UPSC Key: Netherlands returns Chola Plates, Monsoon’s early onset, and Silver import curbs

Key Points to Ponder:

— Who were the Cholas?

— What are the major historical sources to understand the Chola dynasty? 

— Know about the Emperors of the Chola Kingdom.

— What was the social, economic, and administrative structure under the Chola dynasty?

— What are the contributions of the Cholas to culture and heritage? 

— Colonial rule of Dutch East Indies Company in India: Read about it

— What is the significance of Copper Chola Plates (Anaimangalam copper plates) returned by the Netherlands to India?

— What is the Chola architectural style? What are the distinguishing architectural designs of Chola temples? 

— Read about the Chola emperor Rajendra I and his maritime legacy. 

Key Takeaways:

— Behind the return of 30-kg Chola Plates is a foolproof provenance claim made by India and a national policy framed by the Dutch government for the return of colonial plunder. Even as they were handed over by Dutch PM Rob Jetten, the plates — in the possession of Leiden University since 1862 — will be returned to India in a few weeks, according to sources.

— The restitution comes on the advice of the national Colonial Collections Committee of the Netherlands, they add, in response to a request by the Ministry of Culture in 2023, stating that the Copper Chola Plates originate from India and record important agreements about the right of a Buddhist shrine and a number of monasteries in Nagapattinam in India to the revenue of villages.

— Calling it a joyous moment for every Indian, the PM said in a post on X, “… The Chola Copper Plates are a set of 21 large plates and 3 small plates and largely contain texts in Tamil, one of the most beautiful languages of the world. They relate to the great Rajendra Chola I formalising an oral commitment made by his father, King Rajaraja I. They also showcase the greatness of the Cholas. We in India are immensely proud of the Cholas, their culture and their maritime prowess.” He also thanked the Netherlands government and the Leiden University.

— One object (origin: 1687) comprises 21 copper plates held together by a bronze ring bearing the seal of King Rājendra Chola I during his reign in the 11th century. Five plates contain Sanskrit inscriptions, and the remaining are in Tamil. 

One of the copper plates (Image: Leiden University special collection)

— The other object (origin: 1688) comprises three copper plates with Tamil inscriptions also held together by a bronze ring bearing the seal of King Kulōttunga Chola I (who ruled from 1070 to 1120).

— As per the Leiden university statement, the provenance investigation demonstrated that the plates were most likely excavated during the construction of Fort Vijf Sinnen and the redevelopment of the site at the ‘Chinese’ Pagoda in Nagapattinam by the Dutch East Indies Company (VOC) between 1687 and 1700. At the time, Nagapattinam had been captured by the VOC.

Do You Know:

— According to the Customs Department in Chennai, the Anaimangalam copper plates comprise a set of 21 large plates and three smaller ones. These were issued to commemorate grants made by the renowned Chola ruler Rajaraja I to a Buddhist vihara (monastery) at the Chola port town of Nagappattinam in Tamil Nadu. The vihara had been constructed by Chulamanivarman, the Sailendra ruler of Southeast Asia. 

— The Chola kingdom stretched across present-day Tamil Nadu, Kerala, and parts of Andhra Pradesh and Karnataka.  

— Rajaraja I, born to King Parantaka II in 947 CE, is considered the most powerful Chola ruler. Records from copper plate inscriptions have revealed that upon his birth, he was named Arulmozhivarman. Upon accession to the throne in 985 CE, he adopted the regnal title ‘Rajaraja’ or king of kings. 

— Prime Minister Narendra Modi last year unveiled a commemorative coin and inaugurated an exhibition on Rajendra Chola’s northern conquest. Rajendra I, the maritime monarch of the Chola dynasty, inherited a powerful kingdom from his father Rajaraja I and expansion of the Chola empire continued under him. 

— Three royal temples – the Tanjore Brihadēśvara, Gangaikoṇḍacōl̥apuram, and Darasuram Airavatēśvara – built between the 11th and 12th centuries CE, are the finest examples of the Cholas’ artistic brilliance. These temples were inscribed as a UNESCO World Heritage Site as the ‘Great Living Chola Temples’ in 1987. 

Other Important Articles Covering the same topic:

📍Netherlands returns Chola-era copper plates to India during PM Modi’s visit

📍UPSC Issue at a Glance | Revisiting Chola dynasty and Rajendra I’s achievements: Insights into governance, society, architecture, and more 

UPSC Prelims Practice Question Covering similar theme:

(1) With reference to the Chola Empire, consider the following statements:

1. The Chola kingdom stretched across present-day Tamil Nadu, Kerala, and parts of Andhra Pradesh and Karnataka.

2. Arulmozhivarman was one of the only Indian monarchs to conquer territory outside the Indian subcontinent.

3. The gigantic Bridheshwara Temple is one of the finest examples of Cholas’ artistic brilliance.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Previous year UPSC Main Question Covering similar theme: 

Chola architecture represents a high watermark in the evolution of temple architecture. Discuss. (UPSC CSE 2013)

IWT: India rejects ‘so-called ’ arbitration award as ‘null & void’

Syllabus:

Preliminary Examination: Current events of national importance.

Main Examination: General Studies-II: India and its neighborhood- relations. 

What’s the ongoing story: India on Saturday rejected the “so-called award” issued on May 15 by the “illegally constituted so-called” Court of Arbitration (CoA) regarding disputes with Pakistan over the Indus Waters Treaty (IWT). 

Key Points to Ponder:

— What is the Indus Waters Treaty (IWT)? 

— What is the history of India-Pakistan ties? 

— What are the legal mechanisms provided within the Indus Waters Treaty for dispute resolution.

— What are the hydroelectric projects in Jammu and Kashmir that have been a bone of contention between India and Pakistan? 

— What is the role of international organizations, such as the World Bank, in mediating transboundary water disputes.

— Map work: Indian states Bordering Pakistan, Indus river system. (Refer Atlas) 

Key Takeaways:

— Responding to media queries, Ministry of External Affairs official spokesperson Randhir Jaiswal said: “The illegally constituted so-called Court of Arbitration (CoA) has, on 15 May, 2026, issued what it termed an award concerning maximum pondage supplemental to the award on issues of general interpretation of the Indus Waters Treaty.”

— “India categorically rejects the present so-called award, just as it has firmly rejected all prior pronouncements of the illegally constituted CoA,” Jaiswal said.

— He said India has never recognised the establishment of this “so-called” CoA. “Any proceeding, award, or decision issued by it is null and void. India’s decision to hold the Indus Waters Treaty in abeyance remains in force,” he said.

— The IWT was signed on September 19, 1960 after nine years of negotiations between India and Pakistan. The treaty has 12 Articles and 8 Annexures (from A to H). As per the provisions of the treaty, all the water of “Eastern Rivers”— Sutlej, Beas and Ravi — shall be available for “unrestricted use” of India. Pakistan shall receive water from “Western Rivers”— Indus, Jhelum and Chenab.

— In January 2023, India issued a notice to Pakistan seeking a “modification” of the treaty. This was the first such notice in the more than six decades of the IWT’s existence.

— India upped the ante in September 2024 by issuing another formal notice to Islamabad, this time seeking the “review and modification” of the IWT. The word “review”, according to experts, effectively signals New Delhi’s intent to revoke and renegotiate the treaty, which will turn 65 this year. India decided to keep the IWT in abeyance after the April 22 Pahalgam terror attack, in which terrorists killed 26 people and injured another 10.

Do You Know:

— A river, along with its tributaries, is called a river system. The Indus River system comprises six rivers: Indus, Jhelum, Chenab, Ravi, Beas, and Sutlej. The Indus and Sutlej are antecedent rivers, meaning they existed even before the formation of the Himalayas and cut deep gorges after originating in the Tibet region. The other four rivers – Jhelum, Chenab, Ravi and Beas – originate in India.    

Other Important Articles Covering the same topic:

📍Water wars and signing of Indus Waters Treaty

Previous year UPSC Prelims Question Covering similar theme:

(2) 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 directly? (UPSC CSE 2021)

(a) Chenab

(b) Jhelum

(c) Ravi

(d) Sutlej

Previous year UPSC Main Question Covering similar theme:

“Increasing cross-border terrorist attacks in India and growing interference in the internal affairs of several member-states by Pakistan are not conducive for the future of SAARC (South Asian Association for Regional Cooperation).” Explain with suitable examples. (UPSC CSE 2016)

 

THE SECOND PAGE

Monsoon marks early onset over Andaman & Nicobar, Bay of Bengal, Arabian Sea

Syllabus:

Preliminary Examination: Indian and World Geography.

Mains Examination: General Studies-I: Important Geophysical phenomena, geographical features and their location-changes in critical geographical features.

What’s the ongoing story: The southwest monsoon marked an early arrival this year over some areas of the southwest and southeast Bay of Bengal, Nicobar Islands and southeast Arabian Sea, the India Meteorological Department (IMD) announced Saturday. 

Key Points to Ponder:

— What is the southwest monsoon? What is the difference between the southwest monsoon and the Northeast Monsoon? 

— What is meant by the “onset of the monsoon”?

— What are easterly and westerly winds? 

— How does the monsoon occur in India?

— What are the conditions that determine the onset of the monsoon?

— Know the terms and their influence on Indian Monsoon—El Nino Southern Oscillation (ENSO), Indian Ocean Dipole (IOD), El Nino, La Nina.

— What is the impact of La-Nina and El Nino on the monsoon?

— What are the major weather forecasting methods?

— What is meant by below-normal, normal, and above-normal rainfall? 

Key Takeaways:

— “The southwest monsoon has advanced into some parts of the southeast Arabian Sea, southwest and southeast Bay of Bengal, many parts of Andaman Sea, entire Nicobar Islands and some parts of Andaman Islands, including Sri Vijaya Puram, on May 16,” the IMD said.

— This year’s monsoon onset in these regions is earlier by at least six days than normal. However, the onset here was marked even earlier, on May 13, last year. As per the IMD’s monsoon onset schedule, the normal date for the monsoon onset over the south Andaman Sea, and Port Blair in Andaman and Nicobar Islands is May 22.

— There has been an increase in rainfall activity during the past two days over Nicobar Islands, the Andaman Sea and neighbourhood areas. In addition, the strengthening of the westerly winds and the desired outgoing longwave radiation values indicating presence of convective cloud mass serve as a key criteria for declaring the monsoon onset.

— The met department also shared that conditions are favourable for further advancement of southwest monsoon into some more parts of southeast Arabian Sea, southwest and southeast Bay of Bengal, remaining parts of Andaman Islands and Andaman Sea, and some parts of eastcentral Bay of Bengal during the next 3-4 days.

— The monsoon onset over Kerala is mostly likely on May 26. That will mark the commencement of the four-month monsoon season this year.

Do You Know:

— There are two notable types of monsoon in India:

(1) Southwest monsoon: It occurs from June to September. It hits Kerala on the southwestern coast and then proceeds across the country.

— This monsoon is the primary monsoon affecting India — it not only brings respite from the heat but also contributes to the country’s ecosystem and economy, especially the growing of kharif crops.

— Over 70 per cent of the country receives the majority of its annual rainfall during the June to September season. 

(2) Northeast monsoon: It is another significant and persistent aspect of the Indian subcontinent’s climate system. Its name comes from the direction of the monsoon winds, which blow from northeast to southwest.

— It occurs from October to December and affects peninsular India. It is not as intense as the southwest monsoon but is crucial for the growth of rabi crops.

— The northeast monsoon is key for Tamil Nadu, Kerala, Puducherry, Karaikal, coastal Andhra Pradesh, Rayalaseema and Yanam in southern India.

— The Northeast monsoon is also known as the winter monsoon, retreating monsoon, or reverse monsoon.

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Monsoon in India: What you must know for UPSC exam

UPSC Prelims Practice Question Covering similar theme:

(3) With reference to the Monsoons in India, consider the following statements:

1. The southwest monsoon brings more than half of India’s annual rainfall.

2. The ‘above normal’ rainfall is attributed mainly to the El Nino conditions.

3. During the northeast monsoon, the direction of the monsoon winds is from southwest to northeast.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Previous year UPSC Mains Question Covering similar theme:

Why is the South-West Monsoon called ‘Purvaiya’ (easterly) in has this directional seasonal wind system influenced the region? (UPSC CSE 2023) 

 

ECONOMY

After duty hike, govt curbs silver imports to aid rupee

Syllabus:

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

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

What’s the ongoing story: The government on Saturday put silver imports for domestic consumption under the restricted category, requiring prior government approval. 

Key Points to Ponder:

— Silver: Know its properties, uses and distribution. 

— Why has the Government imposed restrictions on silver imports?

— How high gold and silver imports affect India’s current account deficit and foreign exchange reserves?

— How is the war in West Asia affecting India?

— What can be the impact of depreciating rupee on the Indian economy?

— What are Special Economic Zones (SEZs)?

—  What is the import duty? 

— What is the Liberalised Remittance Scheme?

— What are the components of India’s forex reserves?

— Know about India’s balance of payments.

Key Takeaways:

— This follows a series of steps taken over the last few days to discourage precious metal imports, which strain the current account and increase forex outflow due to high global prices.

— On Wednesday, the government raised the customs duty on imports of gold and silver to 15% from 6%, and on platinum to 15.4% from 6.4% to moderate these non-essential imports amidst the West Asia crisis.

— A day later, it put a quantitative limit of 100 kg on the import of the yellow metal under a key export scheme to curb misuse of the duty-free import facility for value-added exports.

— As per a Directorate General of Foreign Trade (DGFT) notification, imports of bars containing silver up to 99% would now be in the restricted category if it is meant for domestic consumption.

— However, silver imported for processing and value-added exports as jewellery would continue to be unrestricted.Imports by 100% export-oriented units and units located in Special Economic Zones (SEZs) shall also not be subject to any restrictions provided the imported goods are not sold in the domestic tariff area. 

— Rising imports of gold and silver amidst their rising prices in the past one year have been a cause of concern. With the onset of war in West Asia from February 28, the government has taken steps over the past week to curb imports and conserve foreign exchange in an uncertain global atmosphere.

— As a large importer of crude oil, India remains vulnerable to elevated energy prices and supply-side disruptions, which can increase the import bill, exert pressure on inflation, and the current account deficit, officials said at the time of the duty hike on gold and silver last week. 

— A depreciating rupee is adding to the country’s import bill burden. India’s foreign exchange resources, therefore, must be prioritised towards essential imports such as crude oil, fertilisers, industrial raw materials, defence requirements, critical technologies, and capital goods, the official had said. Over the last few years, India has seen significant foreign exchange outflows on account of higher imports of precious metals and spending on overseas travel under the Liberalised Remittance Scheme (LRS).

— The pressure on India’s external sector has been felt amid the ongoing West Asia war, with forex reserves plummeting by $32 billion in 10 weeks since the onset of the conflict, and crude oil prices continuing to hover above $100 a barrel. 

Do You Know:

— Silver is a soft and lustrous metal that is classified as a noble metal. Its white colour, malleability and resistance to atmospheric oxidation have enhanced its value as a highly desired precious metal which is used in many industrial applications. 

— Unlike gold, which is primarily purchased by households and central banks as a store of value and investment, silver actually has inherent physical properties that make it a key component in the manufacture of items, such as batteries and solar panels. 

— The “bedrock of demand” for silver also includes artificial intelligence. Silver is also used to make jewellery and coins. That is why buyers and their reasons to purchase silver are more varied than those of gold.

— The supply of silver is also markedly different from gold. Primarily a byproduct when other minerals are mined, silver’s supply has not moved to match the increase in demand from various quarters, including industry, for several years. 

— Apart from its monetary and decorative uses, silver is known to have the highest electrical conductivity amongst all metals that enhances its potential in modern age applications. Notably, in November last year, the US added silver to its list of critical minerals. 

— In India, there are no native silver deposits except the small and unique Bharak deposit in Rajasthan.  

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Silver in spotlight: What you must know about the precious–industrial metal for UPSC Exam

📍Why India hiked import duty on gold, silver amid rupee fall and rising oil prices 

📍UPSC Prelims ‘SEE’ Snapshot : Induction cooktop, Forex reserve, and Earth’s energy imbalance — quick look

UPSC Prelims Practice Question Covering similar theme:

(4) Which of the following factors have contributed significantly to the recent surge in global silver demand?

1. Artificial Intelligence and smart grid infrastructure

2. Solar energy and battery manufacturing

3. Central bank reserve accumulation

Select the correct answer using the code below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 only

(d) 1, 2 and 3

Singapore pips UAE as India’s second-largest export destination

Syllabus:

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

Mains Examination: General Studies-II, III: Effect of policies and politics of developed and developing countries on India’s interests, Indian Economy and issues relating to planning, mobilisation of resources, growth, development.

What’s the ongoing story: India’s trade flows have begun shifting amid the prolonged closure of the Strait of Hormuz since March, as traders have begun finding alternate routes to export goods amid disruption in trade with countries in the West Asia region, an analysis of data shared by the Commerce and Industry Ministry showed. 

Key Points to Ponder:

— Read about the Strait of Hormuz. 

— What is the strategic significance of the Strait of Hormuz?

— What is the impact of the closure of the Strait of Hormuz on India’s trade?

— What are the top 3 export destinations and top 3 import sources of India? 

— How has the West Asia war affected the Indian economy? 

— What is the significance of diversification of import sources for India’s energy security?

— What are the measures taken by the government to reduce pressure on foreign exchange reserves?

— What steps should India take to reduce supply chain vulnerabilities arising from geopolitical conflicts?

Key Takeaways:

— The most notable shift in trade routes was seen in the two transshipment hubs that India has free trade agreements (FTA) with – UAE and Singapore. Replacing UAE, Singapore became India’s second largest export market in April, registering a five-fold jump compared to February. The US continues to be India’s largest export destination.

—- The Strait of Hormuz was closed on March 2. While exports to Singapore surged by 180% in April to $3.20 billion compared to $1.14 billion a year ago, exports to UAE slipped by 36% to $2.18 billion last month compared to $3.43 billion a year ago. Exports from Singapore have been rising month-on-month too since February amid the disruption in trade with UAE.

— On the import side too, the West Asia war has led to new import partners. Energy exporters such as Oman, Peru and Nigeria broke into India’s top 20 import sources. Shipment from Oman alone more than tripled to $1.48 billion in April compared to $429.58 million.

— These changes come as traditional sources of energy are facing restrictions. The war in West Asia has led to a sharp jump in global energy prices, with the closure of the Strait of Hormuz and damage to Gulf nations’ energy infrastructure adversely impacting supplies. For India, in addition to a widening of the import bill and a cloudy outlook for exports, the conflict has directly impacted the rupee, which has fallen to multiple record lows against the US dollar on its way to tumbling 5.2% since the end of February.

— To ward off further pressure on the currency, the government has been taking austerity measures to ease the strain on the use of foreign currency and reduce fuel consumption. In addition to a hike in the import duty on precious metals, oil marketing companies on Friday increased the pump price of petrol and diesel for the first time in four years.

Do You Know:

—- The Strait of Hormuz, the narrow waterway between Iran and Oman, is a critical maritime choke point that accounted for about a fifth of global oil flows before the West Asia war began on February 28. Since then, vessel movements through the strait have been effectively halted, leading to an unprecedented global energy supply crisis.

Other Important Articles Covering the same topic:

📍How India’s economy deals with West Asia war

📍Knowledge Nugget | Maritime chokepoints: Why do they matter for India?

UPSC Prelims Practice Question Covering similar theme:

(5) The Strait of Hormuz connects the:

(a) Persian Gulf with the Gulf of Oman

(b) Red Sea and Gulf of Aden

(c) Gulf of Aden and Arabian Sea

(d) Gulf of Oman and Arabian Sea

Sovereign Gold Bonds missed amid PM’s austerity appeal, import duty hike

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: The rapid fall of the rupee has forced policymakers to come up with some quick solutions, with Prime Minister Narendra Modi calling for austerity measures that reduce the need to expend foreign currency for imports. Then, the government also hiked the import duty on gold, silver, and platinum. But economists don’t expect this to move to meaningfully bring down the gold import bill. 

Key Points to Ponder:

— Gold: Know its properties, uses and distribution. 

— What was the Sovereign Gold Bonds Scheme?

— What was the rationale behind the introduction of the Sovereign Gold Bonds Scheme?

— Why was the Sovereign Gold Bonds Scheme discontinued?

— What is an Exchange Traded Fund (ETF)?

— What is digital gold? 

— What is the role of gold in forex reserves? 

— How does gold impact India’s current account deficit?

Key Takeaways:

— “Historically, the effectiveness of gold import duty hikes in controlling imports has been mixed,” Nomura economists Sonal Varma and Aurodeep Nandi said on Wednesday. “When India raised duties to 10% in 2013, gold imports did decline initially, but gold smuggling increased to meet suppressed demand. More recently, the reduction of the duty to 6% was intended to curb smuggling and formalise the market.” 

— One possible solution the government may not implement is something it has previously deployed: Sovereign Gold Bonds (SGBs).

— Launched in late 2015, the scheme was discontinued in early 2024 despite being an appealing investment opportunity for the public, who bought bonds equivalent to 147 tonnes of gold (worth Rs 72,275 crore). These bonds are now giving incredibly high returns to their holders of more than 200% of their life of eight years, and that is without taking into account the 2.5% interest and zero long-term capital gains tax on redemption. The scheme discontinued despite the obvious benefits for the public because the government felt it was having to pay too much.

— The logic of SGBs was sound: meet the investment demand for gold without importing the metal – all the government had to do was set aside money for interest payments and the market value of the bonds maturing in a year. However, the rationale for discontinuing the scheme had a different consideration: the cost of borrowing.

— Any bond the government issues to an investor – be it banks, foreign investors, or individuals – is considered a borrowing. “The recent global geo-political unrest has impacted gold prices significantly, increasing the cost of borrowing through SGBs,” the finance ministry told the Parliament in a written response to a question in July 2025. But the SGBs were never intended to be a way to finance the government’s fiscal deficit.

— Demand in SGBs only picked up pace after Covid struck, with roughly Rs 63,000 crore of these bonds being purchased from FY21 to FY24. Over these four years, the central government borrowed Rs 40 lakh crore on a net basis to help meet its annual fiscal deficits.

— What the SGBs did was ease the strain on the import bill and reduce the need to spend the country’s foreign currency reserves.

— Indians’ demand for gold is a structural weakness of the economy. While our inherent affection for the precious metal offers an easy diversification of savings, the lack of domestic supply means almost the entire demand has to be met via imports, which adversely impacts the trade balance. And we import a lot of gold: $72 billion in FY26, up 24% from FY25, or more than 700 tonnes. More than 9% of all our imports in FY26 were gold, with another 1.6% being silver.

— In the absence of SGBs, Indians have gone the Exchange Traded Fund (ETF) route over the last year in a manner never seen before. But gold ETFs – essentially mutual funds that invest in gold – require investments to be backed by gold holdings.

— According to the World Gold Council, there has been a “structural shift” in India’s gold demand, with investment demand making up nearly 70% of the total demand in January-March 2026, while the share of jewellery fell to around 30% – the lowest in at least 25 years. Unless this investment demand for gold is met, imports – through ETFs and other routes – will continue and the rupee will keep weakening.

Do You Know:

— Gold in its purest form is a bright, slightly reddish yellow, dense, soft malleable and ductile metal. It is one of the least reactive chemical elements and is solid under standard conditions. 

— Gold often occurs in free elemental (native) form, as nuggets or grains, in rocks, in vein and in alluvial deposits. Gold is resistant to corrosion and to most acid and has unique properties distinct from other metals. 

—  Gold is a relatively scarce metal in the world and a scarce commodity in India. The domestic demand is mainly met through imports.

— According to the Indian Minerals Yearbook 2022 (Part II: Metals & Alloys), by states, the largest resources in terms of gold ore (primary) are located in Bihar (43%), followed by Rajasthan (24.92%), Karnataka (20%), West Bengal (2.47%), Andhra Pradesh (3.03%) and Jharkhand (2%). 

— SGBs are debt securities issued by the Reserve Bank of India (RBI) on behalf of the government, with each unit denoting a gram of gold. These bonds offer the flexibility of trading in the secondary market, providing investors with the opportunity to accrue capital gains. 

— An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike regular mutual funds, an ETF trades like a common stock on a stock exchange. 

— Gold ETFs are the ETFs with gold as the underlying asset. It gives investors an option of holding gold electronically instead of physical gold. It is a safer option to hold the precious metal since there are no risks of theft or purity. 

Other Important Articles Covering the same topic:

📍Knowledge Nugget | Gold in spotlight: Understanding price trends, its uses, and distribution

Previous year UPSC Prelims Question Covering similar theme:

(6) What is/are the purpose/purposes of the Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? (UPSC CSE 2016)

1. To bring the idle gold lying with Indian households into the economy.

2. To promote FDI in the gold and jewellery sector.

3. To reduce India’s dependence on gold imports.

Select the correct answer using the code given below: 

(a) 1 only 

(b) 2 and 3 only 

(c) 1 and 3 only

(d) 1, 2 and 3 

(7) Which one of the following groups of items is included in India’s foreign-exchange reserves? (UPSC CSE 2013) 

(a) Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries 

(b) Foreign-currency assets, gold holdings of the RBI and SDRs

(c) Foreign-currency assets, loans from the World Bank and SDRs 

(d) Foreign-currency assets, gold holdings of the RBI and loans from the World Bank 

Previous year UPSC Mains Question Covering similar theme:

Craze for gold in Indians has led to surge in import of gold in recent years and put pressure on balance of payments and external value of rupee. In view of this, examine the merits of Gold Monetization scheme. (UPSC CSE 2015)

ALSO IN NEWS

Intra-BRICS trade accounts for just 5% of global trade: Comm secy

The intra-BRICS trade has increased multiple times over the last few years, but it accounts for only around 5% of the global trade, reflecting huge untapped potential for deeper integration and stronger value-chain linkages, Commerce Secretary Rajesh Agrawal has said. BRICS is a grouping of 11 developing countries — Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa and the United Arab Emirates. India has assumed the BRICS chair for the fourth time, after 2012, 2016 and 2021.

 

PRELIMS ANSWER KEY

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

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