Topic 1: India-US Interim Trade Deal — Sovereignty & Energy Security
Syllabus
- GS Paper II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
- GS Paper III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Context
On February 11, 2026, the Leader of Opposition (LoP) in the Lok Sabha alleged that the recently signed India-US Interim Trade Deal constitutes a “wholesale surrender” of India’s energy and digital sovereignty. The deal includes a commitment to purchase $500 billion of US products over five years and a phase-out of Russian oil imports.
Main Body: Multi-Dimensional Analysis
- The Energy Pivot: The most contentious clause involves India’s commitment to drastically reduce its reliance on Russian Urals and transition toward US West Texas Intermediate (WTI) crude and LNG. While proponents argue this insulates India from Western sanctions, critics claim it tethers India’s energy security to Washington’s geopolitical whims.
- Digital Services & “Google Tax”: Under the deal, India has agreed to remove its Equalization Levy (often called the ‘Google Tax’) on US tech giants and committed to “negotiate digital trade rules” that prohibit customs duties on electronic transmissions. This has raised fears that India may lose the policy space to tax the growing digital economy.
- Market Access for Farmers: The deal grants the US greater access to India’s dairy and poultry markets. The opposition argues this will hurt the domestic Amul model and small poultry farmers, whereas the government maintains that the deal opens the US market for Indian specialized textiles and “Vikas” (traditional) medicines.
- Strategic vs. Economic Gains: The White House describes this as a “landmark bilateral agreement” designed to counter Chinese economic dominance in the Indo-Pacific. For India, the deal is a bid to become the preferred alternative to China in the global supply chain, but the “price of entry” is being debated as too high.
- The “Trump” Factor: With the US administration pushing a “Buy American” agenda, India’s commitment to purchase $500 billion in goods (including defense equipment and civil aircraft) is seen as a way to avoid punitive tariffs on Indian IT exports.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Supply Chain De-risking: Shifts India closer to the US-led “Friend-shoring” network. | Energy Inflation: US oil and LNG are historically more expensive than discounted Russian crude. | Make in India: Could be challenged if US imports flood the domestic market. |
| Tariff Predictability: Prevents sudden Section 231 tariffs on Indian steel and aluminum. | Fiscal Loss: Removal of the Digital Services Tax leads to a direct loss in tax revenue. | ODOP (One District One Product): Targeted for export under the new FTA access. |
| Defense Tech Transfer: Likely to speed up the GE-F414 engine co-production in India. | Sovereign Policy Space: Limits India’s future ability to regulate “Electronic Transmissions.” | PM-KUSUM: Becomes vital to insulate farmers from rising fuel costs. |
Examples
- Aviation: Air India and Indigo’s massive orders for Boeing aircraft are integrated into this $500 billion purchase commitment.
- Digital Trade: India’s previous removal of the ‘Google Tax’ in 2024 served as a confidence-building measure for this 2026 deal.
Way Forward
- Safety Valves: Include “Snapback” provisions that allow India to re-impose tariffs if a surge in US imports threatens domestic MSMEs.
- Energy Diversification: Use the deal to secure long-term, fixed-price LNG contracts to stabilize the price of power and fertilizers.
- Data Sovereignty: Ensure that the “Digital Trade Rules” do not compromise India’s Personal Data Protection standards.
- Domestic Support: Launch a “Transition Fund” for dairy and poultry farmers to upgrade technology and compete with US imports.
Conclusion
The 2026 India-US Trade Deal represents a high-stakes gamble. While it secures India’s place in the Western economic orbit, it demands a recalibration of “Strategic Autonomy.” The success of this deal will depend on whether the $500 billion in imports can be leveraged to build a $5 trillion domestic manufacturing base.
Mains Practice Question
“The India-US Interim Trade Deal of 2026 marks a shift from non-alignment to strategic economic integration.” Critically analyze the impact of this deal on India’s energy security and digital sovereignty.
Topic 2: CPI Base Year Revision — Updating the Inflation Lens
Syllabus
- GS Paper III: Issues relating to planning, mobilization, of resources, growth, and development.
Context
On February 11, 2026, the Ministry of Statistics and Programme Implementation (MoSPI) announced the revising of the Consumer Price Index (CPI) base year from 2012 to 2024. This move aims to reflect the changing consumption patterns of Indian households over the last decade.
Main Body: Multi-Dimensional Analysis
- The Need for Re-basing: The 2012 basket was outdated. Over the last 14 years, the share of food and beverages in the average Indian’s expenditure has declined, while the share of services (health, education, digital data) and processed foods has risen significantly.
- Reduced Food Weightage: In the 2012 series, food had a weightage of approximately 45.8%. In the 2024 series, this is expected to drop to around 39-41%. This makes the headline inflation less sensitive to seasonal “Tomato-Onion-Potato” (TOP) shocks and more reflective of “Core Inflation.”
- Inclusion of Modern Goods: For the first time, items like OTT subscriptions, smartphones, internet data packs, and electric vehicle charging are integrated into the “Miscellaneous” category of the CPI basket.
- Monetary Policy Impact: The RBI’s Monetary Policy Committee (MPC) will now have a more accurate “real-time” indicator to set the Repo Rate. An outdated base year often led to “policy errors” where interest rates were kept high due to food spikes, even when the broader economy was cooling.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Statistical Accuracy: Captures the “aspirational India” that spends more on services than just survival. | Data Lag: The transition period may cause confusion in calculating “Year-on-Year” (YoY) growth. | Digital India: The cost of data (now in CPI) directly impacts the success metrics of this mission. |
| Inflation Targeting: Helps the RBI maintain the 4% (+/- 2%) target with more relevant data. | Underplaying Poverty: A lower weight for food might hide the distress caused by high food prices for the bottom 20%. | PMGKAY (Free Ration): Its impact on household savings can now be better mapped against service spending. |
Examples
- The “Data” Shift: A household in 2012 spent almost 0% on mobile data; in 2026, it is a “primary essential,” now reflected in the index.
Way Forward
- Periodic Updates: Move toward a 5-year rebasing cycle (like the US or UK) rather than waiting 14 years.
- Regional Weighting: Ensure that the rural CPI basket captures the increasing penetration of FMCG goods in villages.
- Real-time Data: Use the e-Shram and GSTN data to track price movements in the unorganized and organized retail sectors more frequently.
- Communication: The government must clearly explain to the public how the new “lower” inflation numbers (due to rebasing) do not necessarily mean things are “cheaper” than yesterday.
Conclusion
Rebasing the CPI is not just a statistical exercise; it is a recognition of India’s structural transformation. By moving the lens from 2012 to 2024, the government is ensuring that India’s economic policy is fighting the inflation of today, not the ghost of the past.
Mains Practice Question
“Statistical relevance is the bedrock of effective monetary policy.” Discuss the significance of revising the CPI base year to 2024 in the context of India’s changing consumption landscape.
Topic 3: India-Greece Strategic Partnership — The Mediterranean Pivot
Syllabus
- GS Paper II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Context
On February 11, 2026, India and Greece signed a Joint Declaration of Intent to boost defense industrial cooperation. A significant outcome was the deployment of a Greek International Liaison Officer at the Information Fusion Centre-Indian Ocean Region (IFC-IOR) in Gurugram.
Main Body: Multi-Dimensional Analysis
- India’s Gateway to Europe: Greece is the eastern gateway to the Mediterranean and the EU. This partnership is a key pillar of the IMEC (India-Middle East-Europe Economic Corridor), with the Port of Piraeus acting as the European terminus for Indian goods.
- Countering the “Turkey-Pakistan” Axis: Geopolitically, India’s closeness to Greece serves as a strategic counter-balance to the growing defense cooperation between Turkey and Pakistan. It signals India’s willingness to play a role in the security of the Eastern Mediterranean.
- Maritime Domain Awareness (MDA): The deployment of a Greek officer at the IFC-IOR ensures real-time intelligence sharing on shipping movements, piracy, and “dark shipping” in the Mediterranean and North Indian Ocean.
- Defense Industrial Synergy: Both nations are looking at co-developing and co-producing defense platforms. Greece offers advanced naval technologies, while India offers its BrahMos and Tejas ecosystems for export and maintenance.
- Cultural & Civilizational Ties: The relationship is being framed as a meeting of two ancient civilizations. This “Soft Power” approach helps build a deep-rooted public consensus for strategic moves.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Strategic Depth: Extends India’s naval influence into the Mediterranean. | Turkey Friction: May lead to increased diplomatic friction with Turkey, a key player in the Islamic world. | SAGAR (Security and Growth for All in the Region): Greece is now an extended partner of this vision. |
| Trade Efficiency: Provides a reliable, non-Suez-dependent route for Indian exports via IMEC. | Resource Strain: Managing a permanent presence in the Med requires more naval assets. | Viksit Bharat @2047: Partnerships with EU nations are critical for technology transfer. |
Examples
- Port of Piraeus: Indian companies are exploring a “dedicated terminal” for Indian goods, mirroring Chinese investments but under the IMEC framework.
Way Forward
- Joint Naval Exercises: Conduct annual “Astra-Med” exercises in the Aegean Sea to enhance interoperability.
- SME Cooperation: Create a corridor for Greek and Indian defense SMEs to collaborate on drone and electronic warfare technologies.
- IMEC Fast-tracking: Coordinate with Saudi Arabia and the UAE to ensure the “land” part of the corridor matches the “sea” connectivity provided by Greece.
- Consular Ease: Simplify visa processes for Greek engineers and Indian techies to facilitate the “Defense Industrial” exchange.
Conclusion
The India-Greece partnership is the final piece of India’s “Look West” policy. By anchoring itself in the Mediterranean, India is transitioning from a regional power to a trans-continental stakeholder.
Mains Practice Question
“India’s strategic interest in the Mediterranean is no longer peripheral but central to its European outreach.” Analyze this statement in the context of the 2026 India-Greece Joint Declaration.
Topic 4: Indus Waters Treaty & J&K—A Strategic Shift in Hydropower
Syllabus
- GS Paper II: India and its neighborhood- relations; Bilateral treaties; International dispute resolution.
- GS Paper III: Infrastructure: Energy; Security challenges and their management in border areas.
Context
Following India’s April 2025 notice to place the Indus Waters Treaty (IWT) in abeyance (suspension), the Ministry of Power on February 11, 2026, announced a massive acceleration of hydropower projects in the Chenab basin. The primary focus is the 1,856 MW Sawalkote Project, signaling a move from “strategic restraint” to “sovereign execution” of water rights.
Main Body: Multi-Dimensional Analysis
- The Policy of “Abeyance”: Following a major terror attack in early 2025, India shifted its stance on the 1960 IWT. By treating treaty obligations as “suspended,” India has stopped sharing technical data and prior notifications with Pakistan. This allows for the design and construction of storage-cum-run-of-the-river projects that Pakistan previously stalled through technical objections at the World Bank.
- Sawalkote—The Crown Jewel: The Sawalkote Hydroelectric Project in Ramban is now the centerpiece of this shift. With a capacity of 1,856 MW, it will be J&K’s largest power facility. The project is no longer being modified to suit Pakistan’s “pondage” concerns, as India asserts its right to use the Western Rivers (Indus, Jhelum, Chenab) for its own energy security within the non-consumptive framework.
- Energy Sovereignty for J&K: Despite its vast potential (~18,000 MW), J&K has historically imported power. The completion of the Pakal Dul (1,000 MW), Kiru (624 MW), and Kwar (540 MW) projects by the 2026-27 deadline will make J&K a power-surplus region, fueling industrialization and reducing the high fiscal burden of power subsidies.
- The “Water as a Weapon” Narrative: While India maintains these projects are for energy, Pakistan views them as “water-security threats.” The ability to regulate the flow of the Chenab—a lifeline for Pakistan’s Punjab province—gives New Delhi significant “hydro-leverage.” The move to divert surplus water from the Chenab to the Ravi-Beas system for Punjab (India) and Rajasthan further emphasizes the “India First” water policy.
- Dispute Resolution Gridlock: By rejecting the supplemental award of the Court of Arbitration (CoA) and calling it an “illegal body,” India has essentially bypassed the IWT’s third-party arbitration. This creates a new precedent where bilateralism is the only path forward, challenging the World Bank’s role as a traditional mediator.
- Environmental & Geological Risks: The Chenab basin is in a high-seismic zone (Zone IV/V). Fast-tracking these massive dams without the traditional “slow-paced” environmental audits (often slowed by treaty technicalities) raises concerns about long-term ecological stability and the risk of flash floods during extreme weather events.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Regional Development: Massive job creation in Kishtwar and Ramban; 12% free power to J&K. | Geopolitical Tension: Risk of escalating conflict with a “water-stressed” Pakistan. | PM Development Package (PMDP): The primary funding source for J&K power infrastructure. |
| Energy Security: Reduces dependence on fossil fuels; provides stable base-load green energy. | Ecological Impact: Risk of seismic activity and loss of biodiversity in the fragile Himalayan ecosystem. | National Hydropower Policy: Provides the regulatory framework for these “mega-projects.” |
| Strategic Leverage: Shifts the “asymmetric warfare” cost onto Pakistan by controlling downstream flows. | Project Delays: Security threats from local insurgency remain a hurdle for contractors (e.g., MEIL). | Indus Water Management Authority: The new internal body overseeing the fast-tracked projects. |
Examples
- Sawalkote: Recently issued international tenders worth over ₹5,000 crore for the main dam structure.
- Ratle Project: Moving ahead as a “sovereign decision,” ignoring the ongoing arbitration at the Permanent Court of Arbitration in The Hague.
Way Forward
- Grievance Redressal: Ensure that local communities displaced by the Sawalkote and Pakal Dul projects are rehabilitated with “smart-village” facilities.
- Integrated Water Management: Develop the Ravi-Beas-Sutlej canal link to ensure no drop of the “Eastern Rivers” flows into Pakistan.
- Seismic Monitoring: Install a state-of-the-art “Real-time Seismic Early Warning System” across all dam sites in the Chenab basin.
- Diplomatic Clarity: Clearly communicate to the international community that “abeyance” is a response to cross-border security threats, not a permanent withdrawal from international law.
Conclusion
India’s “Hydro-Strategic” pivot in 2026 is a departure from the 65-year history of the Indus Waters Treaty. By prioritizing J&K’s energy needs and using water as a strategic tool, New Delhi is rewriting the rules of subcontinental engagement.
Mains Practice Question
“The abeyance of the Indus Waters Treaty signifies a shift from ‘passive compliance’ to ‘active sovereignty’ in India’s water diplomacy.” Analyze the implications of this shift on regional security and energy self-reliance in Jammu & Kashmir.
Topic 5: UP State Budget 2026-27—The ₹9.12 Lakh Crore Roadmap
Syllabus
- GS Paper III: Government Budgeting; Infrastructure; Growth and development.
- GS Paper II: Federalism; State-level governance.
Context
On February 11, 2026, Uttar Pradesh Finance Minister Suresh Khanna presented a record ₹9.12 lakh crore budget for the 2026-27 fiscal year. This 12.9% increase over the previous year focuses heavily on industrial expansion, Artificial Intelligence, and “spiritual tourism” ahead of the 2027 State Assembly elections.
Main Body: Multi-Dimensional Analysis
- The “One Trillion Dollar” Ambition: This budget is the penultimate step in UP’s mission to become a $1 trillion GSDP economy. With an estimated growth rate of 13.4%, the state is positioning itself as India’s “Growth Engine.”
- Industrial Corridors & Expressways: The budget allocates ₹27,103 crore for industrial development. Key focus areas include the Ganga Expressway completion and the expansion of the Bundelkhand Defence Corridor, aiming to attract Fortune 500 companies via the newly introduced “FDI Incentive Policy.”
- The AI Mission: In a first for any Indian state, UP has launched the “UP AI Mission” (₹225 crore). This includes setting up Centers of Excellence in Lucknow and Noida to integrate AI into agriculture (precision farming) and governance (Cyber Security Operations Center).
- MSME & Youth Entrepreneurship: To tackle the “unemployment narrative,” the budget proposes the Sardar Vallabhbhai Patel Industrial Zone scheme (₹575 crore) and Mukhyamantri Yuva Udyami Vikas Abhiyan (₹1,000 crore) to establish 1 lakh micro-enterprises annually.
- Spiritual Tourism Infrastructure: Following the success of the Ram Temple in Ayodhya, the budget pumps funds into the “Vedic Wellness City” and connectivity for Varanasi, Naimisharanya, and Vindhyachal. Tourism is now being treated as a high-revenue-generating “industry.”
- Fiscal Prudence: Despite the massive outlay, the state claims to adhere to the 3% fiscal deficit limit set by the 16th Finance Commission. The debt-to-GSDP ratio is projected to fall to 23.1%, down from over 30% during the pandemic era, signaling strong tax collection through GST.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Capital Outlay: 19.5% of the total budget is for asset creation, ensuring long-term growth. | Implementation Gap: Historical data shows slow utilization of funds in rural health and education sectors. | Zero Poverty Abhiyan: Targeted at bringing every family’s income to at least ₹1.25 lakh/year. |
| Women’s Safety: Provisions for 100 working women hostels and increased Pink Bus fleets. | Regional Imbalance: Continued focus on Noida/Lucknow/Ayodhya may leave Western/Eastern UP pockets behind. | UP AI Mission: First-of-its-kind state-led AI research and implementation initiative. |
| Textile Surge: PM-MITRA parks and powerloom subsidies aim to create 30,000 jobs. | Agricultural Distress: Allocation for “allied activities” remains lower than the infra push. | Kanya Sumangala Yojana: Increased outlay for the girl child’s education and health. |
Examples
- Data Center Hub: UP is building 8 Data Center Parks with an investment of ₹30,000 crore, aiming to be North India’s digital warehouse.
- One District One Cuisine: A new twist on the ODOP scheme to promote local food processing and tourism.
Way Forward
- Outcome Budgeting: Move toward “Outcome-based” tracking to ensure the ₹9.12 lakh crore translates into on-ground quality-of-life improvements.
- Tier-II Expansion: Redirect AI and Industrial investments to cities like Gorakhpur, Jhansi, and Bareilly to prevent “mega-city” congestion.
- Skill Linkage: Tie the Yuva Udyami scheme directly with the upcoming PM-MITRA textile parks for immediate employment.
- Health Infrastructure: Focus on filling “specialist” vacancies in the 13 new medical colleges being funded this year.
Conclusion
The UP Budget 2026-27 is a “Growth-First” manifesto. It bets heavily on infrastructure and technology to lift the state’s massive population into a higher income bracket, effectively turning “Population” into a “Productive Asset.”
Mains Practice Question
“A record-sized state budget is a necessary but not sufficient condition for achieving a $1 trillion economy.” Evaluate the Uttar Pradesh Budget 2026-27 in terms of its ability to balance infrastructure growth with human development.
Topic 6: Network Readiness Index 2026—India’s Digital Ascent
Syllabus
- GS Paper III: Science and Technology; IT & Computers; Effects of liberalization on the economy.
Context
The Network Readiness Index (NRI) 2025 report (released on February 4, 2026, and analyzed by the PIB on Feb 11) ranks India 45th globally—a jump of 4 slots. Most notably, India has secured the 1st rank globally in AI Scientific Publications and Annual Investment in Telecommunications.
Main Body: Multi-Dimensional Analysis
- The AI Research Powerhouse: Ranking 1st in AI scientific publications indicates that India’s academic and corporate R&D has finally caught up with the West. The “IndiaAI” Mission and the proliferation of AI labs in IITs have transitioned India from a “user of AI” to a “creator of AI” knowledge.
- Telecom Investment Leadership: India’s 1st rank in annual telecom investment reflects the lightning-fast rollout of 5G Standalone (SA) networks and the initiation of 6G testbeds. The private sector (Jio/Airtel) and the government’s BSNL 4G/5G push have created the world’s most affordable data ecosystem.
- The “Impact” Pillar: India ranks high in the “Impact” pillar (42nd), showing that technology is actually improving lives. This is visible in the UPI-led financial inclusion and the OCEN (Open Credit Enablement Network) which provides credit to the unbanked.
- The Governance Edge: Ranking 1st in E-commerce legislation and ICT services exports shows that India’s regulatory framework (like the Digital India Act) is maturing. India is now the global leader in providing digital public goods (DPG) to other Global South nations.
- The “People” Gap: Despite the 45th rank, India lags in the “People” pillar (Skills and Gender Gap). While the urban workforce is tech-savvy, a significant “Digital Divide” remains in rural literacy and female participation in the digital economy.
- Income-Level Outperformance: The report highlights that India’s network readiness is “greater than would be expected” given its per-capita income. This indicates that India has effectively “leapfrogged” traditional development stages through digital infrastructure.
Positives, Negatives & Government Schemes
| Positives | Negatives/Challenges | Government Schemes |
| Innovation Leader: 1st in AI publications and ICT exports boosts India’s global tech “soft power.” | Cyber Security: High readiness without a proportional rank in “Trust” makes India a target for cyber-attacks. | National Broadband Mission (NBM) 2.0: Focuses on extending high-speed fiber to every village. |
| Market Scale: India is the 3rd largest domestic market, attracting global semiconductor and AI firms. | Gender Gap: India ranks low in “Gender gap in Internet use,” limiting the reach of digital benefits. | Viksit Bharat @2047: The overarching vision driving the NRI improvements. |
| Low-Income Lead: 2nd among lower-middle-income countries, proving the DPG model’s success. | R&D Spending: While publications are high, actual “Gross Expenditure on R&D” remains below 1% of GDP. | IndiaAI Mission: The core scheme behind the 1st rank in AI research. |
Examples
- 6G Testbeds: The Bharat 6G Alliance’s early patents are a major reason for India’s high ranking in “Future Technologies.”
- Global DPG: Over 40 countries are now using or testing India’s “Tech Stack” (Aadhaar/UPI), contributing to the ICT services export rank.
Way Forward
- Cyber-Trust Building: Implement the Digital Personal Data Protection (DPDP) rules strictly to improve the “Governance/Trust” score in future NRI reports.
- Bridging the Rural-Urban Divide: Use the National Broadband Mission 2.0 to ensure that “Mobile Broadband Traffic” is not just an urban phenomenon.
- Incentivizing Private R&D: Move from “Academic Publications” to “Commercial Patents” by providing tax breaks for private-sector R&D in deep-tech.
- Digital Literacy for Women: Launch a nationwide “Drone Didi” and “Coding Kanya” initiative to address the NRI’s gender gap indicators.
Conclusion
India’s performance in the 2026 Network Readiness Index proves that the “Digital India” campaign has entered its Golden Age. By leading in AI research and telecom investment, India is no longer just a “back-office” but the “R&D office” of the world.
Mains Practice Question
“India’s ranking in the Network Readiness Index 2026 reflects a paradox of ‘high-tech capability’ and ‘fragmented social inclusion’.” Discuss the strategies needed to ensure that India’s digital leadership translates into equitable growth.
