INTEGRATED MAINS AND PRELIMS MENTORSHIP (IMPM) 2025 Daily KEY
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Indian iron and steel exporters face the highest CBAM levy
For Preliminary Examination: Current events of national and international Significance
For Mains Examination: GS III - Environment and Ecology
Context:
Indian exporters of iron and steel to EU may have to pay about €301 million (approximately ₹3,000 crore) in Carbon Border Adjustment Mechanism (CBAM) fees, the highest among all countries exporting similar products to the EU, an analysis by European non-profit think-tank Sandberg has found
Read about:
Carbon Border Adjustment Mechanism (CBAM)
Greenhouse gas (GHG) emissions
Key takeaways
- The Carbon Border Adjustment Mechanism (CBAM) is a policy tool introduced by the European Union (EU) to address the issue of “carbon leakage” — a situation where industries shift production to countries with weaker climate regulations to avoid the costs of reducing greenhouse gas emissions.
- Essentially, CBAM ensures that imported goods into the EU face a carbon price equivalent to what EU producers pay under the EU’s Emissions Trading System (ETS).
- Under the EU’s climate policies, industries within the region are required to purchase carbon credits for every tonne of carbon dioxide they emit. This system creates a financial incentive to adopt cleaner technologies and reduce emissions.
- However, if foreign producers exporting to the EU are not subject to similar carbon pricing in their home countries, they gain a cost advantage. The CBAM aims to neutralize this imbalance by imposing a carbon tariff on such imports.
- The mechanism initially covers carbon-intensive sectors such as iron and steel, cement, aluminum, fertilizers, electricity, and hydrogen—areas that are both energy-intensive and highly traded globally. Importers in the EU will need to report the embedded emissions of their products and purchase corresponding CBAM certificates to cover these emissions. The price of these certificates will mirror the price of carbon within the EU’s ETS.
- For developing countries, including India, CBAM raises significant concerns. It could act as a trade barrier by making exports to the EU more expensive if domestic producers cannot demonstrate low carbon footprints. This may also pressure developing economies to adopt stricter climate measures and carbon accounting mechanisms to maintain export competitiveness.
- In essence, the CBAM represents a major step in linking global trade with climate policy. While it supports the EU’s goal of achieving net-zero emissions by 2050, it also introduces new dynamics in international trade, prompting debates on climate justice, fairness, and the responsibilities of developed versus developing nations in combating global warming
Additional Information
- According to a recent analysis by the European think tank Sandberg, Indian exporters of iron and steel to the European Union (EU) may incur approximately €301 million (about ₹3,000 crore) in charges under the Carbon Border Adjustment Mechanism (CBAM)—the highest liability among all nations exporting similar products to the bloc.
- The CBAM functions as a carbon levy imposed on European importers who purchase goods from countries where production generates higher carbon emissions per tonne than comparable goods produced within the EU.
- Sandberg’s newly released online calculator estimates that Russia will face the second-highest CBAM costs at €240 million, followed by Ukraine (€198 million) and China (€194 million).
- The study further reveals that when India’s exports of aluminium and cement are included alongside iron and steel, its total CBAM liability amounts to around €330 million, equivalent to roughly 1.05% of the value of all traded goods.
- However, it also highlights a potential opportunity — Indian industries could increase revenues by about €510 million if they adopt cleaner and more energy-efficient technologies, thereby offsetting nearly €180 million in net costs.
- India has, however, consistently voiced opposition to the CBAM, with several industry associations labelling it a form of “non-tariff barrier” that could adversely affect the competitiveness of Indian exports in European markets
Follow Up Question
Mains
1.“The European Union’s Carbon Border Adjustment Mechanism (CBAM) represents a new intersection between climate policy and international trade.”
Critically examine the implications of CBAM for India’s exports and its alignment with the principles of climate justice and the WTO framework. Suggest measures India can adopt to mitigate its economic and environmental impact.
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Note: This is just a model answer and a Model Structure model
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1.Which of the following adopted a law on data protection and privacy for its citizens known as ‘General Data Protection Regulation’ in April, 2016 and started implementation of it from 25th May, 2018? (UPSC CSE 2019)
(a) Australia
(b) Canada
(c) The European Union
(d) The United States of America
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Answer (c)
The General Data Protection Regulation (GDPR) is a comprehensive data protection law adopted by the European Union (EU) in April 2016, and it came into effect on 25th May 2018. It establishes strict rules on how personal data of EU citizens can be collected, processed, stored, and transferred — both within the EU and by entities outside it that handle EU residents’ data. The GDPR gives individuals greater control over their personal information through rights such as:
It also mandates organizations to obtain explicit consent for data processing and to report data breaches promptly. The regulation has become a global benchmark for privacy and data protection laws, influencing similar frameworks in several countries, including India’s Digital Personal Data Protection Act, 2023 |
Microplastics pollution threatens Goa’s estuarine fisheries, human consumers
For Preliminary Examination: Current events of national and international Significance like Plastic Pollution
For Mains Examination: GS III - Environment and Ecology
Context:
Researchers identified 4,871 polluting particles, of which 3,369 particles were plastic polymers of 19 types. Researchers found more contamination on the sea floor than in open water. Particles were mainly from fishing material and wastewater
Read about:
Single Plastic Use
Microplastic Pollution
Key takeaways:
- Microplastics present in aquatic environments can be consumed by microscopic organisms, which are then eaten by progressively larger species. This causes microplastics to build up in the bodies of animals higher in the food chain, increasing their overall exposure and toxic effects — a process known as bioaccumulation.
- To investigate how microplastics accumulate along the Goan coastline, researchers from the CSIR–National Institute of Oceanography (Goa) and the Academy of Scientific and Innovative Research (Ghaziabad) examined the feeding habits and habitats of 251 fish belonging to nine species of finfish and shellfish.
- Their samples included economically important species such as mackerel, anchovy, oyster, clam, catfish, and sardine, collected from varying ocean depths.
- Their findings, published in Environmental Research (August edition), identified 4,871 foreign particles within the sampled fish, out of which 3,369 were confirmed as plastic polymers representing 19 distinct types.
- The researchers observed higher concentrations of these particles on the sea floor and bottom sediments (benthic region) compared to the open-water (pelagic zone).
- Most of the detected plastics originated from discarded fishing gear and wastewater runoff from human settlements.
- According to the study, affected fish showed signs of genetic disruption, oxidative stress, reproductive impairment, and stunted growth. Humans consuming such fish could also face immune system disturbances, increased cancer risk, and neurological toxicity.
- Fishing activities around Goa are mainly concentrated in estuaries, which are ecologically vital zones supporting young fish and providing feeding areas for mature ones. These estuaries are rich in finfish and shellfish, species that are popular in Indian diets for being nutritious, affordable, and easily available.
- Small pelagic species such as anchovies, sardines, and mackerel are central to estuarine food chains. They feed on plankton and attract larger predators. As filter feeders, they trap particles from surrounding water, making them especially prone to microplastic ingestion.
- These smaller fish are preyed upon by larger species, including elasmobranchs like sharks, which dwell in coastal shelf waters. Through this trophic transfer, microplastics gradually travel up the food web, ultimately reaching apex predators and humans.
- The study focused on fish from the Mandovi estuarine system, part of the Mandovi–Zuari network, which accounts for nearly 97% of Goa’s total fish production. Researchers used the bamboo shark, an apex predator, to examine the long-term impacts of microplastic accumulation.
This work addressed five key research gaps:
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Levels of microplastic contamination in commercially important fish;
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Factors influencing microplastic uptake;
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The main body parts through which ingestion occurs;
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Evidence of ingestion in the bamboo shark; and
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The health implications for both marine life and human consumers along Goa’s coast.
- To explore these questions, scientists analyzed 30 specimens each of mackerel, sardine, anchovy, bamboo shark, sole fish, catfish, clam, and oyster, and 11 green mussels. They grouped the species according to feeding behavior — filter feeders, planktivores, secondary consumers, and carnivores — and measured microplastic levels in their soft tissues.
- Results showed that anchovies had the highest concentration among pelagic species, with 8.8 microplastic particles per fish, while catfish led the benthic group with over 10 particles per fish. The bamboo shark contained the least, at 3.5 particles per fish, while seawater samples recorded 120 microplastic particles per litre.
- Interestingly, smaller fish tended to accumulate more microplastics, and those living closer to contaminated sediments ingested higher quantities.
- Among finfish, more microplastics were detected in the digestive tract than in the gills, suggesting ingestion through food and water. As water passes through gills, particles may also become trapped, causing potential respiratory stress.
- The study identified four main shapes of microplastics — fibres (53%), fragments (29.9%), films (13.1%), and beads (4%) — appearing in nine colors, most commonly blue (37.6%), black (24.3%), and red (12%). The colors and forms helped trace their origins to fishing nets, tyre residue, electronic waste, packaging materials, and textiles.
- In terms of environmental impact, the research categorized Goa’s marine region as low-risk overall, but found that benthic species are more vulnerable than pelagic ones. Out of the 19 polymer types, 11 were identified as highly toxic.
- Furthermore, 66 of the 71 shellfish species studied displayed poor nutritional quality, echoing previous research that links microplastic contamination to reduced protein, fatty acid content, and overall fitness in fish.
Follow Up Question
Mains
1.Microplastic contamination in marine ecosystems poses a serious threat not only to aquatic biodiversity but also to human health and coastal livelihoods. Discuss the findings and implications of recent studies on microplastic bioaccumulation along the Goan coast in this context. Suggest measures to mitigate microplastic pollution in India’s coastal waters
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Note: This is Model not a Model Answer Instructions this is only a reference
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Prelims
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Answer (D)
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Restoring fiscal space for the States
For Preliminary Examination: Current events of national and international Significance
For Mains Examination: GS III - Economy
Context:
The journey of Goods and Services Tax (GST) implementation has entered a major new stage with the latest restructuring of tax slabs, a move expected to pass on over ₹2 lakh crore in tax benefits to consumers. With this, the GST compensation cess stands abolished as it merges with the regular tax, marking the end of an era of compensation under GST
Read about:
Goods and Services Tax (GST)
Finance Commission (FC)
Key takeaways:
- The implementation of the Goods and Services Tax (GST) in India has entered a significant new phase with the recent overhaul of its tax slabs — a reform expected to deliver tax benefits worth over ₹2 lakh crore to consumers.
- This restructuring also marks the discontinuation of the GST compensation cess, which is now integrated into the standard tax system, effectively ending the compensation regime.
- The move is anticipated to stimulate domestic demand and, through higher consumption, offset potential revenue losses.
- However, several States have expressed dissatisfaction, arguing that the Centre has not accurately estimated the magnitude of the loss, which they fear could be substantially greater than projected. Their demand for continued compensation has, therefore, gone unaddressed.
- While earlier studies indicate that GST implementation benefited most States through generous compensation provisions, the post-compensation phase is likely to trigger fiscal concerns. The Centre’s ability to impose cesses and surcharges gives it a degree of fiscal control over States.
- Moreover, since the advent of GST has transferred a substantial portion of taxation authority from States to the GST Council—where the Centre holds a decisive role—there is growing advocacy for revisiting fiscal federalism to reinforce the principle of cooperative federalism.
- India’s fiscal policy, particularly concerning the sharing of revenue between the Union and the States, continues to evolve. Article 246 of the Constitution delineates taxation powers between the Union and the States through the Union and State Lists, with residuary powers vested in the Centre.
- Utilizing these powers, Parliament enacted the 92nd and subsequently the 101st Constitutional Amendments, introducing Service Tax and later, in July 2017, implementing GST.
- For the first time, GST established a destination-based tax structure, enabling both the Centre and the States to share a unified tax base. However, this shift has led to reduced fiscal autonomy for States, as decision-making now lies largely within the GST Council, where the Centre’s influence is dominant.
- Given India’s multi-level system of governance, fiscal asymmetry naturally arises between resource allocation and expenditure responsibilities. Typically, revenue-raising powers are centralized to ensure efficiency, while spending responsibilities are decentralized for better accountability and service delivery.
- To balance these disparities, mechanisms for fiscal transfers and redistribution are employed—requiring continuous adaptation in response to evolving fiscal realities.
- The constitutional framework governing Centre–State financial relations is outlined in Articles 268 to 293. The Finance Commission (FC), constituted under Article 280, is tasked with determining the distribution of resources among States.
- Nonetheless, certain States have voiced concerns that the FC’s criteria for tax devolution tend to disadvantage more progressive States. They also point to inconsistencies in the parameters and weightages adopted across successive Commissions.
- In addition to Finance Commission transfers, States receive funds through Centrally Sponsored Schemes (CSS), Central Sector Schemes, and previously through Planning Commission grants—discontinued after the Commission’s dissolution in 2014.
- While Article 275 provides for statutory grants recommended by the Finance Commission, Article 282 empowers the Union to make discretionary grants. However, some States allege that these financial flows lack fairness and transparency
Follow Up Question
Mains
1.“The post-compensation phase of the Goods and Services Tax (GST) has reignited debates on fiscal federalism in India.”
Discuss the implications of the GST restructuring and the abolition of the compensation cess on Centre-State financial relations. How can the principle of cooperative federalism be strengthened in the evolving fiscal landscape?
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Note: This is just a model answer and a Model Structure model
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Answer (D)
The Finance Commission of India is a constitutional body established under Article 280 of the Indian Constitution. Its primary function is to recommend how the net proceeds of taxes should be distributed between the Union and the States, and among the States themselves. Its key responsibilities include:
Now, analyzing each option:
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For Preliminary Examination: Current events of national and international Significance like India–Middle East–Europe Economic Corridor (IMEC)
For Mains Examination: GS II - International relations and Organisations
Context:
The recent trade friction with the U.S. has prompted India to intensify its efforts to further diversify its economic interactions with various countries worldwide. While India has signed an agreement with the U.K., it is also negotiating a similar agreement with the EU. In addition to such compacts, India should also proactively develop frameworks such as the India–Middle East–Europe Economic Corridor (IMEC).
Read about:
India–Middle East–Europe Economic Corridor (IMEC)
India, Israel, UAE, and U.S. (I2U2)
Key takeaways:
- The recent trade tensions between India and the United States have pushed New Delhi to expand and diversify its global economic engagements. Alongside the ongoing trade pact with the United Kingdom, India is in advanced negotiations with the European Union for a similar agreement.
- Beyond bilateral trade compacts, India must also focus on developing large-scale connectivity projects such as the India–Middle East–Europe Economic Corridor (IMEC).
- The IMEC envisions enhanced maritime connectivity between India and the Arabian Peninsula, along with the establishment of a high-speed rail network linking UAE ports to Israel’s Haifa port through Saudi Arabia and Jordan.
- From there, goods can be seamlessly transported to and from European markets. The corridor also aims to integrate modern infrastructure components — including a clean hydrogen pipeline, electricity cable, and an undersea digital data link — while strengthening existing port systems.
Historical Background
- In 2023, geopolitical conditions were conducive to realizing the IMEC project. The Abraham Accords had raised hopes for lasting peace in West Asia, as Israel and Arab states worked toward stability and cooperation. Proposals emerged to connect Haifa port with Jordan’s railway system and extend it toward Gulf ports to foster regional connectivity.
- At the same time, India’s partnerships with key Arab states — notably the UAE and Saudi Arabia — grew stronger, while its relations with the United States also improved.
- These converging interests paved the way for the I2U2 grouping (India, Israel, UAE, and the U.S.) and set the stage for the IMEC’s formal announcement during the G20 Summit in New Delhi, with endorsement from several EU nations, including France, Germany, and Italy.
- However, the security scenario in West Asia deteriorated soon after. The October 7 Hamas attacks and Israel’s subsequent military response severely strained Israel’s relations with neighbouring countries, casting doubt on the near-term viability of the IMEC project.
Mediterranean Concerns
- Meanwhile, climate change has opened new maritime routes through the Arctic, offering shorter and cheaper transport options that primarily benefit the U.S., Russia, China, and Northern European countries. This development could shift trade patterns toward Arctic port cities.
- Among IMEC’s European partners, France, which enjoys access to both the Atlantic and Mediterranean, is relatively better placed, whereas Italy — with only Mediterranean access — fears losing out economically.
- For this reason, Italy and other Mediterranean nations view IMEC as crucial for maintaining their relevance in global maritime trade. They argue that sustaining competitiveness demands innovative thinking, new alliances, and deeper engagement with emerging economies like India.
- With its robust and fast-growing $4 trillion economy, India is viewed as an attractive and reliable partner for Mediterranean economies seeking to revitalize trade.
- While it is unclear whether Arctic routes will benefit India directly in terms of transport cost reductions, the Mediterranean remains a vital access point for Indian exports to Europe.
- Europe, with its advanced technology, high per capita income, and educational standards, will continue to be a key trade destination for India. The EU is already India’s largest trading partner, accounting for over $136 billion in trade.
- To strengthen this partnership, both sides must invest in better logistics and connectivity frameworks that ensure resilient and diversified supply chains.
The Importance of IMEC
- Recent geopolitical disruptions have underscored the fragility of global sea lanes. The Houthi attacks in the Red Sea have forced ships to reroute around Africa’s Cape of Good Hope, increasing shipping costs and transit times.
- With the future of the Gaza peace process still uncertain, finding alternative trade routes becomes even more critical for India, West Asia, and Europe.
- As a multi-nation framework, the IMEC offers the flexibility to innovate and adapt to shifting political and security conditions.
- India and Arab countries can leverage this to deepen cooperation and include additional trade hubs — such as ports in Saudi Arabia and Egypt — to expand the corridor’s reach. Strengthening India–Arab economic ties would also counterbalance Pakistan’s attempts to build strategic partnerships in the region.
- While the IMEC faces serious security challenges, its economic promise remains significant. India and Europe should serve as the twin anchors of this initiative, pooling their strengths to foster shared prosperity and stability across the IMEC corridor
Follow Up Question
Mains
1.The India–Middle East–Europe Economic Corridor (IMEC) represents both a strategic and economic opportunity for India amid shifting global trade routes and geopolitical uncertainties. Discuss the significance of IMEC for India’s foreign policy and trade diversification. Also, examine the challenges that may impede its implementation in the current geopolitical context.
(Answer in 250 words)
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This Answer or instructions are only for reference
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1. It is an initiative endorsed by the G20 together with the Paris Club.
2. It is an initiative to support Low Income Countries with unsustainable debt.
Which of the statements given above is/are correct?
(a) 1 only
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Answer (c)
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