FOUNDATIONS OF INDIA’S NEXT GROWTH PHASE
TOPIC: (GS3) ECONOMY: THE HINDU
India crossed $4.1 trillion GDP in 2025 and overtook Japan to become the world’s fourth-largest economy, alongside an S&P sovereign rating upgrade to BBB after 18 years.
Macroeconomic Stability and Investment Confidence
- India’s large GDP size and improved credit rating reflect macroeconomic durability, not just rapid expansion.
- Stable political leadership has improved policy credibility, encouraging private investment.
- Clear rules reduce discretion, improving competition, execution, and job creation.
Trade Expansion and Digital Enablement
- India’s exports reached $825 billion in 2024–25, growing over 6% annually.
- New digital platforms strengthened trade facilitation:
- Trade Connect e-Platform for exporters.
- Trade Intelligence & Analytics (TIA) portal for real-time market data.
- These tools reduce information gaps and transaction delays.
Free Trade Agreements and Global Integration
- India–UK Comprehensive Economic and Trade Agreement (2025) expanded duty-free access and services mobility.
- Comprehensive Economic Partnership Agreement with Oman strengthened regional trade corridors.
- FTA negotiations with New Zealand improved access to high-value markets.
- India is now pursuing disciplined, commercially viable FTAs rather than symbolic agreements.
Startup, Innovation, and Market Reforms
- Over 2 lakh recognised startups created more than 21 lakh jobs.
- ONDC processed over 326 million orders, democratising digital commerce.
- GeM portal crossed ₹16.41 lakh crore in transactions, empowering MSMEs.
- India rose to 38th rank in the Global Innovation Index.
Ease of Doing Business and Legal Clean-Up
- Over 47,000 compliances removed and 4,458 offences decriminalised.
- Repealing and Amending Act, 2025 scrapped 71 obsolete laws.
- District Business Reform Action Plan 2025 brought reforms closer to local governance.
- National Single Window System processed over 8.29 lakh approvals.
Labour, Capital Markets, and Logistics Reforms
- Four Labour Codes (2025) consolidated 29 central labour laws, simplifying wages, safety, social security, and industrial relations.
- Securities Markets Code Bill strengthened SEBI’s enforcement and investor protection.
- Indian Ports Act, Merchant Shipping Act, and Carriage of Goods by Sea Act (2025) modernised maritime trade.
- ₹69,725 crore shipbuilding package aimed to deepen domestic manufacturing capacity.
Energy and Strategic Infrastructure Reforms
- Oilfields Amendment Act, 2025 and new petroleum rules reduced investor uncertainty.
- Open Acreage Licensing Policy (Round X) expanded offshore exploration.
- Nuclear Energy Mission (₹20,000 crore) targets 100 GW capacity by 2047, with SMRs as a key focus.
- SHANTI Bill opens carefully regulated private participation in nuclear energy.
Conclusion
Reform Express 2025 reflects a quiet but decisive transformation in India’s governance model—clean laws, simplified compliance, modern infrastructure, and stable investment conditions. These cumulative reforms are laying the structural base for sustained high growth, positioning India for a resilient, innovation-driven, and globally competitive future.
INDIA, AI REGULATION AND WORKFORCE READINESS
TOPIC: (GS2) INDIAN POLITY: THE HINDU
India is debating how to regulate Artificial Intelligence (AI) while also building domestic capacity. The issue gained attention after China proposed draft rules for consumer safety in emotionally interactive AI services, raising questions about India’s regulatory gaps.
India’s Current Approach to AI Regulation
- Legal framework: India relies on the IT Act and Rules, privacy laws, and financial regulations to manage AI risks.
- MeitY initiatives: Platforms are required to curb deepfakes, fraud, and label “synthetically generated” content.
- Financial regulators: RBI has introduced the FREEAI framework to manage model risk in credit. SEBI has asked regulated entities to ensure accountability in AI use.
- Nature of regulation: While some measures are proactive, most remain reactive, addressing risks after they emerge.
Comparison with China
- China’s draft rules propose a consumer safety regime targeting psychological harms from AI.
- Companies may be required to warn against excessive use and intervene when users show signs of emotional distress.
- India’s approach is less intrusive but also incomplete, as it lacks a clear duty of care for AI product safety.
Challenges for India
- India has a large AI adoption ecosystem but lags behind the U.S. and China in building frontier models.
- Risk of “regulate first, build later” could slow innovation when domestic capacity is already limited.
- Heavy reliance on foreignbuilt models may increase dependency.
Way Forward
- Build capacity: Improve access to computational resources, expand public procurement, and translate research into industry applications.
- Upskill workforce: Train professionals in AI use, ethics, and risk management to strengthen domestic capability.
- Balanced regulation: Focus on downstream use (deployment in highrisk contexts) rather than restricting upstream innovation.
- Consumer protection: Add obligations like incident reporting for companies, instead of intrusive monitoring of user emotions.
- Practical governance: Write rules suited to Indian markets without assuming global technology trends will shift to India’s preferences.
Conclusion
India must strike a balance between regulating AI risks and building domestic capacity. By improving resources, upskilling its workforce, and adopting practical consumer safety measures, India can ensure AI progress remains both innovative and responsible.
INVALIDATE ALL FORMS OF UNILATERAL TALAQ
TOPIC: (GS2) INDIAN POLITY: THE HINDU
On November 19, 2025, the Supreme Court in Benazeer Heena vs Union of India The Court questioned the practice of advocates issuing divorce notices, calling it inconsistent with a civilised society and constitutional values.
Marriage as a Contract of Equals
- In Islam, marriage is seen as a solemn contract (uqdatannikah, meesaaqan ghaleean) between two consenting adults.
- The Quran does not give men superior authority to dissolve marriage unilaterally.
- A unilateral divorce violates the principle of natural justice (no one can be judge in their own case).
- Equality between spouses is central, making unilateral talaq practices unjust and discriminatory.
Quranic Procedure for Divorce
- The Quran prescribes a stepbystep conciliatory process before divorce:
- Private resolution of disputes.
- Temporary separation to reduce conflict.
- Clear communication to highlight seriousness of the issue.
- Family arbitration with representatives from both sides.
- Only after these steps fail can talaq be pronounced.
- Iddah period: Three menstrual cycles (or three months for postmenopausal women, until childbirth for pregnant women).
- During iddah, reconciliation is encouraged; divorce becomes final only after the third talaq, declared before two witnesses.
- The Quran allows reunion after iddah if both spouses agree on equitable terms.
Unilateral Talaq Practices and Their Issues
- Practices like talaqebid‘a, talaqehasan, talaqeahsan, talaqetafweed are not supported by the Quran or hadith.
- These originated from juristic traditions influenced by patriarchy, undermining women’s autonomy.
- Allowing divorce through agents (vakeel) under tawkeel (agency) has no Quranic basis and demeans women’s dignity.
Constitutional and Ethical Concerns
- Unilateral talaq violates gender equality and the right to dignity under Article 21.
- It contradicts the constitutional vision of justice, equality, and nondiscrimination.
- The Supreme Court has already invalidated instant triple talaq (talaqebid‘a) in Shayara Bano vs Union of India (2017).
- Extending this reasoning, all unilateral talaq forms should be struck down.
Way Forward
- Recognise only the Quranic divorce procedure, which is genderneutral and based on reconciliation.
- Ensure legal safeguards for women against arbitrary divorce.
- Promote awareness within communities about the egalitarian spirit of Islamic law.
- Align personal laws with constitutional morality and human rights standards.
Conclusion
The Supreme Court would be on firm ground in invalidating all unilateral talaq practices. Retaining only the Quranic process, applied equally to men and women, would uphold both constitutional values and Islamic principles of justice and equality.
WHY INCLUSION DRIVES BUSINESS GROWTH
TOPIC: (GS3) ECONOMY: THE HINDU
The U.S. Supreme Court recently upheld its ruling on samesex marriage, reminding society of the importance of equality. At the same time, debates on LGBTQIA+ inclusion in workplaces and markets highlight how diversity is not only ethical but also economically beneficial.
The Business Case for Inclusion
- Inclusion is no longer just about rights; it is also about economic impact and consumer behaviour.
- The LGBTQIA+ community has an estimated $3.9 trillion global spending power, making it a major consumer force.
- Companies that fail to engage authentically with this segment risk losing competitiveness and market relevance.
The Rainbow Market in India
- India has nearly 135 million LGBTQIA+ individuals, about 10% of its population.
- Their purchasing power is estimated at $168 billion, comparable to major industries.
- Exclusion and discrimination impose heavy costs: studies suggest 0.1%–1.7% of GDP losses due to health disparities and labour market exclusion.
- Recognising this community as a valuable consumer segment is crucial for India’s growth story.
Inclusive Marketing and Workplace Culture
- True inclusion goes beyond token campaigns; it requires representation in advertising and product design.
- Younger consumers expect brands to celebrate diversity and reflect real identities.
- Inclusive workplaces attract and retain top talent, creating motivated teams and stronger brand loyalty.
- Companies that act consistently, not just during Pride Month, show genuine respect for the community.
Challenges: Performative Allyship
- Global surveys show declining support for brands that appear performative in their LGBTQIA+ advocacy.
- Seasonal campaigns without yearround commitment create consumer fatigue.
- The shift reflects rising expectations for authentic corporate responsibility rather than declining support for equality.
What Genuine Inclusion Looks Like
- Representation: Visible diversity in advertising and product development.
- Corporate advocacy: Active support for LGBTQIA+ rights beyond marketing.
- Internal policies: Transinclusive healthcare, employee resource groups, and protection against discrimination.
- Consistency: Aligning internal practices with external messaging builds trust and loyalty.
Conclusion
Inclusion is both a moral imperative and a business advantage. Companies that embed diversity into their culture, policies, and consumer engagement gain stronger loyalty, attract talent, and tap into a powerful market. Authentic inclusion, not symbolic gestures, will define sustainable business growth in the future.
INDUSTRIAL CREDIT-GROWTH DISCONNECT
TOPIC: (GS3) ECONOMY: THE HINDU
Economists have highlighted a disconnect between industrial credit growth and industrial GDP during FY17–FY19.
Role of Banking in Industrial Growth
- Banks channel household savings into affordable loans for industries, supporting investment and expansion.
- Industrial credit is a key driver of manufacturing output and GDP growth.
Key Observations
- Declining share of industrial credit: Fell from 42% in 2013 to 23% in 2024, the lowest in 50 years. Services and personal loans gained at the expense of industry.
- Weak credit growth: CAGR of industrial credit was only 4.1% during 2014–24, compared to doubledigit growth in earlier decades. Even excluding pandemic years, growth remained stagnant.
- Regional and sectoral trends: Industrialised regions (west, south, north) grew slower than the national average. No industry group recorded doubledigit credit growth in 2014–24, unlike 2004–14.
- Financial deepening stagnation: Credit/GDP ratio plateaued at 50–55% since early 2010s. Other countries show much higher ratios (China ~1.9, Japan ~1.2).
The Puzzle (FY17–FY19 Disconnect)
- Normally, industrial credit and manufacturing GVA move together (correlation ~0.82 in 2004–20).
- Between FY17–FY19: Industrial credit slowed and manufacturing GVA fell, yet industrial GDP stayed constant.
- This unusual divergence suggests possible data overestimation in GDP series.
Implications
- Raises doubts about the accuracy of India’s industrial GDP estimates.
- Indicates structural issues in credit flow to industries.
- Calls for deeper investigation into banking practices, industrial demand, and statistical methods.
Conclusion
The FY17–FY19 anomaly highlights a serious creditgrowth disconnect. With industrial credit stagnating and GDP estimates showing resilience, India must reassess its data quality, credit allocation, and industrial policy to ensure reliable growth measurement and sustainable industrial expansion.
MYANMAR VOTING AMID CONFLICT
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
Myanmar’s military regime (Tatmadaw) is conducting threephase elections despite ongoing civil conflict and instability. The polls have drawn global criticism for being neither free nor fair, with major democratic parties excluded.
Context of Elections
- After the February 2021 coup, civilian leaders including Aung San Suu Kyi and members of the National League for Democracy (NLD) were detained.
- The Union Election Commission (UEC) was reconstituted with promilitary personnel.
- Armed resistance by People’s Defence Forces and Ethnic Armed Organisations (EAOs) has eroded Tatmadaw’s control over large rural areas.
- Elections are not being held in several constituencies due to security concerns, and turnout remains very low.
Why the Tatmadaw is Pushing Ahead
- The military seeks domestic and international legitimacy through elections.
- By holding polls, it aims to project a façade of civilian governance while retaining dominance.
- Arrests under the Election Protection Law (2025) and use of electronic voting machines raise concerns of coercion and manipulation.
Major Parties Absent
- NLD dissolved after refusing to register under new stringent laws.
- Regional parties like Arakan National Party (ANP) and Shan Nationalities League for Democracy (SNLD) were denied registration.
- With opposition sidelined, militarybacked parties such as the Union Solidarity and Development Party (USDP) face little competition.
- USDP is already winning uncontested seats, strengthening Tatmadaw’s grip.
Electoral System and Military Advantage
- Lower House: FirstPastthePost (FPTP) system.
- Upper House & State legislatures: Proportional Representation (PR) + FPTP.
- PR system prevents any single party from securing a majority, unlike NLD’s victories in 2015 and 2020.
- Constitution reserves 25% of seats for the military, ensuring Tatmadaw’s dominance regardless of results.
International Response
- ASEAN excluded Myanmar’s military leaders from summits.
- UN, Japan, EU, Australia criticised the elections as polarising and noninclusive.
- China and Russia sent observers, signalling support for the regime.
- U.S. policy appears inconsistent, with recent lifting of sanctions raising concerns about prioritising economic interests.
What Lies Ahead
- Genuine peace requires a federal democratic framework and resolution of ethnic conflicts.
- Current elections are unlikely to deliver reform; instead, they reinforce military dominance.
- Myanmar’s path to stability depends on balancing internal reconciliation with external geopolitical pressures.
Conclusion:
Myanmar’s elections amid conflict are more about securing military legitimacy than genuine democracy. True stability will only come through inclusive governance, federalism, and resolution of ethnic conflicts.
INDIA–NEW ZEALAND FREE TRADE AGREEMENT (FTA)
TOPIC: (GS3) ECONOMY: THE HINDU
India and New Zealand signed a historic FTA in December 2025, concluded in record time of nine months. The deal provides zeroduty access for Indian exports and commits $20 billion FDI from New Zealand by 2030.
Features of the Agreement
- Zeroduty access: All Indian exports to New Zealand will face no tariffs.
- Tariff relaxation: India will reduce tariffs on 95% of imports from New Zealand, with 57% dutyfree immediately.
- FDI commitment: New Zealand will invest $20 billion in India by 2030, with safeguards if targets are not met.
- Services and skill mobility: Easier movement for Indian professionals, students, and workers in IT, healthcare, education, construction, yoga, Ayurveda, and traditional medicine.
- Youth opportunities: Work permits, student mobility, and extended poststudy visas for Indian students.
- MSME and labourintensive sectors: Boost for textiles, leather, gems and jewellery, engineering goods, and processed foods.
Sensitive Sectors Excluded
- India has protected agriculture and dairy, refusing access for milk, cheese, butter, yogurt, onions, sugar, edible oils, spices, and rubber.
- Safeguards ensure protection of farmers and small industries.
- Cooperation in horticulture: New Zealand will help improve productivity in fruits like kiwifruit, apples, and honey through centres of excellence and technical support.
Importance of the FTA
- Strengthens India’s global trade footprint and diversifies partners beyond the U.S., EU, and China.
- Provides India a gateway to Oceania and Pacific Island markets.
- Enhances soft power diplomacy, with 3 lakh Indian diaspora in New Zealand.
- Aims to double bilateral trade (currently $1.3 billion) in five years.
- First FTA negotiated by a womenled team, marking a milestone in diplomacy.
Criticisms of the Agreement
- In New Zealand: Criticised for excluding dairy and agriculture, the country’s largest industry.
- In India: Concerns about trade deficits and asymmetric gains, as imports may rise faster than exports.
- Success depends on implementation and safeguards protecting sensitive sectors.
Why India is Accelerating FTAs
- To diversify trade partners and reduce dependence on the U.S. market.
- To align with Make in India, PLI schemes, and global value chains.
- To secure strategic alliances in Pacific, West Asia, and Africa.
- FTAs now go beyond tariffs, focusing on investment, services, and technology transfer.
Way Forward
- Strengthen domestic competitiveness and product quality.
- Ensure rules of origin, antidumping provisions, and MSME support.
- Invest in research and development to meet global standards.
- Learn from past FTAs to avoid low yields and ensure balanced gains.
Conclusion
The India–New Zealand FTA is a landmark step towards trade diversification and global integration. Its success will depend on protecting sensitive sectors while leveraging opportunities in labourintensive industries and services.
INSV KAUNDINYA
TOPIC: (GS3) SEQURITY: THE HINDU
The Indian Navy’s INSV Kaundinya, a traditional stitched sailing vessel, began its maiden overseas voyage from Porbandar, Gujarat, to Muscat, Oman.
Key Highlights of the Voyage
- Flagging off: The vessel was formally launched by ViceAdmiral Krishna Swaminathan in the presence of Oman’s Ambassador to India.
- Crew: Commanded by Commander Vikas Sheoran with Commander Y. Hemant Kumar as OfficerinCharge, supported by four officers and 13 sailors.
- Prime Minister’s message: PM Narendra Modi extended wishes, calling the journey a retracing of India’s historic links with the Gulf region.
Construction and Heritage Significance
- Built using traditional stitched shipbuilding techniques, employing natural materials and centuriesold methods.
- Inspired by historical sources, the vessel reflects India’s indigenous shipbuilding and seamanship traditions.
- The voyage retraces ancient maritime routes that once connected Gujarat’s western coast with Oman, fostering trade and cultural exchange.
Diplomatic and Cultural Importance
- Strengthens India–Oman bilateral relations by highlighting shared maritime heritage.
- Underscores the historic cooperation between Gujarat and Oman, rooted in centuries of oceanic trade.
- Promotes India’s soft power by showcasing its civilisational maritime legacy.
Conclusion
INSV Kaundinya’s maiden voyage is both a symbol of India’s maritime revival and a step towards deepening ties with Oman, blending tradition with diplomacy.
RBI REPORT ON BANK FRAUDS
TOPIC: (GS3) ECONOMY: THE HINDU
The RBI’s Report on Trend and Progress of Banking in India 202425 shows that while the number of bank fraud cases has declined, the amount involved has sharply increased.
Findings of the Report
- Cases vs Amount:
- Fraud cases fell to 23,879 in 202425 from 36,052 in 202324.
- Amount involved rose to ₹34,771 crore from ₹11,261 crore.
- Reason for spike: Reexamination and fresh reporting of 122 major frauds worth ₹18,336 crore after a Supreme Court ruling in March 2023.
- Latest trend (Apr–Sep 202526):
- Cases dropped to 5,092 from 18,386 in the same period last year.
- Amount increased to ₹21,515 crore from ₹16,569 crore.
Types of Frauds
- Card/Internet frauds: 66.8% of total cases.
- Advancerelated frauds: 33.1% of total value.
- Private Banks (PVBs): Accounted for most cases (59.3%), mainly card/Internet frauds.
- Public Sector Banks (PSBs): Accounted for most value (70.7%), largely advancerelated frauds.
Banking Sector Resilience
- Despite frauds, commercial banks showed doubledigit growth in deposits and credit.
- Balance sheets expanded, profitability remained strong, and policy rate transmission continued.
Conclusion
The RBI report highlights a paradox of fewer fraud cases but larger amounts involved, stressing the need for stronger monitoring of advancerelated frauds while ensuring the banking sector’s resilience.