UPSC Key: Dengue Vaccine, Right to protest and EPF Scheme

Indus Waters Treaty: Govt focus on Chenab projects, renegotiation

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: A year after India put the Indus Waters Treaty (IWT) “in abeyance” following the Pahalgam terror attack, it is pushing for speedy development of hydropower projects on the Chenab with a combined capacity of over 5,000 megawatts and renegotiation of the six-decade-old pact, government sources said.

Key Points to Ponder:

• What does keeping the Indus Waters treaty ‘in abeyance’ mean?

• Know the significance of the Indus Waters Treaty in the context of India-Pakistan relations.

• Examine the legal mechanisms provided within the Indus Waters Treaty for dispute resolution.

• Assess the challenges and opportunities that arise from the construction of hydroelectric projects in shared river basins, with specific reference to the Indus River system.

• Since it was signed in 1960, what has the Indus Waters Treaty meant for India?

• What does keeping the Indus Waters treaty ‘in abeyance’ mean?

• When the treaty is renegotiated, what changes should India ask for?

• The Indus originates in Tibet. Should India be concerned about China’s interference while it resolves the river issue with Pakistan?

Key Takeaways:

• According to sources, the government has assessed that the pact has outlived its utility and is ready to renegotiate it with Pakistan to make it more balanced. “IWT, in its present form, cannot function again,” said a top source. Pakistan, sources said, has not shown any signs of ending cross-border terrorism against India — a pre-condition for resuming cooperation under the IWT.

• For any future reactivation of the river water-sharing provisions, the treaty would need to be renegotiated in a modified format — a step that remains contingent on Islamabad permanently halting its support for terrorism directed against India, sources said.

• The Indian Express has learnt that Delhi’s key priority is the speedy completion of hydropower projects on the Chenab — 1,856 MW Sawalkote Hydroelectric Project, 1,000 MW Pakal Dul Project, 850 MW Ratle Project, 624 MW Kiru Project, and 540 MW Kwar Project.

• While the Kiru and Pakal projects are expected to be completed by the end of this year, the remaining are expected to be completed in the next two-three years, sources said.

• These projects are critical for India’s clean energy transition, grid stability and regional development, and will substantially enhance India’s hydropower capacity while enabling the fuller utilisation of its legitimate rights under the Indus basin, said sources.

• “Together with accelerated hydropower development and modern basin management, these initiatives will ensure that India’s legitimate share of the Indus waters is utilised efficiently, sustainably and in accordance with its long-term developmental, water security and clean energy objectives,” sources said.

Do You Know:

• The IWT guides the distribution of the waters of the Indus and its tributaries between India and Pakistan. Now, the IWT itself states that the treaty cannot be altered unilaterally. Article XII of the IWT says that the treaty can only be terminated “by a duly ratified treaty concluded for that purpose between the two Governments”. The article also says that it “may from time to time be modified by a duly ratified treaty concluded for that purpose between the two Governments”.

• The term “hold in abeyance” is not recognised in international law, and it does not find a mention in the Vienna Convention on the Law of Treaties of 1969 (VCLT), a multilateral treaty which regulates treaties among nations.

• The VCLT recognises circumstances for “termination” or “suspension” of treaties. Article 62 states that “fundamental change of circumstances” may be ground for terminating a treaty under some conditions.

• The Indus treaty has endured for almost 65 years, sharing the waters of the Indus river system — the ‘Eastern Rivers’, namely Sutlej, Beas and Ravi, for India, and the ‘Western Rivers’ of Indus, Jhelum, and Chenab for Pakistan.

• India is constructing two hydroelectric power projects—the Kishenganga HE project on Kishenganga river, a tributary of Jhelum, and the Ratle Hydroelectric project on Chenab river.

• Pakistan has objected to the construction of these two projects. In 2015, Pakistan requested the appointment of a Neutral Expert to examine its technical objections to India’s Kishenganga and Ratle Hydro Electric Projects (HEPs).

• In 2016, Pakistan unilaterally retracted this request and proposed that a Court of Arbitration adjudicate its objections. This unilateral action by Pakistan is in contravention of the graded mechanism of dispute settlement envisaged by Article IX of IWT.

Other Important Articles Covering the same topic:

📍Renegotiating Indus Waters Treaty: way forward for India

Previous year UPSC Prelims Question Covering similar theme:
1) With reference to the Indus river system, of the following four rivers, three of them pour into one of them which joins the Indus directly. Among the following, which one is such a river that joins the Indus direct? (UPSC CSE, 2021)
(a) Chenab
(b) Jhelum
(c) Ravi
(d) Sutlej

Previous year UPSC Prelims Question Covering similar theme:
📍Terrorist activities and mutual distrust have clouded India – Pakistan relations. To what extent the use of soft power like sports and cultural exchanges could help generate goodwill between the two countries? Discuss with suitable examples. (2015)

Nation

India, Moldova discuss UNSC reforms, fight against terror

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Important International institutions, agencies and fora- their structure, mandate.

What’s the ongoing story: INDIA AND Moldova discussed reforms of multilateral organisations, including the UN Security Council, and cooperation in the fight against terrorism, as President Droupadi Murmu landed in Chisinau on her state visit to the country. Murmu is the first Indian head of state to visit the landlocked Eastern European country since the establishment of diplomatic relations in 1992.

Key Points to Ponder:

• What is the relationship between India and Moldova?

• Know the significance of India’s diplomatic engagement with smaller countries such as Moldova in advancing its agenda on UNSC reforms and counter-terrorism

• Map Work-Moldova

• What is the Security Council?

• Non-permanent members and permanent members-compare and contrast

• Who are the 15 members of the UNSC?

• Is Security Council reform in any way moving forward?

• How does the Security Council determine the existence of any threat to the peace, breach of the peace, or act of aggression?

• Five permanent members ten non-permanent members-know in detail

• How Voting System works in United Nations Security Council

• Do You think that the veto power given to five permanent members of the UNSC should be abolished?

• On what basis was Security Council permanent membership granted?

• How are the non-permanent members of the Security Council selected?

• Are UN resolutions binding?

• Is Security Council reform in any way moving forward?

• What is the process for Security Council reform?

• How does the Security Council determine the existence of any threat to the peace, breach of the peace, or act of aggression?

Key Takeaways:

• The President held bilateral discussions with her Moldovan counterpart Maia Sandu, where the two leaders explored new avenues of cooperation in trade and investment, digital transformation, information technology, healthcare, pharmaceuticals, agriculture, education, culture and capacity building, according to the Ministry of External Affairs (MEA).

• Briefing the media, MEA’s Secretary (West) Sibi George said, “They also discussed cooperation in (the) fight against terrorism. Both sides discussed (the) importance of reforms of multilateral organisations, including the UNSC.”

• As a special gesture of friendship, Murmu presented a bust of Mahatma Gandhi to President Sandu. The President laid a wreath at the Monument of Stefan cel Mare si Sfant (Stephen the Great), paying tribute to one of Moldova’s most revered national figures.

• As part of her day-long visit, Murmu met Igor Grosu, speaker of the Moldovan parliament, and interacted with members of the India-Moldova Parliamentary Friendship Group.

• Later, both Presidents jointly addressed the India-Moldova Business Forum, which brought together leading business representatives from both countries to explore fresh opportunities in trade, investment, innovation and technology.

• Both countries are also exploring cooperation in digital public infrastructure, innovation, food processing, logistics and skills development, creating significant potential for mutually beneficial investment, employment and sustainable growth, the MEA official added.

Do You Know:

• India’s outreach to Eastern Europe seeks to diversify its European engagement beyond major Western powers such as France and Germany. Over the next few days, President Murmu will also be visiting North Macedonia and Romania.

• Moldova, is a landlocked country in Eastern Europe. Moldova is bordered by Romania to the west and Ukraine to the north, east, and south. The unrecognised breakaway state of Transnistria lies across the Dniester river on the country’s eastern border with Ukraine. Moldova is a parliamentary democratic republic with its capital in Chișinău, the country’s largest city and main cultural and commercial centre.

Other Important Articles Covering the same topic:

📍UPSC Issue at a Glance | Understanding UNSC: Composition, need for reform, and India’s claim for permanent membership

Previous year UPSC Prelims Question Covering similar theme:
2) The Security Council of UN consists of 5 permanent members, and the remaining 10 members are elected by the General Assembly for a term of (UPSC CSE 2009)
(a) 1 year
(b) 2 years
(c) 3 years
(d) 5 years

Previous year UPSC Mains Question Covering similar theme:
📍Discuss the impediments India is facing in its pursuit of a permanent seat in the UN Security Council (2015)

Nation

India all set to get its first dengue vaccine

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

What’s the ongoing story: The Drug Controller General of India (DCGI) has approved Japanese company Takeda Biopharmaceuticals India’s dengue vaccine, Qdenga, making it the first such vaccine to be greenlighted in India. It is designed to protect against all four dengue virus strains (DENV-1, DENV-2, DENV-3 and DENV-4) and can be administered regardless of prior dengue exposure. It does not require pre-vaccination testing, the company said.

Key Points to Ponder:

• What is the vaccine about?

• What did clinical trials show?

• What is Dengue?

• Dengue is caused by what?

• What is the public health significance of the approval of India’s first dengue vaccine?

• Why dengue remains a major urban public health challenge in India?

• What is the importance of Integrated Vector Management in dengue prevention?

• Know the significance of the approval of Qdenga for India’s public health system.

Key Takeaways:

• The vaccine is administered subcutaneously. It comes as a two-dose regimen of 0.5 mL each, with doses given three months apart. The price has not been announced yet but since Takeda has entered into a manufacturing partnership with Hyderabad-based Biological E to produce up to 50 million doses annually, costs are expected to be competitive for the Indian market. Pricing will also depend on whether this gets incorporated into government immunisation programmes later.

• The approval comes at a critical time for public health, with reported dengue cases in India increasing 11-fold over the past two decades.

• India continues to account for nearly one-third of the global dengue burden. Dengue is a mosquito-borne viral disease that poses a significant global public health threat, with prevalence in over 125 countries. India accounts for nearly one-third of the global dengue burden.

• In an official statement issued today, Dr Mahender Nayak, head of Intercontinental Markets, Takeda, said, “Dengue is a growing public health challenge and India needs sustained, evidence-based prevention.” The latest seven-year data for Qdenga show continued protection against dengue infection and hospitalisation across all four serotypes — an important milestone for communities and health systems.” Since its launch in 2022, Qdenga has been approved in 43 countries, with more than 32 million doses distributed globally.

• Dr Goh Choo Beng, Medical Affairs Head, Southeast Asia and India Cluster, said, “India carries a substantial dengue burden, and all four dengue virus serotypes have been documented as co-circulating in several regions. The approval represents an important step in strengthening India’s comprehensive approach to dengue prevention, alongside vector control, surveillance, community awareness and other public health measures.”

Do You Know:

• It is designed to protect against all four dengue virus serotypes. It is approved for use in the four to 60 year age group, regardless of previous dengue exposure, without the need for pre-vaccination testing.It is the most extensively studied dengue vaccine, with long-term clinical data demonstrating sustained protection against dengue disease and dengue-related hospitalisation.

• The approval in India is based on results from Takeda’s global clinical development programme, involving 19 Phase 1, 2 and 3 clinical trials with over 28,000 participants in both endemic and non-endemic regions. This included the pivotal Phase III TIDES (DEN-301) trial, which evaluated the vaccine in over 20,000 participants across eight countries over an extended period to evaluate both the long-term safety and efficacy of QDENGA. At 12 months following the second dose, the study met its primary endpoint, demonstrating an overall vaccine efficacy of 80.2% against virologically confirmed dengue (VCD).

• The vaccine has also received WHO prequalification, confirming it meets global standards for quality, safety and efficacy, and enabling eligibility for procurement through international agencies such as UNICEF and PAHO to support wider access.

• In 2025, reported cases exceeded 113,000, but modelling analyses suggest the dengue burden in India appears to be higher than reported, likely representing tens of millions of infections each year.

Other Important Articles Covering the same topic:

📍Dengue vaccine a step closer? India’s first phase 3 trial hits 50% enrolment mark, early data shows no safety concerns

Previous year UPSC Prelims Question Covering similar theme:
3) Which of the following diseases can be transmitted from one person to another through tattooing? (UPSC CSE, 2013)
1. Chikungunya
2. Hepatitis B
3. HIV-AIDS
Select the correct answer using the codes given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

The World

Yemen’s Houthis open a new war front with naval blockade on Saudi

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Effect of policies and politics of developed and developing countries on India’s interests.

What’s the ongoing story: Yemen’s Iran-aligned Houthis said they ​would impose a naval blockade on Saudi Arabia, opening a potential new front against the United States in its war with Iran and raising the threat to global energy supplies and trade beyond the Gulf.

Key Points to Ponder:

• Map Work-Yemen

• Who are the Houthis?

• What exactly Houthi rebels have accused Saudi Arabia of?

• Hamas, Hezbollah and the Houthis-what you know about the same?

• Examine the strategic significance of Yemen in the geopolitical landscape of the Middle East

• Why did the US-Iran ceasefire collapse?

• What has happened since the US and Iran truce deal collapsed?

Key Takeaways:

• The ‌escalation comes after one of the deadliest periods in the war for U.S. troops. The Pentagon on Monday identified two U.S. soldiers who were killed when Iran attacked an American base in Jordan on Friday, while they also said they had found unidentified remains that could be those of a third soldier reported as missing in action. Separately, a fourth service member was killed in northern Iraq during the “controlled detonation of unexploded ordnance from a downed Iranian one-way attack drone.”

• After the Houthis announced their blockade, the Saudi-led coalition in Yemen said in a statement that it would respond to them with force, and also that it began implementing protection measures for its ships moving through the Bab el-Mandeb Strait, a key export route for Saudi oil after the effective closure of the Strait of Hormuz.

• The Houthis made their announcement despite signs that Tehran and Washington want to resume diplomacy to halt a worsening cycle of attacks that has all but wrecked a fragile interim agreement signed last month. Iran’s Foreign Ministry ⁠said mediators had presented “proposals” to Tehran, signalling that diplomatic contacts remain active, but gave no details.

• Oil prices rose briefly after the Houthi statement but later fell back as traders held out hope of a diplomatic breakthrough. The insurance cost of shipping goods through the Red Sea rose on the increased risks for merchant shipping.

• Iran had been pressing the Houthis to close the Bab el-Mandeb gateway to the Red Sea if the U.S. continued to attack Iranian power infrastructure.

• A full closure of the strait would reduce global oil supply by 7% as it would leave most of Saudi oil exports unable to leave the region. The disruption would add to the huge cut to oil flows from the war in the Gulf, which has already reduced shipments by 10% of global supply.

Do You Know:

• The Iran-backed Houthi rebels who control northern Yemen have accused Saudi Arabia of carrying out airstrikes on the capital’s international airport on Monday, testing the ceasefire between the kingdom and the militant group.

• The government of Yemen said the strikes were carried out in order to prevent an Iranian plane from landing. But Houthis have vowed to retaliate for the strike as the incident marks the first such escalation between Houthis and Riyadh, AP reported.

• A Saudi-led coalition in Yemen has been fighting the Houthis in the north for a long time. Houthi official Brigadier General Yahya Saree said Saudi Arabia launched airstrikes on Monday, ending a period of “de-escalation”, adding that “this aggression will not go unanswered or unpunished.”

• The development comes after tensions flared between the two sides this month when the Houthis accused planes from Saudi Arabia of breaching their airspace to prevent an Iranian plane carrying a Houthi delegation to Tehran for the funeral of Iran’s former Supreme Leader Ayatollah Ali Khamenei.

Other Important Articles Covering the same topic:

📍The ‘silent’ ally: Why Yemen’s Houthis are holding their fire while the Middle East ignites

Previous year UPSC Prelims Question Covering similar theme:
4) Very recently, in which of the following countries have lakhs of people either suffered from severe famine/acute malnutrition or died due to starvation caused by war/ethnic conflicts? (UPSC CSE, 2018)
(a) Angola and Zambia
(b) Morocco and Tunisia
(c) Venezuela and Colombia
(d) Yemen and South Sudan

Explained

Staging a protest: Rights, restrictions in the law

Syllabus:

Preliminary Examination: Current events of national and international importance.

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

What’s the ongoing story: The police cracked down on the Cockroach Janta Party (CJP) and its supporters on Monday as thousands joined the planned march to Parliament. The gates of the Parliament complex have been shut.

Key Points to Ponder:

• Is staging a protest legal in India?

• What forms of protest are allowed

• What is barred?

• Is staging a protest at Parliament allowed?

• Right to protest-what Constitution of India guarantees?

• Under what laws is a protest permitted in India?

• What the SC has said over protests, and the limits on them?

• Who are Cockroach Janta party?

• How did the Cockroach Janta party emerge?

• Why Cockroach Janta party staging protests?

Key Takeaways:

• The government has also reached out to protesters, with CJP chief spokesperson Saurav Das posting on X that they had met senior BJP leader JP Nadda and submitted a “written letter with our demands.”

Do You Know:

• The right to stage a protest is protected under the Fundamental Right to Freedom. Under Article 19 (1) (a) and (b), citizens have the right to “freedom of speech and expression”, and to “assemble peaceably and without arms.”

• However, these rights are subject to “reasonable restrictions” in the interests of “the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.”

• Thus, while citizens have every right to organise a protest, it has to be done keeping the restrictions in mind. The general practice to regulate a protest in India has been to mark designated spots for it, make police permission mandatory, and impose prohibitory orders under Section 163 of the Bharatiya Nagarik Suraksha Sanhita (earlier Section 144 of the CrPC).

• At the 47th Session of the UN Human Rights Council in Geneva in 2021, India’s representative had said in a statement, “One cherished and valuable aspect of the inclusive political life in India, the largest democracy of the world, is the tradition to express grievances through peaceful assembly and marches. Organised, non-violent and popular marches by the people of India was the key weapon in the struggle for independence. Naturally the right to peaceful assembly has been recognised as a fundamental right by the Indian Constitution.

• Article 19 of Indian Constitution guarantees to citizens of India the right to assemble, peacefully without arms, and the right to form associations and unions. The Supreme Court has ruled that the Constitution also guarantees the right to peaceful protest.”

Other Important Articles Covering the same topic:

📍CJP march to Parliament: What is the law invoked to impose curfew across New Delhi, how it is used

Previous year UPSC Prelims Question Covering similar theme:
5) Under which of the following Articles of the Constitution of India, has the Supreme Court of India placed the Right to Privacy? (UPSC CSE, 2021)
(a) Article 15
(b) Article 16
(c) Article 19
(d) Article 21

What EPFO 3.0 proposes: Pension cover for all, social security for gig workers

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: A universal pension cover for all workers with option of either annuity or systematic withdrawal plan, first-time social security contributions for unorganised sector workers including gig and platform workers, an upgradation of tech ecosystem to incorporate core banking solution (CBS) — these are some of the key changes being planned by the Employees’ Provident Fund Organisation (EPFO) as part of its 3.0 reforms phase.

Key Points to Ponder:

• What is Employees’ Provident Fund Organisation (EPFO)?

• Employees now get a new set of instructions from the EPFO. What specifically is included in the instruction manual?

• How Employees’ Provident Funds Scheme, 2026 is different from the Employees’ Provident Funds Scheme, 1952?

• What is the significance of contributory social security in India’s labour market?

• What is the Code on social security?

• What are the major reforms introduced under the EPF Scheme, 2026?

• How the Code on Social Security, 2020 seeks to modernize India’s labour welfare framework?

• What are the challenges in extending effective social security coverage to contract and informal workers?

• Know the role of provident fund reforms in promoting inclusive economic growth.

Key Takeaways:

• Over the last one year, the retirement fund body has worked on improving access to funds and easier claims settlement under EPFO 2.0, which has now taken shape in the form of a revamped portal with a centralised database merging 123 regional databases ensuring timely interest credit and visibility of eligible balance for withdrawal to members.

• The EPFO is now set to move towards the next phase of reforms through a CBS-enabled tech platform, a shift that has been seen as necessary to help it navigate payments for social security schemes covering the complete range of India’s workforce — over 60 crore workers, out of which over three-quarters are in the unorganised sector, with limited or no pension coverage.

• CBS is a centralised payments software which forms the backbone of banks in India allowing operations like deposits, withdrawals, in real time across all branches.

• The new pension cover will have a defined contribution framework with contributions from multiple sources including workers themselves, employers, government co-contributions for lower-income workers, aggregators in the case of gig and platform workers, and corporate social responsibility (CSR) or third-party funds. This is the first time that the EPFO is considering such forms of contributions or withdrawals at the time of retirement: presently, it only allows advance claims or partial withdrawals for certain categories such as education, illness, housing, and marriage during the membership tenure, or a lumpsum final settlement at the time of retirement.

Do You Know:

• Global models are being studied to incorporate similar features such as that of Singapore, which has a deferred annuity scheme that sets aside savings not just for retirement but also for housing and healthcare.

• Singapore’s social security scheme, Central Provident Fund (CPF), relies not just on individual CPF contributions for the retirement income as apart from a contribution of 20% of the salary to CPF, individual efforts are supplemented by employers, loved ones, and the government, as per the information on the Singapore government website. Unlike pension schemes in other countries, CPF members have a differential interest rate, with members earning an interest of up to 6% for those aged 55 and above, and 5% for those aged below 55.

• As the EPFO expects around 2.5 crore gig workers and building and other construction workers (BOCW) over the next five years, the pension scheme is also being designed keeping in mind their inclusion into social security coverage for the first time. The scheme will incorporate “one-to-many mapping” where one Universal Account Number (UAN) will be registered with multiple employers and aggregators, showing total PF and pension contributions from all sources for these workers while maintaining their employer-wise breakdowns.

• The EPFO system plans to allow third-party contributions like NGOs, individuals, donor organisations, CSR, and track all contributions under each UAN with a configurable upper limit. The new pension initiative would operationalise this through flexible co-contribution models, ensuring inclusion of delivery partners, drivers, and other platform workers.

• The EPFO 3.0 phase will also pave the way for PF contributions for all unorganised sector workers and gig workers, in line with the Code on Social Security that brings gig and platform workers into the social security net for the first time. The Code mandates aggregator contributions of 1-2% of annual turnover for social security, with the total contribution not exceeding 5% of the amount payable by the aggregator.

Other Important Articles Covering the same topic:

📍Revamped EPFO portal: Centralised database, with easier claim filing & info access

Previous year UPSC Prelims Question Covering similar theme:
6) With reference to casual workers employed in India, consider the following statements: (UPSC CSE, 2021)
1. All casual workers are entitled for Employees Provident Fund Coverage.
2. All casual workers are entitled for regular working hours and overtime payment.
3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account.
Which of the above statements are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Economy

Hormuz crisis: Crude imports surge 60%; net oil, gas imports up 45%

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Effect of policies and politics of developed and developing countries on India’s interests.

What’s the ongoing story: India’s crude oil import bill surged by over 60% on a year-on-year (y-o-y) basis in the first quarter of the current financial year even as import volumes dipped slightly amid supply tightness and elevated prices due to the West Asia crisis and stifled energy flows through the Strait of Hormuz, as per provisional data from the petroleum ministry.

Key Points to Ponder:

• How the Strait of Hormuz has emerged as one of the world’s most critical geopolitical chokepoints in the recent
scenario?

• How the Hormuz crisis demonstrates that supply chain resilience is as important as military preparedness?

• How rising crude oil prices affect the Indian economy.

• What has been India’s energy security strategy in the light of recurring geopolitical conflicts?

• How Strategic Petroleum Reserves can help in ensuring India’s energy security?

• India’s policy of “Strategic Autonomy” in the context of the Hormuz crisis-discuss

• How conflicts in West Asia affect India’s foreign policy and economic security

• ‘India’s dependence on imported fossil fuels remains its biggest strategic vulnerability’-do you agree?

• What are the challenges before India in achieving energy independence by 2047?

• Connect the dots between—Oil prices, Inflation, Exchange rate, Current Account Deficit, Fiscal deficit, GDP Growth

Key Takeaways:

• Liquefied natural gas (LNG) imports and petroleum product exports declined in volume terms, while rising in value.

• Overall, the country’s net oil and gas imports jumped 45% in value from year-ago levels, underscoring the adverse economic impact of the West Asia crisis on energy import-dependent India. The country depends on imports to meet over 88% of its crude oil requirement and about half of its consumption of natural gas, which is imported as LNG, or super-chilled gas. Despite depending on imported oil and gas, India is a net exporter of petroleum products due to its massive oil refining capacity, while it also imports some petroleum products like liquefied petroleum gas (LPG).

• Around 40% of India’s crude oil imports, 60% of its LNG imports, and a whopping 90% of its LPG imports came from West Asia through the strait. Apart from grappling with physical supply tightness due to the Strait of Hormuz crisis, the resultant surge in international prices forced India to import oil and gas at extremely high rates, as the country has been prioritising supply security over price considerations.

• The June MoU between the US and Iran brought a sigh of relief for India and the global energy market, but the renewed conflict in the Gulf following the pact’s effective collapse is emerging as a major concern as energy flows through the Strait of Hormuz have crashed again after a short-lived three-week recovery.

India’s oil & gas trade math

• According to latest provisional data released by the Petroleum Planning and Analysis Cell (PPAC), crude oil imports
in the June quarter rose 61.2% y-o-y to $49.8 billion, even as import volumes declined 4.5% to 59.8 million tonnes, or about 438 million barrels.

• This translates to about $113 per barrel as the average landed price of imported crude oil in the June quarter, up from around $67 per barrel in the corresponding quarter of last year. The PPAC data shows that India’s dependence on imported oil in April-June was 89.1%, flat on a y-o-y basis.

Do You Know:

• Petroleum product imports declined almost 42% in volume terms to 7.1 million tonnes, as supply of major petroleum products that India imports — like LPG — were impacted by the West Asia war. In value terms, the decline in petroleum product imports was relatively lower — down 27.6% to $4.2 billion — due to high international prices.

• India’s petroleum product export volumes declined by a fourth to 11.3 million tonnes in April-June from 15 million tonnes in the corresponding period of last year as domestic fuel supplies took precedence amid the global supply crunch. Nonetheless, the exports surged nearly 40% in value due to the jump in international petroleum fuel prices.

• As India imports 1.8-2 billion barrels of crude oil a year, every $1-per-barrel increase in oil prices bumps up the country’s oil import bill by up to $2 billion on an annualised basis. According to a March report by Nomura, India is among the three most vulnerable Asian economies to high oil prices in terms of import bill and current account balances, the other two being Thailand and South Korea. It said that every 10% oil price increase typically widens India’s current account deficit by 0.4% of the GDP.

Other Important Articles Covering the same topic:

📍 Expert Explains | A point-by-point breakdown of US-Iran MoU, from nuclear issue to Strait of Hormuz

Previous year UPSC Prelims Question Covering similar theme:
7) Between India and East Asia, the navigation-time and distance can be greatly reduced by which of the following? (UPSC CSE, 2011)
1. Deepening the Malacca straits between Malaysia and Indonesia.
2. Opening a new canal across the Kra isthmus between the Gulf of Siam and Andaman Sea.
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

 

PRELIMS ANSWER KEY

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

  

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