UPSC Key: New Defence Procurement Manual, Operation Polo, and Manki-Munda system

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-II, III: Government policies and interventions for development in various sectors and issues arising out of their design and implementation, defence technology.

What’s the ongoing story: Defence Minister Rajnath Singh Sunday approved the Defence Procurement Manual (DPM) 2025 — the document governing defence revenue procurements including those for spares and ammunition — which adds a new chapter to promote self-reliance through innovation and indigenisation, among other changes.

Key Points to Ponder:

— What is the Defence Procurement Manual?

— What are some important developments in India’s defence sector? 

— What are the key issues and challenges with India’s defence sector?

— Read about the Defence Acquisition Procedure (DAP) 2020. 

— What is the significance of boosting indigenisation in the defence sector?

— What does India’s rising defence expenditure reveal about its strategic priorities?

— How does DAP 2020 emphasise ‘Make in India’ in the defence sector?

— What are the recent steps taken by the Ministry of Defence to streamline procurement timelines?

— Defence procurement in India has often faced delays due to extensive trial processes – discuss.

Key Takeaways:

— Last promulgated in 2009, this manual was under revision in the Ministry in consultation with the Armed Forces and other stakeholders.

— The revised DPM aims to further streamline, simplify, enable and rationalise the revenue procurement process. The Defence Acquisition Procedure (DAP) 2020 — which governs all capital procurements – is also being revised to streamline big-ticket defence acquisitions.

— “The new manual is aimed at achieving self-reliance in fulfilling the needs of the Armed Forces under Revenue Head (Operations & Sustenance Segment),” the Defence Ministry said in a statement. It added that it will foster jointness among the three Services and help maintain the highest level of military preparedness through expeditious decision-making and ensure the timely availability of requisite resources to the Armed Forces at an appropriate cost.

— The new DPM discusses promoting self-reliance through innovation and indigenisation to help in the indigenisation of defence items or spares through in-house designing and development in collaboration with public or private industries, academia, IITs, IISc and other private institutions of repute by utilising the talent of young bright minds.

— The new document also addresses the concerns of individuals or companies who want to venture into the defence sector by relaxing many provisions of development contracts. For instance, it makes a provision not to levy Liquidity Damages (LD) during the development phase.

— A critical provision has also been introduced to provide assured guarantee of orders in terms of quantity, up to five years and beyond that up to another five years in special circumstances.

— Another provision has been introduced to provide requisite support through hand-holding by the defence services in terms of sharing of technical know-how, existing equipment, to ensure successful development.

— The new document also facilitates and streamlines procurements based on government-to-government agreements through adequate provisions, the defence ministry noted.

— According to the defence ministry, the ease of doing business has been further strengthened in the document, which aims to boost ‘Atmanirbharta’ in defence manufacturing and technology.

— The DPM lays down the guiding principles and provisions for all revenue procurements in the Ministry valuing around Rs 1 lakh crore for the current financial year.

— The statement noted that the revised document will empower the Competent Financial Authorities at field level/lower formations, expedite decision making, avoid movement of files between lower-higher level and ensure timely payment to the suppliers.

Other Important Articles Covering the same topic:

📍How India’s defence spending is aligned with its regional ambition

 

EXPLAINED 

Op Polo: How the ambitious Hyderabad Nizam was bested 

Syllabus:

Preliminary Examination: History of India and Indian National Movement.

Mains Examination: General Studies-I: Post-independence consolidation and reorganisation within the country.

What’s the ongoing story: September 13 marks the 77th anniversary of Operation Polo, the military operation launched by newly independent India to annex the state of Hyderabad. Led by Major General Jayanto Nath Chaudhuri, Operation Polo lasted less than four days and brought to heel the Nizam who had been resolute in his decision not to accede to India.

Key Points to Ponder:

— What was the background against which Operation Polo was launched?

— How was Operation Polo conducted on the ground?

— When did Hyderabad forces surrender?

— What were the challenges related to the integration of Princely States post-independence?

— Integration of Princely States After Independence – What was the status of Hyderabad?

— Who were the Razakars?

— Sardar Vallabhbhai Patel and the Instrument of Accession and Standstill Agreement – Connect the dots.

— Why is Sardar Vallabhbhai Patel called as “Iron Man of India”?

Key Takeaways:

— Hyderabad’s ambition to remain an independent state after the British left, was a cause of major concern for the Indian government. If realised, it could cut off north India from the south. Reginald Coupland, a constitutional expert cited by historian Ramachandra Guha in India after Gandhi (2007), had aptly described the situation: “India could live if its Muslim limbs in the north west and north east were amputated, but could it live without its midriff?”

— Sardar Vallabhbhai Patel put it more bluntly, famously saying that an independent Hyderabad would constitute a “cancer in the belly of India”.

— Among the 500-odd princely states of India, the state of Hyderabad was one of the largest. It was spread over more than 80,000 square miles and inhabited by approximately 16 million people, belonging to three separate linguistic groups — Telugu, Kannada and Marathi. While the majority of its population was Hindu, its ruler was a Muslim, who held the hereditary title of the Nizam.

— In 1947, Hyderabad was under the seventh Nizam, Mir Usman Ali, who had been enthroned as far back as 1911. Not only was he one of the richest men in the world, he also held the repute of being one of the most important Muslim figures. 

— The Nizam had also contributed generously to the British during World War I. In recognition of his efforts, the Nizam of Hyderabad became the only ruler of a princely state to be conferred the title, ‘his exalted highness’ . 

— With independence looming in the horizon, the Nizam was determined to hold on to more than just his personal wealth. He wanted independence for his state, and the opportunity to forge direct relations with the Crown.

— Patel moved patiently with Hyderabad. In November 1947 a stand still agreement was signed between both the parties, agreeing to the fact that the ties between the two continue the same as they did under the British.

— While India and Hyderabad continued with their negotiations, a revolt was brewing within the state against the Nizam. Under the Nizam an exploitative and communal agricultural structure had come to be established. While a movement of resistance against this lopsided state of affairs had been gathering since the 1920s, it reached its zenith in 1946.

— When the discussions around accession started out, the agitators were inclined to join India. They were backed by the Hyderabad State Congress.

— On the Nizam’s side was the Ittihad-ul-Muslimeen, an Islamic fundamentalist organisation, which under the leadership of Kasim Razvi, an Aligarh-based lawyer, was keen on safeguarding the position of Muslims in administration and politics. 

— Guha in his book writes that “Under Razvi the Ittihad had promoted a paramilitary body called the ‘Razakars’ whose members marched up and down the roads of Hyderabad, carrying swords and guns.” They were staunch supporters of the Nizam, who went about brutally suppressing the movement against him, raiding and plundering villagers, and killing anyone who came across as a potential agitator.

— The Indian Army entered Hyderabad on the morning of September 13, 1948. Chaudhuri’s forces consisted of two infantry brigades, one armored brigade, and a smaller strike force. The army was further supplemented by armed policemen from various provinces and states of the Indian Union. Meanwhile the Indian Air Force conducted aerial bombing raids.

— By September 17, the Indian army was on the outskirts of Hyderabad city, having easily overpowered the Hyderabad army and the razakars. The Nizam surrendered and agreed to accede to the Indian union. 

— He made a speech on the radio on the night of September 17, announcing a ban on the razakars and advising his subjects to “live in peace and harmony with the rest of the people in India.”

— The Nizam remained as the titular head of Hyderabad, until December 1949, under a military administration led by Chaudhuri. Thereafter an unelected civilian government was appointed by the Ministry of States. Elections were finally held in 1952.

Other Important Articles Covering the same topic:

📍How Op Polo was conducted

📍The horses that led Operation Polo

UPSC Prelims Practice Question Covering similar theme:

(1) Maj Gen SA El Edroos, Mir Laik Ali and Maj Gen Jayanto Nath Chaudhuri are all associated with which of the following important events in history?

(a) Operation Cactus Lily

(b) Operation Ablaze

(c) Operation Blue Star

(d) Operation Polo

(2) With reference to Operation Polo, consider the following statements:

1. It was the military operation launched by India to annex the state of Goa.

2. It was led by General J N Chaudhri.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

SC & Presidential reference 

Syllabus:

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

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 and finances up to local levels and challenges therein.

What’s the ongoing story: The Supreme Court last week finished hearing arguments and reserved its opinion in the crucial reference made by President Droupadi Murmu on the powers of the President and Governors in giving assent to Bills.

Key Points to Ponder:

— What are the constitutional provisions related to the Governor and President?

— What was the April 8 decision given by the Supreme Court?

— What is the advisory jurisdiction of the Supreme Court

— What is article 143(1) of the Constitution?

— Can the SC decline to answer a presidential reference?

— What are the various powers of the Governor? 

— What are the discretionary powers of the Governor?

— Read about Articles 32, 200 and 201.

— What are the powers of the President of India?

Key Takeaways:

— The reference, invoking the apex court’s advisory jurisdiction, was made following its ruling in April, which held that Tamil Nadu Governor R N Ravi’s delay in granting assent to 10 Bills was unconstitutional. The court exercised its inherent powers under Article 142 to grant assent to the pending Bills and set timelines for Governors and the President to act after Bills reach their office.

— Article 143(1) of the Constitution empowers the President to seek the SC’s opinion on questions of law or fact which are of public importance. The court’s opinion will be “independent advice” for the President to act on the issue. However, in essentially questioning whether the court could have set the timelines for the President and Governors, the reference has turned into a flashpoint between the executive and the judiciary.

— Nature of reference: In its advisory jurisdiction, the SC can choose to decline giving its opinion. In the past, the court has returned at least two references without answering. Therefore, the first hurdle for the Centre is to satisfy the SC that the reference made is valid and ought to be answered.

— The states argued that the reference must be rejected since it seeks to relitigate the issue, and is in the nature of an appeal against the SC ruling in April. A ruling by the SC, no matter the Bench strength, is the law of the land. There is no appeal against the ruling, and although the Constitution allows a review, it is done by the same judges who delivered the verdict.

— Solicitor General Tushar Mehta, however, stressed that the court’s advisory jurisdiction under Article 143 was distinct, and could be used to clarify constitutional doubts, even if past rulings existed.

— Governor’s powers: The states said that the Governor is bound by the aid and advice of the state’s Council of Ministers under Article 163 of the Constitution, emphasising that governance must reflect the popular will, which cannot be usurped by the Governor. This argument is in line with several constitutional rulings of the SC over the decades that have reigned in the powers of the Governor, giving primacy to the elected government.

— The Centre, on the other hand, argued that the Governor’s office has a distinct place in the constitutional framework, and was not intended to be a “postman” or a “showpiece.” Mehta said that amendments in the Constituent Assembly seeking to remove all discretionary powers were explicitly rejected.

— Governor’s veto: Central to the issue of the Governor’s powers in the legislative process is what happens when he sits on a Bill indefinitely. The SC, in its April ruling, envisioned this scenario and concluded that a Governor cannot exercise a “pocket veto” over the elected government.

— However, the Centre, in arguing the Presidential reference, told the SC that a “Bill, if withheld, will fall through”. The government made references to the colonial Government of India Act, 1935, where the Governor’s “initial withholding was an absolute veto.” Mehta told the court that similar language was later adopted in the Constitution.

— Judicial enforcement of timelines: The Centre had strong reservations on the SC’s April ruling in setting timelines for Governors and the President. It said that imposing “straightjacket” timelines for Governors to grant assent would amount to a judicial amendment of the Constitution and encroach on constitutional functions.

— Attorney General R Ventakaraman pointed out that the Constituent Assembly had consciously dropped proposed timelines for assent, replacing a six-week limit with the phrase “as soon as possible”.

— States’ fundamental rights: The Centre was also strongly opposed to the SC’s April ruling allowing states to file writ petitions under Article 32 of the Constitution. Mehta submitted that Article 32 remedies were meant to enforce fundamental rights, and states could not “claim them for themselves”. He also argued that the Governors do not represent the central government.

Do You Know:

— In a reference to the Supreme Court, President Droupadi Murmu has posed 14 crucial questions over the top court’s April 8 verdict that fixed timelines for Governors and the President to act on Bills passed by state Assemblies.

— Seeking the Supreme Court’s opinion under Article 143(1), Murmu sought to know whether the actions of the Governors and President are justiciable and whether such timelines can be imposed on them in the absence of any such provision in the Constitution.

— The reference pointed out that “there are conflicting judgments of the Supreme Court as to whether the assent of the President of India under Article 201 of the Constitution of India is justiciable or not”.

— Under Article 145 (3), when the President makes a reference for the court’s opinion, it is placed before a five-judge bench. 

Other Important Articles Covering the same topic:

📍The President’s reference

📍Knowledge Nugget: Why is the Governor’s right to withhold assent to a Bill important for UPSC Exam?

Previous year UPSC Prelims Question Covering similar theme:

(3) Which one of the following statements is correct? (UPSC CSE 2013)

(a) In India, the same person cannot be appointed as Governor for two or more States at the same time

(b) The Judges of the High Court of the States in India are appointed by the Governor of the State just as the Judges of the Supreme Court are appointed by the President

(c) No procedure has been laid down in the Constitution of India for the removal of a Governor from his/her post

(d) In the case of a Union Territory having a legislative setup, the Chief Minister is appointed by the Lt. Governor on the basis of majority support

(4) Consider the following statements: (UPSC CSE 2010)

1. In appellate jurisdiction, the Supreme Court has exclusive power to adjudicate upon disputes involving elections of the President and the Vice President.

2. In advisory jurisdiction, the President has the power to seek an opinion from the apex court under Article 143 of the Constitution

3. In original jurisdiction, the Supreme Court hears appeals from lower courts.

Which of the statement(s) given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 2 and 3 only

Subject of recent protest, history of Kolhan tribe’s Manki-Munda system

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies-I, II: Indian History, Government policies and interventions. 

What’s the ongoing story: On Tuesday (September 9), adivasis from the Ho tribe staged a protest in Jharkhand’s West Singhbhum district against the Deputy Commissioner (DC), accusing him of interfering with their traditional self-governance system by removing village heads, known as Mundas.

Key Points to Ponder:

— What is the Manki-Munda system?

— Who are the Ho tribe and where are they mainly found in India?

— What are the roles and responsibilities of a Munda and a Manki in the traditional governance system?

— How did the arrival of the East India Company affect the traditional governance system of the Ho tribe?

— Read about the Battle of Plassey,  Battle of Buxar, and Treaty of Allahabad.

— What was the Permanent Settlement Act?

— What were the Ho revolt and the Kol revolt?

— Read about Wilkinson’s Rules?

Key Takeaways:

— The district administration has since clarified that the protest was a result of rumor mongering on social media, and that Mankis and Mundas remain integral to the revenue system. But adivasi concerns persist, with many fearing the loss of their autonomy and a traditional system.

— This conflict threatens a century-old balance between the indigenous governance system, the so-called Manki-Munda system, and the state administration in Ho areas of Jharkhand’s Kolhan region.

— For centuries before the arrival of the British, the Ho tribe of Jharkhand’s Kolhan region lived under their traditional, decentralised system of governance which revolved around the social and political responsibilities of various stakeholders.

— The Munda, or the head of the village, was responsible for resolving socio-political disputes at the village level. Each village had one Munda, appointed hereditarily. The Manki headed the pir, which generally consists of 8 to 15 villages. If cases were not resolved by the Munda, they moved upwards to the Manki.

— The Manki and Munda had no responsibilities for revenue or land-related issues. The system was purely an internal, self-governing mechanism, with no sovereign authority outside or the concept of paying taxes. Then came the East India Company, and with it, taxes.

— After the Battle of Plassey in 1757, the Company quickly expanded its territory and influence. In the aftermath of the Battle of Buxar (1764), the Company signed the Treaty of Allahabad with the Mughal emperor Shah Alam II in 1765, which granted it diwani rights (right to collect taxes) over the province of Bengal (including present day Odisha, Bihar and Jharkhand).

— In 1793, the Company administration introduced the Permanent Settlement Act, which allotted land deeds to zamindar and set land revenue demands on them (which they had to pay to the Company). These demands were set at an amount fixed forever but higher than most zamindars’ capacity to pay.

— As a result, there was immense pressure on zamindars to be as extractive as possible. In Kolhan, they began actively seizing Ho lands to bring them under direct control. This system would eventually trigger a number of early-19th century adivasi revolts, such as the Ho revolt (1821-22) and the Kol revolt (1831-32).

— After repeated failures to subdue the Ho people through brute force, the British decided to arrive at a strategic compromise by recognising and co-opting the Manki-Munda system.

— The British appointed Captain Thomas Wilkinson as their Political Agent in the Kolhan Government Estate (KGE), an administrative unit created in 1837 to control the Ho-dominated region.

— In 1833, he drafted a set of 31 rules, (henceforth, ‘Wilkinson’s Rules’) meant to be the “guiding principles” for the Ho community’s leaders. This was the first time that the traditional system of the Ho community — or for that matter any adivasi community — had been formally codified.

— The KGE was dissolved after 1947, but Wilkinson’s Rules are still applicable. While general civil procedure laws were enacted in India after Independence, Kolhan was largely exempted.

— In Feb 2021, the Jharkhand government recognised the traditional judicial system known as the Nyaya Panch to work on revenue related activities such as tax collection and reporting of land purchase and sale, maintaining law & order and settlement of disputes.

— To become Munda or Manki, a son inherits the role from his father. This has created problems in recent times, as many of these traditional leaders are not formally educated, making it difficult for them to navigate the modern, document-based administrative system. This is what drives unsatisfied villagers to the district administration.

Do You Know:

—The Kols, tribal people from the Chhota Nagpur area, rose in revolt against the British in 1831. The trigger here was gradual takeover of tribal land and property by non-tribal settlers who were aided by new land laws.

—The simmering discontent over economic exploitation of the original inhabitants, led to an uprising led by Buddhu Bhagat, Joa Bhagat and Madara Mahato among others. The Kols were joined by other tribes like the Hos, Mundas and Oraons.

Other Important Articles Covering the same topic:

📍How Jharkhand’s tribes have fought for their rights through centuries

Previous year UPSC Mains Question Covering similar theme:

Examine critically the various facets of economic policies of the British in India from the mid-eighteenth century till independence. (UPSC CSE 2014)

What is the Scarborough Shoal and what is China planning there? 

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 Interest.

What’s the ongoing story: The Philippines has reacted strongly to China’s announcement it would establish a nature reserve in the South China Sea at the disputed Scarborough Shoal, site of years of standoffs between the two countries.

Key Points to Ponder:

— What is the significance of Scarborough Shoal?

— What is the Scarborough Shoal issue?

— What is the dispute between the Philippines and China over the South China Sea?

— What is an exclusive economic zone?

— Read about the Permanent Court of Arbitration.

— What is the South China Sea dispute?

— What is the ‘nine-dash line’?

— Read about India’s bilateral relations with China and the Philippines.

— Map work: Locate Scarborough Shoal and other disputed islands in the South China Sea on map.

Key Takeaways:

— Named after a British ship grounded on the atoll nearly three centuries ago, the Scarborough Shoal is one of Asia’s most contested maritime features and a flashpoint for diplomatic flare-ups over sovereignty and fishing rights.

— Located 200 km (124 miles) off the Philippines and inside its exclusive economic zone, the shoal is coveted for its bountiful fish stocks and a stunning turquoise lagoon that provides safe haven for vessels during storms. It is named Huangyan Island by Beijing, while Manila calls it the Panatag Shoal, or Bajo de Masinloc.

— Its position is strategic for Beijing, sitting in the middle of the South China Sea and near shipping lanes carrying more than $3 trillion of annual commerce. Activities there are closely watched by the United States and other major powers.

— China has approved creation of a national nature reserve at Scarborough Shoal that it says is to preserve a 3,524-hectare (8,708-acre) coral reef ecosystem. It would cover the entire northeastern side of the triangle-shaped atoll, with close proximity to the sole entrance for larger vessels.

— The announcement angered the Philippines, which for years has accused China of activities that damage coral and marine life, including clam harvesting, and it is exploring the possibility of further international arbitration over environmental issues. Beijing has made similar accusations against Manila.

— China could be met by scepticism and international concern about its underlying motives. There have long been expectations China might one day build a manmade island on Scarborough Shoal, as it has on seven submerged reefs in the Spratly Islands, some equipped with radar, runways and missile systems.

— The Philippines and China lay claim to the Scarborough Shoal but sovereignty has never been established and it is effectively under Beijing’s control. Filipino boats operate there but are dwarfed by China’s presence.

— China seized the shoal in 2012 after a standoff with the Philippines and has since maintained a deployment there of coast guard and fishing trawlers. Manila has said some of the trawlers at the shoal and other disputed areas of the South China Sea are operated by Chinese maritime militia, which Beijing has never acknowledged.

— A landmark ruling on various South China Sea issues by the Permanent Court of Arbitration in 2016 went in favour of Manila but establishing sovereignty over Scarborough Shoal was not within its scope. The ruling said Beijing’s blockade there violated international law, however, as it was a traditional fishing ground for several countries, including China, the Philippines and Vietnam.

— Tensions have simmered for a while at the shoal and multiple incidents in recent years have caused diplomatic rows, but none escalated into armed conflict.

— A deterrent might be the United States, which has taken its defence alliance with the Philippines to a new level under Marcos. Any kind of military response by China would increase the stakes considerably.

— The Philippines and United States have a 1951 Mutual Defence Treaty under which Washington would defend its ally in the event of attack, a commitment U.S. defence chiefs reinforce often. Marcos successfully lobbied for more specificity in the treaty, which now covers attacks “anywhere in the South China Sea”.

Do You Know:

— The nine-dash line demarcates China’s territorial claims in the sea on Chinese maps. It was initially the “eleven-dash line” but in 1953, the CCP-led government removed “the portion encompassing the Gulf of Tonkin, simplifying the border to nine dashes,” Council on Foreign Relations (CFR) said. The line runs as far as 2,000 km from the Chinese mainland to within a few hundred kilometres of the Philippines, Malaysia and Vietnam.

Map of the South China Sea, with “nine-dash line” highlighted in green. (Source: Wikimedia Commons/US Central Intelligence Agency)

— Notably,  rIndia and the Philippines recently conducted the two-day “bilateral maritime cooperative activity” in waters close to the Scarborough Shoal.

— Defence cooperation is one of the strong pillars of bilateral relations and a promising area for future collaboration between India and the Philippines, says the website of the Indian embassy in Manila.

— Notably, India delivered the first batch of BrahMos missile system to the Philippines on April 19, 2024, making it the first foreign nation to acquire the missile weapon system.

Other Important Articles Covering the same topic:

📍Explained: What’s behind diplomatic tensions in the South China Sea?

📍Knowledge Nugget | India-Philippines first bilateral naval exercise in the South China Sea: Why it matters for the UPSC Exam

UPSC Prelims Practice Question Covering similar theme:

(5) The “Scarborough Shoal” was recently in the news. It is a disputed territory primarily between:

(a) China and Vietnam

(b) China and the Philippines

(c) Malaysia and Indonesia

(d) Indonesia and Brunei

 

THE IDEAS PAGE

Resist pressure, lower tariffs 

Syllabus:

Preliminary Examination: Current events of national and international importance.

Main Examination: General Studies-II, III: Effect of policies and politics of developed and developing countries on India’s interests.

What’s the ongoing story: Ashok Gulati and Tanay Suntwal write- “US President Donald Trump has often chided India as the “tariff king’ and his trade adviser Peter Navarro has dubbed India the “tariff maharaja”. Is this mere rhetoric, or is there some truth to these accusations? We examine here the tariff structures of G20 countries which account for roughly 85 per cent of the global GDP, 75 per cent of global trade, and two-thirds of the world’s population. We look specifically at simple averages and trade-weighted tariffs on all goods, as well as separately for agriculture and non-agriculture goods. The numbers tell an interesting story.

Key Points to Ponder:

— What are tariffs? Why are tariffs imposed?

— How are tariffs retaliated?

— Read about the imposition of a 50% tariff by the US on India. 

— Know about the India’s tariff policy.

— What are India’s import and export trends with regard to the US?

— What are the sectors to be affected most by the higher tariff imposed by the US?

— What steps should be taken to manage the implications of higher tariffs?

Key Takeaways:

— “For all goods, Turkey has the highest simple average tariff (17.3 per cent), followed by India (16.2 per cent). But if one takes the trade weighted tariff of all goods, India’s score of 12 per cent makes it the “tariff king”.”

— “The US, by contrast, stands at 3.3 per cent for simple average, and 2.2 per cent in terms of trade-weighted tariff on all goods (see infographics). No wonder it keeps naming India and other countries, including several American allies, for having high tariff walls.”

— “Lower tariffs are a sign of the competitive strength of the economy, not its weakness. So, if India wants to be a superpower, it must develop its trade competitiveness and lower tariffs well below 10 per cent for all goods. But it cannot be done overnight, although there is ample scope even currently to reduce tariffs. For that, we look at tariffs on agricultural and non-agricultural goods separately.”

— “In agriculture, there is no doubt that India is the “tariff king” with a trade-weighted tariff of 64.3 per cent, although on a simple average tariff basis, South Korea tops with 57 per cent – India has an average of 36.7 per cent. In contrast, the US has a trade-weighted tariff of just 4.2 per cent, the EU 8.7 per cent and China 13.8 per cent.”

— “In case of non-agriculture products, India may not be the king — Argentina leads with a trade weighted tariff at 11.6 per cent — but it follows at 9.2 per cent.”

— “So, overall, India does have higher trade-weighted tariffs, especially for agriculture, making it somewhat of an outlier amongst G20 countries. But why is India so protective towards its agriculture? The reason is simple: India has the highest share of the labour force engaged in agriculture (46 per cent) and the highest population (1.45 billion) to feed, with an average holding size of just around 1 hectare. In contrast, only 2 per cent of the US workforce is engaged in agriculture, for the EU, that figure is 4 per cent, and for China, it is 22 per cent.”

— “Does it, then, mean India has no scope to lower its agri-tariffs, which are holding back its trade negotiations with the US? We don’t think so. India’s agri-tariffs are not just high, but they are also riddled with irrationalities.” 

— “The 50 per cent tariff imposed by the US on Indian goods is a wake-up call. India must reform, not retreat. 

(i) First, rationalise tariffs, independent of Washington’s pressures. We feel no duty should exceed 50 per cent. The raw materials should have the lowest import duty, say 0-10 per cent, non-sensitive goods between 10-20 per cent, sensitive goods from 20-35 per cent, and luxury items between 35-50 per cent. In case of sensitive agri-commodities, it’s better to adopt tariff rate quotas (TRQs) to protect farmers. 

(ii) Second, carry out domestic reforms to raise productivity. India must double agri-R&D to at least 1 per cent of agri-GDP and focus on precision agriculture so that farmers produce more from less. Fertiliser subsidy should be at the top of the reform agenda. Now is the time to rationalise it by giving direct benefit transfer (DBT) to farmers and freeing up the fertiliser prices. 

(iii) Third, value chains must be strengthened. Competitiveness is not just about yields but how efficiently produce moves from farm to fork.

— India has already shown the capacity to reform GST rates. Why not tariffs? The principle is similar: A clean, logical structure fosters efficiency, competitiveness, and credibility. Trump is right in calling India the tariff king. India protects agriculture for livelihoods, not for commerce, but excessive protection driven by lobbies and undue caution is ultimately self-defeating. If India truly wants to claim its place as a global superpower, it must shed the tariff maharaja image. Imports do not hurt growth. Instead, they should be part of a growth strategy. 

Do You Know:

— Tariffs are taxes or duties imposed by a government on imported goods and services. Their objective is to make foreign products more expensive compared to domestically produced goods, thereby encouraging consumers to prefer local products.

— Tariffs also act as a protective measure for domestic industries against foreign competition. Additionally, they serve as a source of revenue for the government.

Other Important Articles Covering the same topic:

📍Strategies for emerging markets at a time when protectionism is rising

📍UPSC Issue at a Glance | From Trump’s reciprocal tariffs announcement to 90-day pause: Everything in between

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Infosys’ Rs 18,000-cr buyback: How shareholders stand to benefit	The board of Infosys Ltd approved a Rs 18,000-crore share buyback on Thursday, making it the largest-ever repurchase of securities in the IT major’s history. A buyback, also known as share repurchase, is when a listed company buys its own shares from existing shareholders. The process reduces the number of outstanding shares in the open market over a period which can lead to better valuation and earning per share (EPS). It is another way of paying dividends to shareholders by companies.  Currently, a company can buy back its shares from shareholders on a proportionate basis through tender offer, or from the open market via book-building process, or from the odd-lot holders. The maximum limit of any buyback is 25 per cent or less of the aggregate of paid-up capital and free reserves of a company. Under the stock exchange route, a company can buy back shares only on the stock exchanges having nationwide trading terminals. The buyback is made only through the order matching mechanism. Tender offer means an offer by a company to buy back its own shares or other specified securities through a letter of offer from the holders of the shares or other specified securities of the company. The buyback is done on a proportionate basis as per the buyback ratio, and the additional shares tendered over and above the prescribed buyback ratio get accepted if there are any unaccepted shares.
Fear overpowers awareness campaigns, safety nets as ‘digital arrests’ tighten grip	Bankers highlight safety nets and awareness drives to tackle the ‘digital arrest’ scam, and both the Ministry of Home Affairs and the Reserve Bank of India continue to roll out new measures. Yet the challenge remains: citizens are still falling victim to these evolving frauds. Despite growing efforts, fear and intimidation continue to outpace the security systems. The Ministry of Home Affairs recently met senior police officials across states, terming the digital arrest scam a “national threat”. In late 2024, it set up a high-level committee to probe such scams and wider cyber fraud. Through its I4C unit, the ministry has already blocked thousands of WhatsApp accounts linked to fraudsters and is working with telecom providers to cut off SIM cards, devices, and VoIP services used in these crimes. Banks have put in place what they describe as robust mechanisms. Dedicated digital transaction monitoring departments track every large or unusual movement of money in savings accounts round the clock.

 

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