating perceptions
of economic dependence?

• “Nepal’s LDC graduation presents both risks and opportunities for India”-What is your opinion?

Key Takeaways:

• Nepal is scheduled to lose its Least Developed Country (LDC) status on November 24, but has sought a three-year deferral from the UN, citing delays in transition. While it is likely to receive the deferral, given Nepal’s high credibility in the comity of nations, the deadline will come again. In 2024, it adopted the Smooth Transition Strategy (STS) to ensure sustainable graduation from LDC status by 2030, while recognising that remittances currently support consumption, reserves and imports, but have not yet engendered domestic investment or a surge in exports.

• The appropriate move to further the STS could be a Nepal-India two-hand strategy: Economics and technology. Recent bilateral engagements appear to have eased aberrations in relations. Now is the most opportune time to jointly strive to move Nepal out of its low-investment, remittance-led growth, onto a higher, sustainable economic paradigm.

• LDC status brought preferential tariffs, market access and concessional financing. Withdrawal would affect labour-intensive, high-growth export sectors such as garments, synthetic textiles and carpets.

• The WTO expects a ~9 per cent increase in tariffs, while the UN’s International Trade Centre estimates a loss of ~4
per cent in exports. Nepal possesses two key safety valves to mitigate the impact.

• One, macroeconomic buffers stronger than many comparable economies, and two, bilateral tariff agreements with India, including the foundational agreement on a fixed NPR-INR rate of 1.6 since the 1990s. These factors have contributed to Nepal’s monetary stability, especially during the Global Financial Crisis (2008), Taper Tantrum (2013), and the Covid pandemic (2020-21).

• Nepal has grown at about 4 per cent annually for three decades, supported by low debt, 18 months’ worth of FX reserves and $15bn in annual remittances. However, the most prominent risk to a promising economy remains its low-investment trap.

• To diversify, Nepal opened up to the BRI in 2017, perhaps worried about over-dependence on its southern partner. It now conducts one-sixth of its trade, mostly imports, with and through China. However, Himalayan heights make northern connectivity expensive and prone to weather-related disruptions. Many Chinese-backed projects are delayed, in contestation over the grants-versus-debt question.

Do You Know:

• India and Nepal have one of South Asia’s most unusual relationships: Exceptionally intimate in geography and society, with an open border. The challenge is to embed arrangements that expand Nepal’s choices while assuring India that intense economic and technology integration will not create new security vulnerabilities.

• Least Developed Countries (LDCs) are low-income nations designated by the United Nations as facing severe, long-term structural barriers to sustainable development.

Other Important Articles Covering the same topic:

📍‘Momentary differences’: Nepal envoy for better economic ties

Previous year UPSC Prelims Question Covering similar theme:
6) Consider the following statements in respect of BIMSTEC: (UPSC, CSE, 2025)
I. It is a regional organization consisting of seven member States till January 2025.
II. It came into existence with the signing of the Dhaka Declaration, 1999.
III. Bangladesh, India, Sri Lanka, Thailand and Nepal are founding member States of BIMSTEC.
IV. In BIMSTEC, the subsector of ‘tourism’ is being led by India.
Which of the statements given above is/are correct?
(a) I and II
(b) II and III
(c) I and IV
(d) I only

Previous year UPSC Mains Question Covering similar theme:
📍Project ‘Mausam’ is considered a unique foreign policy initiative of Indian Government to improve relationship with its neighbours. Does the project have a strategic dimension? Discuss. (UPSC, GS2, 2015)

Explained

Why govt jobs are few: The narrow selection pipeline

Syllabus:

Preliminary Examination: Economic and Social Development

Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

What’s the ongoing story: The dream of a “sarkari naukri” holds a powerful draw in India. Every year, crores of people apply for a far fewer number of job vacancies in the central and state governments.

Key Points to Ponder:

• What is the size of the government workforce?

• How does government recruitment work?

• How many people can it employ?

• How many government jobs are there ?

• How does central government recruitment happen?

• Who frames policies for recruitment in the central government?

• What is the system in state governments?

• What’s behind the appeal of government jobs?

Key Takeaways:

• Behind this appeal — among youth, technocrats, and even those in professions such as medical and engineering — are economic realities such as the lack of private jobs, social psychology and career benefits that private-sector employment can rarely match. The lack of systemic support for entrepreneurship also makes government jobs a secure haven. The recent protests over paper leaks and government exams, especially in Jharkhand, are a reflection of this appeal.

• Besides technocrats and government staff such as doctors, the government workforce is primarily divided into three groups (Group A, B and C). There was earlier a Group D category (peons) as well, but it has been merged with Group C. Retirement is a regular process, and so is the creation of new posts and the filling up of existing ones.

• According to data from the Department of Expenditure’s website, the total number of employees in the Union government — including Union Territories and missions abroad — as on March 1, 2023, was 30.62 lakh, against a sanctioned strength of more than 40 lakh. This is just the number of permanent employees — contractual employees and consultants are not included in this figure.

How central government recruitment happens

• The Union government spent Rs 2.95 lakh crore on the salary of these employees in 2023-24. More than 80% of this figure went towards defence, railways, postal services and home affairs. While there is no accurate figure of all government employees of centre and states, it is estimated that this number is more than 1.5 crore — including the civil administration, armed forces, police, healthcare workers, teachers and others.

Do You Know:

• Central government recruitments are carried out by agencies such as the Union Public Service Commission (UPSC), Staff Selection Commission (SSC), the Ministry of Defence (including the Army, Navy and Air Force), the Ministry of Railways, public sector undertakings and universities, among others. Every year, several crore people attempt to enter the central government service through one of these routes. Only around 1.20 lakh make it each year.

• The Ministry of Personnel, Public Grievances and Pensions, which comes under the Prime Minister, formulates policies pertaining to recruitment, regulation of service conditions, and deputation of personnel. It also advises all central government organisations on issues pertaining to personnel management. The Department of Personnel and Training (DoPT), one of the departments under this ministry, frames policies and oversees recruitment for the central government.

• While recruitments for Union Territories are made by central government agencies itself, the recruitment for three all-India services (IAS, IPS, Indian Forest Service or IFoS) have a centre-state nature — the UPSC allots recruits state cadres and they work under state governments. A limited percentage of officers are always on central deputation to serve under the Union government.

Other Important Articles Covering the same topic:

📍Deeper jobs problem: Stir a sign that India’s demographic dividend is at risk

The century-long evolution of the demand for a Gorkha state

Syllabus:

Preliminary Examination: Indian Polity and Governance

Mains Examination: General Studies II: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers

What’s the ongoing story: The Union Ministry of Home Affairs on Saturday (August 22) constituted a high-level committee following a key meeting of Gorkha leaders with Union Home Minister Amit Shah and West Bengal government representatives in Siliguri.

Key Points to Ponder:

• What are the roots of the Gorkhas’ demand?

• What is the history of the Gorkhaland movement?

• What is the political landscape in the Darjeeling Hills today?

• What will the newly formed committee panel do?

• The Sixth Schedule of the Constitution provides for autonomous administration primarily in tribal areas of which States?

• Do you think that the Gorkhaland movement illustrates both the strengths and limitations of India’s flexible federalism?

Key Takeaways:

• Tasked with preparing a framework for a “permanent political solution” to the Gorkha issue, the committee will address a contentious demand whose origins can be traced back over 100 years.

• The Gorkhas’ movement for a separate administrative identity is among the oldest of its kind in India. Darjeeling and its adjacent areas — including Kalimpong, Kurseong, the Terai, and the Dooars — are culturally, ethnically, and linguistically distinct from the rest of West Bengal. Because the region’s population primarily speaks Nepali and possesses distinct physical features, residents frequently face racial profiling and are wrongly labelled as citizens of Nepal or China.

• This persistent alienation has fueled a deep-seated identity crisis, driving the demand for a separate state to affirm their identity as Indian citizens. But its origins go further back. The movement began in 1907, when the Darjeeling Hillmen’s Association, led by Sonam Wangel Laden La, submitted a formal petition to the Minto-Morley Reforms Committee seeking to separate Darjeeling and Jalpaiguri from Bengal.

Do You Know:

• In the 1980s, the demand for a separate state took on a violent, high-profile dimension under Subhas Ghising, founder of the Gorkha National Liberation Front (GNLF), who coined the term “Gorkhaland”.

• The resulting unrest led to the creation of the Darjeeling Gorkha Hill Council (DGHC) in 1988, a semi-autonomous body that governed the hills for 23 years. In 2007, politician Bimal Gurung formed the Gorkha Janmukti Morcha (GJM), reigniting the statehood demand and leading to the establishment of the Gorkha Territorial Administration (GTA) in 2011 to replace the DGHC. Agitations flared up again in 2013 after the Centre recommended carving out Telangana from Andhra Pradesh, prompting widespread strikes and central security deployment.

• The hills experienced their longest and most intense period of unrest in 2017, after the West Bengal government announced Bengali as a mandatory language in state-run schools across the region. On June 8 that year, as the state cabinet held a historic meeting in Darjeeling, GJM supporters clashed with security forces, burning outposts and prompting military intervention. The violent agitation lasted 104 days, resulting in 11 protestor deaths, bomb blasts in Darjeeling and Kalimpong that claimed the life of a civic volunteer, and a complete shutdown of the region’s tourist economy.

Other Important Articles Covering the same topic:

📍Tracing the history of Gorkhaland movement: Another crisis triggered by language

Previous year UPSC Prelims Question Covering similar theme:
7) With reference to Scheduled Areas in India, consider the following statements: (UPSC CSE, 2023)
1. Within a State, the notification of an area as Scheduled Area takes place through an Order of the President.
2. The largest administrative unit forming the Scheduled Area is the District and the lowest is the cluster of villages in the Block.
3. The Chief Ministers of the concerned States are required to submit annual reports to the Union Home Ministry on the administration of Scheduled Areas in the States.
How many of the above statements are correct?
(a) Only one
(b) Only two
(c) All three
(d) None

 

PRELIMS ANSWER KEY

1.(c)  2.(a)  3.(b) 4.(c)  5.(a) 6.(d) 7.(b)

  

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