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Critical Topics and Their Significance for the UPSC CSE Examination on May 20, 2025

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Least Developed Country (LDC)

For Preliminary Examination: Current events of national and international significance

For Mains Examination: General Studies II: India and its neighbourhood

Context:

With Bangladesh set to graduate from the United Nations’ Least Developed Country (LDC) category in November 2026 — a move that will end its duty-free access to export markets such as the European Union, posing fresh challenges — the country has begun a sharp economic pivot away from New Delhi towards Beijing, thereby straining trade ties with India

Read about:

What is the least developed country?

Discuss the recent developments in India–Bangladesh trade relations

Key takeaways:

• A government source revealed that Bangladesh has recently restricted Indian yarn exports through land ports, now permitting them only via seaports. This move appears to be a response to demands from Bangladeshi textile manufacturers, even though transporting yarn by land is both faster and more cost-effective for Bangladesh’s ready-made garment sector.

• China has been significantly expanding its presence in South Asia, especially in Bangladesh. Since June 2020, it has granted duty-free access to 97% of Bangladeshi exports. Beyond trade benefits, China is also assisting Bangladesh in broadening its export portfolio and upgrading its industrial capabilities.

• The Carnegie Endowment for International Peace notes that Bangladesh hosts the highest number of China-backed infrastructure projects in South Asia. Moreover, Bangladesh is the second-largest importer of Chinese military equipment globally, making up nearly 20% of China's arms exports between 2016 and 2020. According to a 2020 report by the Stockholm International Peace Research Institute, over 70% of Bangladesh’s significant arms acquisitions come from China.

• Tensions are escalating between India and its top South Asian trading partner, as the Indian government has imposed fresh import restrictions targeting Bangladeshi products — especially ready-made garments, which are vital to Bangladesh's economy and foreign exchange earnings.

• These developments come after India decided in April to discontinue a transshipment arrangement that had allowed Bangladesh to transport export goods to Western countries using Indian land and air routes, marking an early sign of strained relations.

• Indian officials attribute these steps — the trade restrictions and the end of the transshipment deal — to similar actions taken by Bangladesh and logistical issues caused by congested ports. However, some believe that statements by Bangladesh’s Chief Adviser Muhammad Yunus, who advocates for a greater Chinese economic footprint in India's Northeast, may be further straining bilateral trade ties.

• These events align with China’s broader objective of reducing Indian influence in the region. India, which opted out of the China-led Regional Comprehensive Economic Partnership (RCEP), is instead focusing on becoming a global manufacturing hub by strengthening trade relations with countries like the US, UK, EU, and members of the European Free Trade Association (EFTA).

• India’s decision to limit garment imports from Bangladesh is also influenced by its goal of attracting more labor-intensive manufacturing jobs. With recent free trade agreements, India has gained duty-free access for its garment exports to the UK and is pursuing similar deals with the EU and US.

• According to the Global Trade Research Initiative (GTRI), Indian textile manufacturers have long voiced concerns over the competitive advantage enjoyed by Bangladeshi exporters. This edge is attributed to their access to duty-free Chinese fabrics and government subsidies, which give them a pricing advantage of 10–15% in the Indian market

 Follow Up Question

Nuclear energy push

For Preliminary Examination: Current events of national and international significance regarding general science

For Mains Examination: GS III - Science and technology

Context:

IN WHAT could set the stage for an unprecedented opening up of the civil nuclear sector, the government is likely to move two crucial amendments in the laws governing the country’s atomic energy sector in the upcoming monsoon session of Parliament, according to sources aware of the developments.

Read about:

What is Nuclear Energy?

What are the types of nuclear reactors?

Key takeaways:

• India has long faced regulatory hurdles in acquiring the necessary ‘10CFR810’ authorization under the U.S. Atomic Energy Act of 1954, which governs nuclear exports. This regulation, while allowing American companies like Holtec to export nuclear equipment under stringent safeguards, strictly prohibits them from carrying out manufacturing or nuclear design work within India.
• From New Delhi’s perspective, this restriction posed a significant obstacle, as India was keen on jointly producing Small Modular Reactors (SMRs) and manufacturing nuclear components domestically to support its own energy infrastructure.
• In a major policy shift, the Union Budget for 2025–26 signaled a strong commitment to expanding India’s nuclear energy program as a cornerstone of its long-term clean energy strategy.
• The government has announced a bold target of reaching 100 GW of nuclear power capacity by 2047, aligning with the broader vision of Viksit Bharat (Developed India). This move aims to ensure energy security while cutting reliance on fossil fuels. To make this vision a reality, the government is focusing on indigenous nuclear technology, infrastructure upgrades, and increased collaboration with the private sector.
• As part of this renewed push, a new initiative titled the Nuclear Energy Mission for Viksit Bharat has been launched. This mission seeks to strengthen domestic capabilities in the nuclear sector, foster private participation, and speed up the adoption of advanced technologies like SMRs.
• To implement this mission, the government plans to amend key legislations, including the Atomic Energy Act and the Civil Liability for Nuclear Damage Act. These changes are intended to attract private investment in nuclear energy by removing legal uncertainties.
• One proposed amendment aims to limit the liability of equipment suppliers in the event of a nuclear accident, potentially capping it at the original contract value and introducing a timeframe for claims.
• Another proposed reform would allow private firms, including foreign players with minority stakes, to operate nuclear power plants in India—an area traditionally reserved for state-owned entities like NPCIL and NTPC.
• India’s atomic energy sector has long remained closed to private and foreign investment. These twin amendments are being seen as a significant reform effort, potentially revitalizing the commercial potential of the Indo-U.S. civil nuclear agreement signed nearly two decades ago.
• New Delhi also sees these developments as an opportunity to integrate nuclear cooperation into a broader trade and investment partnership with the United States, which could eventually lead to a comprehensive trade deal currently under discussion.
• The proposed legislative changes aim to resolve lingering legal concerns that have deterred foreign companies from entering India’s nuclear sector.
• The Civil Liability for Nuclear Damage Act, 2010, which outlines compensation mechanisms for nuclear accidents and assigns liability, has been viewed by companies like GE-Hitachi, Westinghouse, and Areva (now Framatome) as a major barrier.
• Meanwhile, the government is also initiating amendments to the Atomic Energy Act, 1962, to open up nuclear power generation to private companies—and eventually foreign operators. As of now, only government-owned corporations are allowed to manage such projects.
• The Union Budget reaffirmed the government’s commitment to getting both pieces of legislation passed, though the path to enacting them—particularly one of the two—is expected to be politically and procedurally complex.
• These policy shifts come shortly after a significant breakthrough: On March 26, the U.S. Department of Energy (DoE) granted a key regulatory clearance to Holtec International, based in Camden, New Jersey. This unprecedented approval allows the company to move forward with its business plans under the Indo-U.S. civil nuclear framework.
• Specifically, the authorization (SA IN2023-001) under 10CFR810 permits Holtec to conditionally transfer its unclassified Small Modular Reactor technology to its Indian affiliate, Holtec Asia, as well as to Tata Consulting Engineers Ltd and Larsen & Toubro Ltd, marking a crucial step forward in bilateral nuclear cooperation

Follow Up Question

1.To meet its rapidly growing energy demand, some opine that India should pursue research and development on thorium as the future fuel of nuclear energy. In this on text, what advantage, does thorium hold over uranium? (UPSC 2012)

1. Thorium is far more abundant in nature than uranium.
2. On the basis of per unit mass of mined mineral, thorium can generate more energy compared to natural uranium.
3. Thorium produces less harmful waste compared to uranium.

Which of the statements given above is/are correct?

(a) 1 only         

(b) 2 and 3 only           

(c) 1 and 3 only             

(d) 1, 2 and 3

Overseas Citizenship of India (OCI)

For Preliminary Examination: Citizenship Amendment Act, Minorities, Secularism, NPR, NRC

For Mains Examination: Indian Polity & Governance

Context:

British-Indian academic and author Nitasha Kaul, who teaches at the University of Westminster in London, said on Sunday that her Overseas Citizenship of India (OCI) status has been cancelled.

Read about:

Persons of Indian Origin (PIOs)

Overseas Citizenship of India (OCI)

Key takeaways:

What is an OCI?

• The Overseas Citizenship of India (OCI) scheme, launched in August 2005, allows Persons of Indian Origin (PIOs)—who were Indian citizens on or after January 26, 1950, or were eligible for Indian citizenship on that date—to register for OCI status.
• An OCI cardholder, who typically holds foreign nationality, is granted a lifetime visa for multiple visits to India and is not required to register with local authorities regardless of the length of their stay.
• According to official data, by 2023, there were over 4.5 million registered OCI cardholders from 129 countries, with the United States accounting for the largest share (around 1.68 million), followed by the United Kingdom (934,000), Australia (494,000), and Canada (418,000).

What are the latest regulations concerning OCI cardholders?

• On March 4, 2021, the Ministry of Home Affairs issued updated rules for OCI cardholders through a gazette notification, which are still applicable. A key provision is that OCI cardholders must now obtain prior approval to visit "protected" areas within India, similar to the conditions imposed on other foreign nationals visiting regions like Jammu & Kashmir and Arunachal Pradesh.
• Additionally, OCI cardholders are now required to seek special permission to carry out research, or engage in missionary, Tablighi, or journalistic activities, as well as to enter any areas marked as restricted, protected, or prohibited.
• The notification also aligned OCI cardholders with foreign nationals for most economic, financial, and educational matters under the Foreign Exchange Management Act (FEMA), 2003. This marked a departure from earlier rules where OCIs were considered equivalent to Non-Resident Indians (NRIs) in such areas. However, prior RBI circulars under FEMA continue to be relevant.

Who is ineligible for OCI status, and what are the limitations?

• Individuals are not eligible for an OCI card if they—or their parents or grandparents—have ever held citizenship of Pakistan or Bangladesh. However, foreign spouses of Indian citizens or OCI holders can apply, provided their marriage is registered and has lasted at least two years.
• Members of foreign military forces, whether active or retired, are also barred from obtaining OCI status.
• OCI cardholders cannot vote, contest elections, or hold key constitutional roles such as President, Vice President, or judge of the Supreme Court or High Courts. They are also generally ineligible for government employment in India.

 Follow Up Question

1.Consider the following statements: (2018)

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

The ‘core’ of inflation, and RBI’s rate cutting decisions

For Preliminary Examination: Consumer Price Index (CPI), Wholesale Price Index (WPI), Inflation

For Mains Examination: GS III - Economy

Context:

Between February 8, 2023 and February 6, 2025, the Reserve Bank of India (RBI) kept its key short-term ‘repo’ lending rate for banks unchanged at 6.5%.

Read about:

Core Inflation

CFPI inflation

Key takeaways:

• Between February 2023 and January 2025, India's average annual inflation, as measured by the Consumer Price Index (CPI), stood at around 5.2%. Food inflation, tracked through the Consumer Food Price Index (CFPI), was significantly higher, averaging 7.6% during the same period.
• In contrast, the core inflation rate—which excludes food and fuel from the CPI calculation—was relatively subdued at 4.1%. Many experts viewed this lower core inflation as justification for the Reserve Bank of India's (RBI) Monetary Policy Committee to consider reducing interest rates.
• Food and fuel prices are primarily influenced by supply-side variables such as weather patterns affecting agriculture or geopolitical developments impacting global energy supplies.
• These factors tend to fluctuate unpredictably and are not easily addressed through monetary policy tools like interest rate adjustments, which are designed to influence overall demand in the economy. Thus, some argued that RBI should prioritize core inflation over the general inflation rate when shaping monetary policy.
• In response to these pressures, the RBI cut its repo rate twice—by 0.25 percentage points each in February and April 2025—bringing it down to 6%. Calls for these rate cuts began earlier, with Commerce and Industry Minister Piyush Goyal asserting in November 2024 that food inflation should not factor into interest rate decisions. The Finance Ministry’s Economic Survey for 2023-24 also highlighted delays in rate reductions, even as core inflation dropped to 3.1% by June 2024.
• However, recent months have seen a shift in trends. CFPI inflation dropped to 1.8% in April 2025—the lowest level since October 2021. This was below the general CPI rate of 3.2%, which itself was the lowest since July 2019.
• Meanwhile, core inflation rose to 4.2%, the highest since September 2023. In this scenario, if RBI were to base its policy decisions on core inflation, further rate cuts would appear less justified, especially since core inflation exceeds its medium-term target of 4%.
• India has faced two major food inflation episodes in recent years, both triggered by supply-side disruptions. The first was in early 2022 following Russia’s invasion of Ukraine, which sent global food prices soaring. The FAO's food price index hit a record 160.2 in March 2022.
• Though global food supply chains began to stabilize by early 2023, another disruption occurred due to the El Niño phenomenon between April 2023 and May 2024. El Niño, characterized by warming Pacific Ocean waters that alter global weather patterns, often results in deficient rainfall across India.
• This particular event led to weak monsoons, inadequate post-monsoon and winter rains, a shortened winter, and extreme heat from March to June 2024. These conditions reduced crop yields and pushed food prices higher throughout 2024.
• However, with the end of El Niño and the onset of La Niña—a climate pattern typically associated with cooler temperatures and more rainfall—India experienced a recovery in agricultural output. The kharif harvest began arriving in markets in late 2024, followed by a strong rabi crop, which helped ease food inflation from early 2025.
• Looking ahead, the India Meteorological Department has forecast above-normal rainfall for the upcoming southwest monsoon (June–September 2025), and no El Niño conditions are expected.
• Additionally, the FAO's global food price index was at 128.3 in April 2025, significantly below its 2022 peak. The USDA also anticipates record production levels for key crops like wheat, rice, corn, and oilseeds in 2025-26. These developments suggest that food inflation is likely to remain under control in the near future

Is carbon capture usage storage technology a real game-changer in climate action?

For Preliminary Examination: Current events of national and international significance

For Mains Examination: GS III - Environment & Ecology

Context:

As India remains committed to achieving net-zero emissions by 2070, nuclear energy alongside technologies like Carbon Capture Usage and Storage (CCUS) are emerging as key components of its strategy for decarbonisation and green transition.

Read about:

 Production Linked Incentive (PLI) schemes

Carbon Capture, Utilisation and Storage (CCUS)

 Key takeaways:

As part of its commitment to achieving net-zero carbon emissions by 2070, India is placing increasing emphasis on nuclear energy and technologies such as Carbon Capture, Utilisation and Storage (CCUS) as vital tools for its green transition and decarbonisation efforts.

Although CCUS was first conceptualised in the 1970s, it has gained significant traction in recent years as a viable climate mitigation strategy. According to data from the International Atomic Energy Agency, global CCUS installations currently have a total operational capacity of around 50 million tonnes annually. Some large-scale projects in countries like the United States, Brazil, and Australia each capture over 3 million tonnes of COâ‚‚ per year.

Understanding CCUS Technology

CCUS encompasses a suite of technologies aimed at capturing carbon dioxide emissions from large industrial sources such as thermal power stations, oil refineries, and the cement and steel sectors. Once captured, the COâ‚‚ is either stored underground or repurposed for industrial uses.

The primary aim of this approach is to prevent the release of COâ‚‚ into the atmosphere, thereby disrupting the carbon cycle that fuels global warming. CCUS operates through three major steps:

1. Carbon Capture

This initial phase focuses on isolating carbon from emission sources. The method chosen for capture depends on the composition of the gas stream. For example:

• Chemical solvents are used when COâ‚‚ levels are low, as in steel plants and refineries.

• Physical solvents are more effective for high COâ‚‚ concentrations, often found in coal gasification.

• Adsorption techniques are used in moderate-concentration cases, such as Steam Methane Reforming (SMR).

2. Carbon Utilisation

In this phase, captured COâ‚‚ is repurposed into products such as green urea, dry ice, fizzy beverages, construction materials, and chemicals. Among the capture methods, gasification is the most cost-effective due to its built-in carbon capture, while coal-based plants are more expensive due to low COâ‚‚ concentrations.

3. Carbon Storage

Finally, the captured COâ‚‚ is stored in geological formations like depleted oil and gas reservoirs or saline aquifers.

Global View and Criticism of CCUS

CCUS has been internationally acknowledged as a key solution to combat climate change, including recognition at COP28 in Dubai in 2023. However, its adoption has faced obstacles. In the UK, for instance, despite government support, real-world implementation has been limited. Projects in 2011 and 2015 were cancelled due to financial concerns. More recently, in 2024, the UK has geared up for its first two CCUS clusters, though debates continue over the feasibility of this approach.

CCUS in India's Climate Strategy

India, currently the third-largest emitter of COâ‚‚ globally, has been integrating CCUS into its decarbonisation plan since committing to net-zero by 2070 at COP26 in Glasgow (2021). A significant step came in 2022 when NITI Aayog, in collaboration with Dastur & Company Pvt. Ltd., released a detailed report on how CCUS could be rolled out in India.

Key areas identified for implementation include:

• Decarbonising key industries: CCUS could help cut emissions in coal, steel, cement, and refining industries, which are expected to expand significantly in the coming decade.

• Renewable fuel production: Captured COâ‚‚ can be converted into green hydrogen, methane, or ammonia—further enabling India’s shift toward clean energy alongside solar and wind.

Challenges Facing CCUS

Despite its potential, CCUS technology is not without obstacles:

• High costs and technological uncertainty: The science behind CCUS, particularly advanced forms like Direct Air Capture (DAC), is still evolving, with many systems yet to move beyond theoretical or lab-scale stages.

• Limited investor interest: Without robust government support, private investment in this niche area remains low.

The NITI Aayog report suggests a policy-driven push to accelerate CCUS adoption, recommending incentives such as:

• Tax and cash credits,

• Early-stage project financing,

• Public-private partnerships,

• Simplified access to inputs and infrastructure,

• Inclusion in the Production Linked Incentive (PLI) schemes.

Follow Up Question