08.September.2025

• The Russia–Ukraine war began with a full-scale invasion on 24 February 2022, rooted in Russia’s strategic concerns over NATO expansion, historical ties, and control over Black Sea access.
•  Drone warfare has become a defining feature of this conflict, with both sides pioneering low-cost, high- frequency aerial assaults that have reshaped modern combat.

The Attack – Scale & Impact

• On 7 September 2025, Russia executed its most extensive air campaign since 2022, deploying over 800 drones and decoys (around 810 reported) and 13 missiles.
•  Ukrainian defenses shot down the vast majority—747 drones and 4 missiles—but the attack still caused significant harm .
•   The Cabinet of Ministers building in Kyiv, housing key governmental functions, was hit for the first time in the war—signaling operational escalation .

Humanitarian & Psychological Dimensions

• First casualties include vulnerable civilians, heightening humanitarian concern (mother and infant killed).
•   Damage to residential areas in Kyiv’s Sviatoshynskyi and Darnytskyi districts added trauma and psychological pressure to urban populations.

Strategic Tactics & Military Evolution

• Russia increasingly relies on quantity over quality— flooding Ukrainian defences with Shahed/decoy drones, designed to overwhelm interceptors and deplete Ukraine’s air-defense stockpile.

• Services like AI-enabled autonomous drones, thermobaric payloads, and decoys suggest evolving Russian drone sophistication.
•  By contrast, Ukraine has been innovating with its own drone systems—such as Operation SpiderCs Web (deep- penetration strikes using 117 drones into Russian territory) and domestic long-range drone production to target Russian infrastructure.

Geopolitical and Diplomatic Fallout

•   Ukraine’s appeal: President Zelenskyy called for stronger
• U.S. and EU air-defense support, political pressure, and harsher sanctions .
•  France’s Macron condemned “indiscriminate strikes” and pledged new defense measures with Ukraine .
•   UK’s PM Starmer denounced the attacks as “cowardly” and reaffirmed support for Ukraine’s sovereignty .

REFUGEEE INFLUX

• Refugee influx began in July 1983, following ethnic conflict and civil war in Sri Lanka.
•  According to MHA’s 2023–24 annual report: 3,04,269 Sri Lankan refugees entered India between July 1983 and August 2012.
•  They were housed mainly in Tamil Nadu and parts of Puducherry.

Legal & Policy Framework

• Immigration and Foreigners Act, 2025 (new law):
• Repealed four older laws including Passport Act and Foreigners Act.
• Immigration and Foreigners (Exemption) Order, 2025 (notified Sept 2, 2025):
• Exempts registered Sri Lankan Tamil nationals who entered India before Jan 9, 2015 from requirement of passport/visa.
• Protects them from penal provisions, deportation, and being termed “illegal migrants.”

Long-Term Visa (LTV) & Citizenship Issues:

• Sri Lankan Tamils are ineligible for LTVs → hence cannot progress towards citizenship.
•  Other minorities from Afghanistan, Pakistan, Bangladesh (six communities) can apply for LTVs and subsequently citizenship after 11 years of residence.
•  Citizenship governed by Citizenship Act, 1955 → provides for acquisition by registration/naturalisation.

1986 MHA Directive (still operational):

• Explicit instruction to not entertain applications for citizenship from Sri Lankan Tamil refugees arriving July 1983 onwards.

Significance of Sept 2025 Notification

•   Removes the “illegal migrant” label for pre-2015 arrivals.
•  Grants security from forced expulsion/deportation.
•  Provides humanitarian relief, but does not pave path for citizenship.

ECOLOGY DISASTER IN THE NICOBAR

• Project cost: ₹72,000 crore mega-infrastructure project in Great Nicobar Island.
•  Components: Transshipment port, airport, township, and power plant.
•  Strategic angle: Positioned at the Malacca Strait, a global chokepoint for maritime trade.
•  Ecological & social concerns: Threat to indigenous tribes (Nicobarese & Shompen), unique biodiversity, and seismic vulnerability.

Tribal & Social Concerns

• Indigenous communities:
• Nicobarese tribe: Already displaced in 2004 tsunami; project prevents return to ancestral villages.

• Shompen tribe (PVTG): Faces existential threat —loss of habitat, cultural integrity, and livelihoods.

• Violation of Shompen Policy (MoTA): Mandates prioritisation of tribal welfare and integrity in large- scale projects.

Undermining institutions:

• Article 338-A → NCST not consulted.
•  Tribal Council objections ignored; Letter of No Objection obtained under pressure and later revoked.

Legal and Regulatory Safeguards Bypassed

•  Forest Rights Act (2006): Shompen not consulted despite being custodians of forest resources.
• RFCTLARR Act (2013): Social Impact Assessment failed to recognise Shompen & Nicobarese as stakeholders.
• Coastal Regulation Zone (CRZ 1A): Port construction prohibited, but classification manipulated by a High- Powered Committee.

• National Green Tribunal (NGT) concerns ignored.

Environmental Concerns

• Deforestation:
• MoEFCC estimate: 8.5 lakh trees

• Independent estimate: 32–58 lakh trees.

• Compensatory afforestation paradox: Planned in Haryana (ecologically incompatible), and land auctioned for mining.

Unique biodiversity under threat:

• Nicobar long-tailed macaque (endemic primate).  
• Dugongs (sea cows) and turtle nesting sites.
•   Coral reefs and rainforest ecosystems.

Flawed Environmental Assessments:

• Turtle nesting surveyed off-season.
•  Drones used for dugongs (ineffective in deep waters).
•  Reports prepared under duress.

Geological/Disaster Vulnerability

• Seismic zone: Highly earthquake-prone.
•   2004 Tsunami: Land subsidence of 15 feet.
•  2025 Andaman earthquake (6.2 magnitude): Recent reminder of risks.
•  Project jeopardises: lives, infrastructure, investment security.

Ethical & Governance Dimensions

•  Violation of due process & consultation.  Mockery of constitutional safeguards.
•   Environmental justice vs. economic growth.
•  Ethical responsibility to protect PVTGs (vulnerable to extinction).
•  Intergenerational equity: Long-term ecological cost vs. short-term economic gain.

INDIA’S FDI STORY

• Post-1991 reforms: FDI became a pillar of industrial modernisation, technology transfer, and global market integration.
•  Key sectors: E-commerce, IT, software, and hardware witnessed profound structural changes due to FDI inflows.

Current Trends

• Gross inflows: $81 bn in FY 2024-25 (↑ 13.7% from previous year).
•   Divergence in flows: Between FY 2021-22 and FY 2024- 25, gross inflows recovered marginally but net inflows collapsed due to sharp rise in repatriations and disinvestments.
•  Disinvestments: Rose 51% in FY 2023-24 to $44.4 bn; further to $51.4 bn in FY 2024-25, forming over 63% of total outflows.
•  Sectoral shift: Manufacturing share dropped to ~12%; services, finance, hospitality dominate.

Key Issues

• Short-termism: Inflows increasingly driven by tax arbitrage and treaty-based routing (via Singapore, Mauritius).
• Decline in quality FDI: Capital not staying long enough to contribute to technology, jobs, or industrial base.
•   FDI Outflows: Indian outward FDI rose from $13 bn (FY 2011-12) to $29.2 bn (FY 2024-25). Reasons: regulatory inefficiency, policy unpredictability, infrastructure bottlenecks.
• Confidence erosion: Traditional long-term partners (US, Germany, UK) reducing role.
•  Macroeconomic vulnerability: Declining net inflows weaken BoP, reduce RBI’s monetary flexibility, and impact currency stability.

Systemic Challenges

• Regulatory opacity and inconsistent governance.
•  Legal unpredictability discourages sustained commitments.
•   Weak institutional trust → parity in behaviour: foreign investors withdrawing, Indian firms investing abroad.

Policy Imperatives

• Shift focus from quantity to quality: Prioritise long-term, committed investments aligned with developmental goals.

 Structural reforms:

•  Simplify regulations, ensure policy stability, reduce litigation risks.
•  Upgrade infrastructure and logistics.
• Enhance human capital: skill-building, R&D push.
•  Strategic targeting: Encourage FDI in manufacturing, clean energy, advanced tech, rather than rent-seeking sectors.
•  Macroeconomic resilience: Balance short-term inflows with strategies for retention and reinvestment..”

ROLLS AND LOOPHOLES

• Large-scale deletions in electoral rolls noted.
•  Some deletions inconsistent with demographic patterns/statistical expectations.
•  Opposition alleged widespread irregularities, but no proven evidence of partisan manipulation yet.

Aland Constituency, Karnataka (2023)

• Officials discovered thousands of fraudulent Form-7 applications (used to request deletion of voters).
•  Around 6,000 legitimate voters targeted for deletion in a constituency with narrow victory margins (<700 votes earlier).
•  Fraud exposed due to vigilance of local political leaders, not the Election Commission of India (ECI).

Systemic Weaknesses

•   ECI declined access to technical records (dynamic IPs, disposable phone numbers), stalling independent probe.
•  Delay in Bihar: ECI released voter deletion details only after Supreme Court intervention.
• Indicates reactive rather than proactive stance of the ECI.

Trust Deficit in Electoral Processes

• Absence of independent verification mechanisms fuels suspicion of bias.
•  Judicial intervention becoming central to ensuring transparency.
• Risks shifting authority from ECI to courts.

Broader Implications

• Close contests in many constituencies → even small voter deletions can alter outcomes.
•   Perception of bias weakens institutional credibility of ECI.
•  Repeated lapses can convert administrative/technical failures into systemic distrust.

Way Forward (Reforms Needed)

• Transparency: Publish deletion lists with reasons in a verifiable format.
• Checks on Form-7 misuse: Stronger safeguards to prevent mass deletions via fraudulent applications.
•  Independent audit mechanisms for electoral rolls to validate ECI claims.
•   Proactive ECI intervention to investigate fraud, not wait for judicial orders.
• Strengthen cyber/tech monitoring to trace misuse of dynamic IPs and disposable numbers.

GST 2.0 WILL EMPOWER YOUNG INDIAN

• India’s greatest strength lies in its demographic dividend – ~65% of population under 35 years.
• Consumption is the biggest driver of GDP (60% of India’s GDP).
•   GST 2.0 aims to align tax reform with youthful aspirations, affordability, and entrepreneurial energy.

Key Features of GST 2.0

• Simplified rate structure – reducing burden on essentials.
•   Exemption for health & life insurance premiums →boosts insurance penetration.
•   Relief for households – savings on EMIs, healthcare, and education.
• MSME-friendly – easier compliance, reduced friction, greater access to credit.
•   Two-tier GST structure → predictable, stable, and transparent tax regime.

Benefits to Households

• More disposable income → multiplier effect on economy.
•  Encourages financial planning & protection culture (insurance, savings).
•  Makes long-term goals (housing, education, health security) more achievable.

Insurance & Social Security

• Historically, low insurance penetration due to high costs.
•   GST exemption → shifts insurance from “optional” to national priority.
• Enhances household resilience against medical & financial shocks.
• Promotes a risk-sharing society instead of burden on individuals.

Impact on MSMEs & Youth Entrepreneurship

• MSMEs: 110+ million employed, key to GDP contribution.
•   GST 2.0 simplifies compliance → encourages formalisation.
•  Benefits: better credit access, supply chain integration, entrepreneurial confidence.

Economic Multiplier & Virtuous Cycle

• Affordability ↑ → Demand ↑ → Investment

↑ → Employment ↑ → Further

Consumption.

•  GST 2.0 nurtures this self-sustaining growth cycle.

Governance & Predictability

• Stable, transparent taxation → builds trust in governance.
•  Reduces compliance uncertainty for households & businesses.
•  Encourages long-term financial planning & investment decisions.

Strategic & Long-Term Significance

• Prevents demographic dividend from becoming a liability.
• Supports inclusive, consumption-led, sustainable growth.
•  Provides fiscal architecture for a mature, consumption-driven economy.
•  Builds a foundation for youth empowerment, financial security & entrepreneurial growth.

INDIAN  GENERICS AS GLOBAL PUBLIC GOOD

• India supplies 47% of generics consumed in the U.S.
• U.S. is India’s largest export market (31.35% share).  Indian generics account for over 90% of U.S. prescriptions for major diseases (diabetes, cancer, anxiety, depression).
•  Saved U.S. healthcare system $219 bn in 2022 and $1.3 trillion (2013–2022).
•  Global generic drug market projected at $614 bn by 2030 with India expected to hold 5% share.

U.S. Concerns in Negotiations

• High domestic drug prices in U.S. market.
•  Push for stricter Intellectual Property (IPR) norms, including:
•  Extension of patent exclusivity beyond 20 years.  Higher test-data protection obligations.
•   Longer data exclusivity periods (via FTAs).
•   Trump’s “Most Favoured Nation” (MFN) rule on drug pricing to curb imports.
•  Proposed tariffs: 26% levy + 25% penalty on Indian pharma exports.

India’s Concessions & Strategy

• Proposal to reduce import tariffs on U.S. pharma imports from 10% → 0% (via IPA).
• Exploring increased U.S. manufacturing investment by Indian firms to counter “domestic manufacturing” push.
• Advocating joint ventures (JV) with U.S., EU, and Global South in pharma.
• Leveraging TRIPS flexibilities (esp. Compulsory Licensing).
• Linking drug price reduction offers to technology transfer + R&D collaboration.

Broader Trade & Health Diplomacy Issues

• Need to move away from transactional approach → adopt strategic positioning.
•   Indian pharma should be projected as a global public good.
•  Push for comprehensive TRIPS review to safeguard public health interests.
•  Leverage India–US TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative for biotech & health-tech collaboration.
•  Emphasize Voluntary Licensing (VLs) + tech transfer in bilateral trade.

Diversification Beyond U.S.

•  Growing opportunities in West Asia, Central Asia, Africa, South America, Russia, China, ASEAN.
•   Position India as a pharmaceutical hub for Global South.
• Promote social-impact overseas investments in healthcare.

Strategic Concerns

• U.S. attempts to weaponize tariffs & extend Big Pharma monopolies → risk to affordable medicine access worldwide.
• India must resist unreasonable IPR demands.
•  Build alliances with developing countries to push back against U.S.-driven exclusivity norms.

• The U.S. imposed an additional 50% duty (effective 27 Aug 2025) on Indian exports, over the existing 2.5% baseline.
•   Legal basis: Section 232 of U.S. Trade Expansion Act, 1962 (allows tariff hikes on national security grounds).
•  Exemptions: pharmaceuticals, semiconductors, electronics, petroleum products, select auto parts.

• Impact on India

• Most affected sectors: garments, leather goods, gems & jewellery → import duties >60%.
• U.S. accounts for a large share of Indian apparel exports, competing with Vietnam & Bangladesh.
•  Short-term effect: temporary pre-tariff export boom → advance orders now drying up.
•   MSMEs at highest risk as they cannot relocate production.
•  India’s services exports to U.S. > goods exports; services are not yet under tariff threat.

• Impact on U.S.

• Tariffs are self-defeating:

• Revenue gains projected at $2.1 trillion (10 years) vs $4.5 trillion tax-cut deficit gap.
•  Rising budget deficit → higher treasury yields, debt, inflationary pressures.
• Industries hit: Ford ($800 mn loss), GM ($1 bn loss) due to higher input tariffs.
• Consumers hit: food inflation (eggs, chicken, meat) due to restricted imports.
• Labour shortages from immigration restrictions; firms turning to AI-driven productivity.
• Global supply chains adjusting → “tariff shopping” & relocation to low-tariff jurisdictions.

Political & Ideological Drivers

• Trump’s tariffs are politically motivated, rooted in:
•  Protectionist ideology (references to McKinley-era tariff walls).
•  Influence of advisors like Peter Navarro & Jamieson Greer (anti-WTO, anti- globalisation stance).
•  Punishment for India’s oil trade with Russia (viewed as strategic defiance).
•  Part of personal vanity & political theatre (e.g., Nobel Peace Prize aspirations, Ukraine war frustration).
•  Not purely economic → deeply geopolitical (message to China & Russia, India as collateral).

India’s Policy Response

Short-term:

•  Cushion MSMEs via tax relief & lowering GST on vulnerable products.
•  Avoid knee-jerk retaliation in services trade (as U.S. imports large volume of IT, BPO).
• Long-term:
• Diversify exports → EU, UK, ASEAN, Africa, even China.
•  Negotiate sector-specific protections in trade deals with U.S.
• Avoid hasty entry into RCEP; strengthen India’s bargaining power.

Diplomatic approach:

• Manage Trump’s ego with symbolic gestures, especially if he seeks to mediate Ukraine peace.

• Balance political optics with strategic patience.

  Broader Lessons

• U.S. tariffs reflect economic nationalism → India must prepare for policy unpredictability.

• Tariffs highlight contradictions in U.S. domestic economy→ hurt its own consumers more than India.

• For India, the strategy should be diversification + careful hedging, not panic retaliation.