UPSC Key: India-US defence partnership, MGNREGS, and India’s projected GDP

Preliminary Examination: Current events of national and international importance.

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

What’s the ongoing story: As they continue to negotiate a bilateral trade deal and the thorny issue of a tariff penalty by Washington over Delhi’s purchase of Russian oil, India and the US Friday signed a 10-year Framework for the US-India Major Defence Partnership, signalling stable ties between the two countries in the defence sector.

Key Points to Ponder:

— What is the history of India-US relations?

— What are the areas of cooperation between India and the US?

— How have India-US defence relations evolved? 

— Read about the US-India Roadmap for Defence Industrial Cooperation.

— Know about the 12th ASEAN Defence Ministers’ Meeting – Plus (ADMM-Plus).

— What are the key defence agreements signed between India and the US?

(Thought Process: Know about the Basic Exchange and Cooperation Agreement for Geospatial Intelligence (BECA), Logistics Exchange Memorandum of Agreement (LEMOA), Communication Compatibility and Security Agreement (COMCASA), and General Security of Military Information Agreement (GSOMIA).

— What are the challenges to India-US bilateral ties?

Key Takeaways:

— The pact was signed following a bilateral meeting between Defence Minister Rajnath Singh and his US counterpart Pete Hegseth on the sidelines of 12th ASEAN Defence Ministers’ Meeting – Plus (ADMM-Plus) in Kuala Lumpur, Malaysia.

— In a statement, the Ministry of Defence said the 2025 framework is intended to provide a unified vision and policy direction to deepen defence cooperation. It said the framework will usher in a new era in the already strong defence partnership between the two countries and marks a new chapter in further transforming it over the next 10 years.

— Singh said the framework will provide policy direction to the entire spectrum of the India-US defence relationship. “It is a signal of our growing strategic convergence and will herald a new decade of partnership,” he said in a post on X, adding that defence will remain a major pillar in bilateral relations between the two sides.

— In February this year, following a meeting between Prime Minister Narendra Modi and President Donald Trump, the two sides had announced plans for the new 10-year defence framework.

— Despite the strain in relations between Delhi and Washington over the issue of tariffs that came up in July and August, there has been no visible dip in military ties between the two countries.

— The vision for bilateral defence cooperation was encapsulated in the September 2013 Joint US-India Declaration on Defence Cooperation and the 2015 Framework for the US-India Defence Relationship, in which the two countries committed themselves to increasing cooperation in the sector.

— Between 2016 and 2020, the two sides signed four more agreements, including the Logistics Exchange Memorandum of Agreement (LEMOA) in 2016, the Communications Compatibility and Security Agreement (COMCASA) in 2018, and the Basic Exchange and Cooperation Agreement (BECA) in 2020.

— In August 2024, both countries signed a Security of Supply Arrangement (SOSA) and Memorandum of Agreement regarding the Assignment of Liaison Officers, among other bilateral military agreements that have enhanced defence and security cooperation.

— In September this year, Indian and American troops participated in a two-week military exercise Yudh Abhyas at Fort Wainwright in Alaska.

Do You Know:

— Security of Supply Arrangement (SOSA): Under SOSA, the US and India will provide reciprocal priority support to each other for goods and services that promote national defence. India is the 18th SOSA partner of the US. While SOSA is an important mechanism to strengthen interoperability with US defence trade partners, it is legally non-binding.

— MoU on Liaison Officers: The Memorandum of Agreement regarding the Assignment of Liaison Officers is a progression on a decision taken earlier to increase information-sharing between India and the US, and to post Indian armed forces officers in key strategic US Commands. India will deploy the first Liaison Officer to the US Special Operations Command headquarters in Florida.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Yudh Abhyas: What UPSC aspirants must know for the exam

Prelims Practice Question Covering similar theme:

(1) With reference to the Security of Supply Arrangement (SOSA), consider the following statements:

1. It is signed between India and Ukraine.

2. It is a binding agreement.

3. The arrangement will enable both countries to acquire the industrial resources to meet national security needs.

Which of the statements given above is/are correct?

(a) 2 only

(b) 1 and 3 only

(c) 3 only

(d) 1, 2 and 3

Previous year UPSC Mains Questions Covering similar theme:

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

 

EXPRESS NETWORK 

Health hazard’: HC says can’t allow ORS-labelled beverages in market

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: With the Food Safety and Standards Authority of India (FSSAI) upholding its ban on beverages labelled ORS, this time in a reasoned order, the Delhi High Court Friday made it clear that it is not going to interfere with the regulator’s order, noting that such products have been flagged as a “health hazard” by the regulator and the court reiterating that “public health considerations is of paramount.”

Key Points to Ponder:

— What is ORS?

— Who is responsible for food regulation in India?

— What are the challenges of food regulation in India?

— What are the concerns related to ORS?

—- Read about the Food Safety and Standards (FSS) Act, 2006.

— What is the role and function of the Food Safety and Standards Authority of India (FSSAI)?

Key Takeaways:

— The judge was hearing a plea by Dr Reddy’s Laboratory (DRL), which has moved the high court seeking permission to exhaust its stock of ready-to-drink fruit flavoured beverages which it sells as an Oral Rehydration Solution (ORS) branded as ‘Rebalanz VITORS’.

— While DRL informed the court that it is rebranding its product now as ‘Rebalanz Vitenergy’, the court orally proposed that for its existing stock in circulation, it can approach the FSSAI, while refusing to grant permission to exhaust the stock.

— Justice Datta indicated that he shall pass orders on DRL’s plea, while indicating that it will allow FSSAI’s embargo to continue. “I’m not disturbing it, given the public health concerns,” Justice Datta said orally.

— The FSSAI, in two orders dated October 14 and 15, had reasoned that the use of the term ‘ORS’ in the trademarked name or in the naming of any food product otherwise — whether fruit-based, non-carbonated, or ready-to-drink beverages — even when accompanied by a prefix or suffix, constitutes a violation of the provisions of the Food Safety and Standards (FSS) Act, 2006, and the regulations made thereunder”. 

— It had held that “such practices are misleading to consumers by way of false, deceptive, ambiguous, and erroneous names/label declarations”.

— On October 17, acting on a petition by the J&J subsidiary, the Delhi High Court had paused the operation of two orders of the FSSAI, which restrained the use of the term “ORS” in branding beverages. The move had drawn flak from paediatricians and health experts, given that such beverages have been flagged for their high sugar content.

— The FSSAI order dated October 30, as accessed by The Indian Express, is based on a representation made by pharma multinational Johnson and Johnson’s subsidiary JNTL Consumer Health. The order notes that the reason for a blanket ban on ORS-branded products is because “complaints have been received that such products have been mistakenly consumed by patients, particularly children, in place of WHO recommended ORS, resulting in adverse health outcomes.”

— The regulator, operating under the Ministry of Health and Family Welfare, also notes that “disclaimers are ineffective” when the brand name containing “ORS” visually dominates the label; the product labelling prominently displays the term “ORS” and uses colour schemes, fonts, and representations identical or similar to medically approved oral rehydration solutions; and consumers, particularly laypersons, do not read or comprehend such disclaimers at the time of purchase.

Do You Know:

— According to WHO- Food standards are a mechanism for promoting food safety and quality among the general public. Food standards ensure that established food safety practices are followed. They provide guidance on hygienic food handling for farmers and processors. They define the maximum levels of additives, contaminants, residues of pesticides, and veterinary drugs that can safely be consumed by all.

— In India, the Food Safety and Standard Act, 2006, provides the legal framework for monitoring the status of food safety, and the Food Safety and Standards Authority of India (FSSAI) is the main authority for ensuring food safety.

— Food Safety and Standard Act, 2006: It aims to establish a single reference point for all matters relating to food safety and standards, by moving from multi-level, multi-departmental control to a single line of command. The Act established FSSAI and the State Food Safety Authorities for each State.

—  FSSAI: It is an autonomous statutory body established under the Food Safety and Standards Act, 2006. Ministry of Health & Family Welfare, Government of India is the administrative Ministry of FSSAI. Its headquarters is in Delhi.

Other Important Articles Covering the same topic:

📍UPSC Issue at a Glance | Food Safety : 5 Key Questions You Must Know for Prelims and Mains

Previous year UPSC Prelims Question Covering similar theme:

(2) Consider the following statements: (UPSC CSE 2018)

1. The Food Safety and Standards Act, 2006 replaced the Prevention of Food Adulteration Act, 1954.

2. The Food Safety and Standards Authority of India (FSSAI) is under the charge of the Director General of Health Services in the Union Ministry of Health and Family Welfare.

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

Previous year UPSC Mains Question Covering similar theme:

Elaborate the policy taken by the Government of India to meet the challenges of the food processing sector. (UPSC CSE 2021)

 

EXPLAINED 

Legal battle over MGNREGS in Bengal, what happens after SC’s order

Syllabus:

Preliminary Examination: Current events of national importance, economic development. 

Mains Examination: General Studies-II: Government policies and interventions.

What’s the ongoing story: The Supreme Court on Monday (October 27) cleared the path for restarting the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in West Bengal after a gap of three and a half years.

Key Points to Ponder:

— What is the MGNREG scheme?

— What are the eligibility criteria for receiving the benefits under the MGNREGA scheme?

— What is the funding pattern between the Centre and the States under MGNREGS?

— How does the legal right to work under MGNREGA benefit rural households?

— Who are the key stakeholders of the MGNREG scheme?

— How schemes such as the MGNREG scheme can help alleviate distress migration?

— What are the issues and challenges associated with the MGNREG scheme?

Key Takeaways:

— Following the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, a hundred days of wage employment are annually provided as a legal right to adults in rural areas who are willing to do unskilled manual work.  Central and State Governments provide financial assistance in the ratio of 90:10, respectively, with the Centre fully funding the wages.

— Before the Centre suspended the MG-NREGS in 2022, West Bengal was among the top states — 51 to 80 lakh families in the state availed it annually between 2014-15 and 2021-22.

— In its decision, the apex court dismissed the Central government’s plea, which challenged the Calcutta High Court’s order to resume the scheme from August 1, 2025. 

— The Centre had stopped the release of funds to West Bengal with effect from March 9, 2022, “due to non-compliance of directives of Central Government”, by invoking Section 27 of the MGNREGA, 2005. Since then, no work under the NREGS has happened in the state.

— Minister of State of Rural Development, Kamlesh Paswan, said in a written reply to the Lok Sabha this year, “In case of the State of West Bengal, based on central teams’ inspection reports highlighting the implementation issues such as financial misappropriation, execution of non-permissible activities, splitting of works, lack of transparency & accountability, the Ministry had sent several communications to the State for rectification of the same. However, no noticeable improvements were observed.”

—The TMC-led West Bengal government repeatedly urged the Union Ministry of Rural Development to resume the scheme. TMC MPs also raised the issue, with Abhishek Banerjee leading a delegation of MPs to Krishi Bhawan in New Delhi on more than one occasion.

Eventually, the West Bengal government approached the Calcutta High Court, which, in its order on June 18, 2025, directed that the “scheme be implemented prospectively with effect from 1st August 2025.” However, the Centre filed a plea in the Supreme Court on July 31, a day before the HC’s deadline, challenging the HC order.

— On Monday, when the matter came up before the bench of Justices Vikram Nath and Sandeep Mehta, it refused to entertain the plea filed by the Centre against the HC order, saying it did not warrant interference. With the SC dismissing the Centre’s plea, sources said the ministry has virtually no option but to resume the scheme.

— The states can generate their demands for funds using NREGASoft, the Management Information System (MIS) of the MG-NREGS, only after this committee clears their labour budget proposals. Under the NREGS, the MoRD releases funds to states “based on agreed labour budget.”

Do You Know:

— MGNREGS is the world’s largest social security programme aimed at enhancing livelihood security and reducing rural poverty. It is based on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, 2005).

— The MGNREGA recognises employment as a statutory right. The Act signified a critical shift from this being a negative right under Article 21 of the Constitution (which mandated that the state must not interfere with your livelihood unreasonably) to a positive statutory obligation on the government to provide employment on demand.

— It guarantees 100 days of employment in a year to rural households whose adult members volunteer to do unskilled manual work.

— The act provides a legally-backed guarantee for any rural adult to get work within 15 days of demanding it; thereby serving as an effective social safety net during times of economic distress. Moreover, at least one third of MGNREGA beneficiaries have to be women.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | MGNREGS: a social security scheme you must know for UPSC Exam

UPSC Prelims Practice Question Covering similar theme:

(3) Consider the following statements regarding Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS):

1. The government has capped spending under the MGNREGS at 60 per cent of its annual allocation for the first half of the financial year 2025–26.

2. The Finance Ministry has directed the Ministry of Rural Development (MoRD) to include MGNREGS under the Monthly/Quarterly Expenditure Plan (MEP/QEP) framework.

3. Till now, the scheme has operated as a demand-driven programme with 40 per cent mandatory capping on the spending limit.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Decoding India’s projected GDP

Syllabus:

Preliminary Examination: Current events of national and international importance.

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 comment that India’s Commerce and Industry Minister Piyush Goyal made during the Berlin Global Dialogue last week has gone viral. In his comment, Goyal made it abundantly clear that India does not strike trade deals under duress.

Key Points to Ponder:

— What is GDP, and why is it considered a key measure of economic growth?

— What are the different approaches used to measure GDP?

— What is real and nominal GDP? 

— Is GDP an accurate measure of economic growth?

— What does the World GDP Ranking 2025 say about the largest global economies?

— What are the challenges of GDP calculation?

Key Takeaways:

— “We don’t do deals in a hurry and we don’t do deals with deadlines or with a gun on our head,” he had said, and this was the part that caught everyone’s attention. However, what was equally noteworthy was the reason he gave for India’s approach: “We’d like to really look at the long term. We recognise that 20-25 years from now we’ll be a $30 trillion economy. And accordingly we’ll negotiate based on the future. A trade deal is in the long term and we have to recognise the future and get the best deal.”

— The central point here is that India’s economy is going from strength to strength and, even though at the moment the US economy is almost 8 times the size of India’s economy, in the coming 25 years that gap will get narrowed substantially. As such, there is no reason to consider India weak when in the long-term, India’s economy will become $30 trillion — roughly the same level when the US is at present.

— Given that economic growth rate and the size of the economy — even the projected one — is a big enough variable determining India’s trading stance, it is worth examining how likely it is for India to become a $30 trillion economy in the next “20-25 years”.

— Some basics first. The size of an economy refers to the annual gross domestic product or GDP. The GDP is nothing but the total market value of all goods and services produced within a country. The size of an economy gives a sense of the overall heft of an economy in global affairs; it is a way to keep score. That’s because if an economy produces more (or spends more, depending on how you calculate the GDP), it informs about the relative prosperity and economic vitality of that country.

— In a global context, a country’s GDP is stated in US dollar terms. That way all economies can be compared easily. That means calculating the GDP in dollar terms requires taking India’s GDP in rupee terms — the way it is actually observed on the ground — and then dividing it with the dollar-rupee exchange rate to arrive at the value in US dollar terms. It is also noteworthy that the GDP in question in all such discussions is the nominal GDP — not the real GDP (the one in which we take away the effect of inflation).

— As such, any projection of GDP would require two things: The projection of India’s nominal GDP in rupee terms as well as the projection of rupee-dollar exchange rate.

— Both matter because the same nominal GDP of Rs 330 trillion in 2024 could be converted to make India a $5 trillion economy if the exchange rate in 2024 was the same as in 2014. But since the exchange rate had slipped from around 65 rupees to a dollar in 2014 to around 84 rupees a dollar in 2024, India’s GDP in dollar terms was still $3.9 trillion.

— How valid are Goyal’s projections? Quite valid. Here’s how. Let’s assume the projection of $30 trillion is for 25 years instead of 20 years — which is the easier goal to achieve. Since we are projecting 25 years into the future, it makes sense to look back at how India’s economy has grown in the past 25 years. Data reveals that India’s nominal GDP has registered a CAGR (compounded annual growth rate) of 11.9% since the financial year 2000. Further, the Indian rupee has depreciated against the dollar at a CAGR of 2.7% since 2000.

— So, if one presumes that India’s growth will be exactly the same and the rupee will depreciate exactly in the same manner over the coming 25 years, then India’s GDP will cross $30 trillion in 2048. That’s exactly 27 years from now — smack in the middle of the range that Goyal provided.

Do You Know:

— Only final goods and services are included in GDP. Intermediate goods — those goods which are used as inputs in the production of other goods — are excluded to avoid double counting. 

— There are two main measures of GDP: Nominal GDP and Real GDP. 

— Nominal GDP: It refers to the value of goods and services evaluated at current market prices without factoring in inflation or deflation.

— Real GDP: An inflation-adjusted measure that reflects both the value and quantity of goods and services produced by an economy in a given year. 

Other Important Articles Covering the same topic:

📍UPSC Issue at a Glance | From largest economies to understanding GDP: 4 Key Questions You Must Know for Prelims and Mains

📍Why is GDP considered a key measure of economic growth?

📍Explained: What is GDP and why does it matter?

UPSC Prelims Practice Question Covering similar theme:

(4) With reference to the gross domestic product (GDP), consider the following statements:

1. It is the market value of all the final goods and services produced within a country in a specific time period.

2. Real GDP refers to the value of goods and services evaluated at current market prices without factoring in inflation.

3. Nominal GDP refers to the value of goods and services evaluated after adjusting inflation or deflation.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

How Trump’s tariffs are hurting U.S. the most

Syllabus:

Preliminary Examination: Current events of national and international importance.

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

What’s the ongoing story: The latest analysis from researchers at the Yale Budget Lab, which has been closely tracking the Trump tariffs and their impacts on different aspects of the United States’ economy as well as the rest of the world, suggests that, as things stand, the US may be the worst affected by the Trump tariffs.

Key Points to Ponder:

— What are tariffs? Why are tariffs imposed?

— How are tariffs retaliated?

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

— Read about the India-US trade deal talks. 

— 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?

— What strategies is India using to navigate potential trade negotiations with the U.S.?

Key Takeaways:

— Tariffs are a tax levied by the domestic government, in this case the US government, on its own citizens for importing goods from the rest of the world. Even though tariffs are often put up on the pretext of making the domestic economy stronger, traditional economic wisdom suggests that putting up tariffs often hurts the domestic economy.

— However, President Trump has openly defied the traditional caution under the mistaken notion that tariffs are paid by the citizens of foreign countries. He points to the billions of dollars collected in tariff revenues as proof that this policy is working without realising that bulk of this money is essentially paid by US consumers and US companies that are importing goods from the rest of the world.

— The YBL data summarised in the CHART alongside shows how Trump’s tariffs have affected some of the major economies in the world.

CHART.

— The first big takeaway is that the US is the worst affected. US real GDP growth is half a percentage point lower than what it could have been both in 2025 and 2026. Moreover, as things stand, over the longer term, YBL calculates that in any given year, the US GDP would be 0.35 percentage points lower than what it would have been without the effects of tariffs.

— In hard money terms, 0.35% of US GDP is around $105 billion — that’s around 30% of Pakistan’s total GDP. In Indian rupees that’s a loss of Rs 9.3 lakh crore — pretty close to all the money the Indian government spends on capital expenditure to boost the productive capacity of the country.

— The other country that will take a big hit — albeit only half as bad as the US — is China. Trump’s tariffs will persistently shave off 0.18 percentage points from China’s long run GDP. So, the biggest two economies in the world will be the worst affected, and perhaps this recognition has driven their increased engagement even in the middle of the tariff wars. 

— There are some winners in this process: the UK and European Union. It is noteworthy that while these two regions are trade competitors of the US, they are also strong military allies.

— Amongst its neighbours with whom the US has a free trade agreement, it is Mexico that has been able to turn the tariffs tsunami in its favour, while Canada has suffered. The fact that US and Canada leaders are often quarrelling with each other, often leading to diplomatic rows while very little is heard from the Mexico-US diplomatic front, could be a signal why the fortunes differ.

Other Important Articles Covering the same topic:

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

UPSC Prelims practice Question Covering similar theme:

(5) Consider the following statements:

1. Tariffs are taxes or duties imposed by a government on imported goods and services.

2. Objective of tariffs is to make foreign products more expensive compared to domestically produced goods

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

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PRELIMS ANSWER KEY

1. (c)     2. (a)     3. (b)      4. (a)      5. (c)

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