Why in news?

On February 28, 2026, Israel carried out a daylight strike on Tehran, calling it a pre-emptive operation. US President Donald Trump confirmed American involvement, stating that major combat operations had begun to stop Iran from developing nuclear weapons.

Iran responded with missile and projectile attacks on Israeli territory and subsequently expanded its retaliation by targeting US bases in Qatar, Bahrain, Jordan, Kuwait, and the UAE.

The widening scope of strikes has pushed the crisis beyond a bilateral confrontation, placing the entire Middle East under threat of a broader regional war.

What’s in Today’s Article?

• What Happened in Iran?
• Iran’s Response
• Trigger: Breakdown of Nuclear Talks and Rising Tensions
• India’s Diplomatic Test Amid Israel–Iran Escalation

What Happened in Iran?

• 
• Explosions were reported in Tehran, with smoke seen rising from several parts of the capital.
• Israel initially announced missile strikes on Iranian targets. A US official later confirmed the attacks were part of a joint military operation.
• Trump called the operation “massive and ongoing,” and the US Department of Defense named it Operation Epic Fury.

Iran’s Response

• Iran retaliated by launching missiles toward northern Israel. Air-raid sirens were activated, and Israeli air defence systems intercepted incoming projectiles.
• Iran expanded its response by targeting US-linked military facilities across the Middle East, including:
  • Al Udeid Airbase (Qatar)
  • Al-Salem Airbase (Kuwait)
  • Al-Dhafra Airbase (UAE)
  • US Fifth Fleet Headquarters (Bahrain)
• Reports also indicated explosions in Saudi Arabia and attacks on US bases in Jordan.

Trigger Behind The Attack: Breakdown of Nuclear Talks and Rising Tensions

• The escalation follows mounting strain over stalled US–Iran nuclear negotiations. A recent round of indirect talks in Geneva, mediated by Oman, failed to produce a breakthrough, though technical discussions are set to continue.
• Iran insists on its right to enrich uranium for peaceful purposes, while the US demands strict limits on its nuclear programme.
• President Trump had expressed dissatisfaction with the pace of talks and repeatedly described Iran as an “imminent threat” and the world’s “number one terror sponsor,” signalling growing impatience ahead of the military action.

India’s Diplomatic Test Amid Israel–Iran Escalation

• Less than two days after PM Modi’s visit to Israel, India faced a major diplomatic challenge as US–Israel strikes on Iran and Tehran’s retaliation widened the regional conflict.
• With deep strategic, economic, and diaspora stakes in West Asia, New Delhi called for restraint, de-escalation, and dialogue.
• Diaspora and Evacuation Concerns
  • India has significant diaspora exposure:
    • ~10,000 Indians in Iran
    • Over 41,000 in Israel
    • 8–9 million across the wider Gulf
  • Embassies issued advisories amid airspace closures and flight disruptions.
  • India’s approach reflects past experience, including the evacuation of over 3,000 nationals during the previous Israel–Iran flare-up.
• Strategic and Economic Stakes
  • Beyond citizen safety, India’s energy security is at risk.
  • Nearly 60% of India’s energy imports come from the region, and threats to close the Strait of Hormuz raise concerns over oil supply disruptions.
  • The US role and President Trump’s explicit stance on Iran further complicate India’s balancing act between strategic partner Israel and longstanding partner Iran.
• A Tightrope of Strategic Autonomy
  • India’s response mirrors its approach to the Russia–Ukraine war: maintaining strategic autonomy, avoiding public condemnation, keeping communication channels open, and prioritising national interests.
  • However, as the Middle East conflict expands and US involvement deepens, India’s room for calibrated neutrality may narrow.
  • The evolving regional dynamics will test New Delhi’s diplomatic agility in preserving its core interests.

Why in news?

India and Brazil signed an MoU on rare earths and critical minerals during President Lula da Silva’s visit to India in February 2026.

The agreement aims to deepen cooperation across the entire mineral value chain — including exploration, mining, processing, refining, and recycling. Both countries seek to strengthen supply chains, enhance competitiveness, and secure reliable access to critical resources essential for strategic and industrial sectors.

What’s in Today’s Article?

• India’s Strategy on Critical Minerals
• What the India–Brazil MoU Means for India?
• Link Between the India–Brazil MoU and Pax Silica
• What the India–Brazil MoU Means for Brazil?

India’s Strategy on Critical Minerals

• India is working to strengthen its capabilities across the entire critical minerals value chain — from exploration and mining to processing, recycling, and recovery.
• In January 2025, the Union Cabinet approved the National Critical Mineral Mission (2024–25 to 2030–31) to accelerate domestic exploration, beneficiation, processing, and recovery from end-of-life products.
• Policy and Regulatory Measures
  • Identification of Critical Minerals - In July 2023, India released a list of 30 critical minerals essential for strategic and industrial sectors.
  • Legal Reforms - The Mines and Minerals (Development and Regulation) Amendment Act, 2023 empowered the Centre to auction blocks for critical and strategic minerals. By September 2025, multiple auction rounds had been conducted.
  • Overseas Partnerships - To reduce reliance on a single country, India is expanding international cooperation. Khanij Bidesh India Ltd. (KABIL) is pursuing overseas acquisitions and exploration agreements in countries such as Argentina and Chile.
  • Trade and Cost Rationalisation - India has reduced customs duties on certain critical minerals and recyclable scrap to lower input costs and improve domestic processing capacity.
  • Boosting Advanced Manufacturing - The government is promoting late-stage manufacturing. India aims to begin domestic production of rare-earth permanent magnets by end-2026 to cut import dependence in sectors like electric vehicles and defence.

What the India–Brazil MoU Means for India?

• Access to Substantial Mineral Reserves - Brazil possesses significant rare earth and critical mineral reserves, of which only about 30% have been explored. The MoU opens avenues for India to partner in exploration and processing, potentially expanding its long-term resource base.
• Strengthening India’s Bargaining Power - Diversifying supply sources enhances India’s leverage in global markets. With Brazil as an alternative partner, India is less dependent on a limited number of suppliers, improving its negotiating position on pricing and terms.
• Enhancing Supply Chain Stability - The agreement signals greater supply security to Indian industries. By reducing vulnerability to export controls or geopolitical disruptions, it can encourage higher private-sector investment in downstream manufacturing.
• Facilitating Standards and Market Access - If India and Brazil harmonise environmental and sourcing standards, Indian manufacturers could more easily access global markets that require transparent and responsible mineral supply chains.

Link Between the India–Brazil MoU and Pax Silica

• Pax Silica is a U.S.-led initiative aimed at securing the “silicon stack” — from raw materials and manufacturing equipment to advanced computing, data centres, and AI hardware.
  • India joined the initiative on February 20, 2026.
• The India–Brazil critical minerals MoU complements Pax Silica’s broader goal of securing supply chains.
• By improving access to and processing of key minerals, the MoU could support one component of the secure silicon ecosystem.
• However, the MoU does not make Brazil a Pax Silica member, nor will cooperation under the MoU operate as a Pax Silica project.
• It remains a separate bilateral arrangement aligned with broader supply chain security objectives.

What the India–Brazil MoU Means for Brazil?

• Leveraging Vast Mineral Reserves - Brazil holds substantial reserves of rare earths, bauxite, manganese, and lithium. The MoU provides an opportunity to convert this mineral wealth into greater industrial value rather than merely exporting raw materials.
• Attracting Investment and Buyers - The agreement can help Brazil draw Indian investment into exploration, mining, and processing projects. Long-term purchase commitments from a large and growing market like India make financing new mines and processing facilities more viable.
• Moving Up the Value Chain - By covering exploration, mining, refining, recycling, and processing, the MoU aligns with Brazil’s objective to strengthen its domestic value chain and reduce dependence on raw ore exports.
• Enhancing Strategic Leverage - Partnership with India strengthens Brazil’s bargaining power in global critical mineral markets, diversifies its partnerships, and positions it as a more influential player in supply chain negotiations.

Why in News?

• Since the announcement of the revamped Disinvestment Policy (2020) and the Public Sector Enterprises (PSE) Policy (2021), the Union Government initially emphasized privatisation and strategic disinvestment.
• However, recent policy developments — including the launch of the National Monetisation Pipeline (NMP) 2.0 — indicate a clear shift from asset sales to value extraction and asset monetisation.
• The focus is on dividends and leasing of assets instead of outright privatisation. 

What’s in Today’s Article?

• Evolution of Disinvestment Policy
• Declining Disinvestment Revenues
• Reasons for Reduced Privatisation
• Asset Monetisation as the New Strategy
• Advantages of the New Approach
• Challenges and Way Forward
• Conclusion

Evolution of Disinvestment Policy:

• Original privatisation push (2020–21): The Public Sector Enterprises Policy (2021) provides a framework for -
  • Government to exit non-strategic sectors.
  • Minimum presence in strategic sectors.
  • Strategic disinvestment encouraged where private sector capacity exists.
• Policy rationale: Government should minimise direct business operations. The private sector is seen as more efficient in managing enterprises.

Declining Disinvestment Revenues:

• Temporary surge: 2022–23 disinvestment revenue (₹35,294 crore), with stake sales in ONGC, LIC, GAIL, and IRCTC, ended a four-year declining trend.
• Subsequent decline: Disinvestment proceeds fell sharply. For example, from a disinvestment revenue of ₹16,507 crore in 2023-24 to ₹10,163 crore (2024-25) and ₹15,562 crore (till date in 2025–26).
• Policy signals:
  • Key changes indicate reduced emphasis on privatisation.
  • Removal of separate disinvestment category in Budget documents.
  • Disinvestment receipts merged into “Miscellaneous Capital Receipts.”
  • No annual disinvestment targets.

Reasons for Reduced Privatisation:

• Limited private sector interest:
  • Key constraints include large employee headcounts, loss-making assets, structural inefficiencies, and political and labour resistance.
  • These factors made many Public Sector Enterprises unattractive to private investors.
• Increasing focus on dividend income:
  • Consistent Dividend Policy (2020): The Department of Investment and Public Asset Management (DIPAM) advised CPSEs to pay higher dividends, use cash reserves efficiently, and balance capex needs and profitability.
  • Capital Restructuring Guidelines (2024): Revised guidelines emphasized value creation in CPSEs, maximising returns for the government.
  • Rising dividend receipts: From ₹39,750 crore in 2020–21 to ₹74,128 crore (2024-25) and ₹59,730 crore (so far in 2025-26). Dividend income now significantly exceeds disinvestment proceeds.

Asset Monetisation as the New Strategy:

• National Monetisation Pipeline (NMP):
  • Launched in 2021 to monetise brownfield infrastructure assets through leasing arrangements. Key features include -
    • No transfer of ownership
    • Private sector participation
    • Revenue generation from idle or underutilised assets
  • Performance: About 90% of the target [₹6 lakh crore (2021–25)] achieved.
• National Monetisation Pipeline 2.0 (2025–30):
  • Target: ₹16.72 lakh crore
  • Focus sectors: Transport infrastructure, energy assets, telecom, warehousing, etc.
  • This represents a major expansion of the asset monetisation approach.

Advantages of the New Approach:

• Fiscal benefits: Stable and predictable revenue through dividends. Reduced political resistance compared to privatisation. Avoids one-time asset sales.
• Economic benefits: Improves utilisation of public assets, encourages private sector efficiency, and retains public ownership.
• Administrative benefits: Lower complexity compared to strategic disinvestment, and faster implementation.

Challenges and Way Forward:

• Fiscal risks: Dividend extraction may reduce reinvestment capacity of CPSEs. Overdependence on dividends can weaken long-term growth.
  • Strengthen corporate governance: Professional management of CPSEs, reduced political interference.
  • Selective privatisation: Focus on loss-making non-strategic sectors.
• Structural issues: Persistent inefficiencies in CPSE management. Asset monetisation does not address operational problems.
  • Balanced public sector reform: Combine strategic disinvestment with monetisation and governance reforms.
• Market risks: Private sector interest depends on economic conditions. Monetisation revenues may fluctuate.
  • Efficient asset monetisation: Transparent bidding processes, and strong regulatory oversight.
• Policy inconsistency: Shift from privatisation to monetisation may create uncertainty among investors.
  • Sustainable dividend policy: Avoid excessive dividend extraction, and ensure adequate capital expenditure. 

Conclusion:

• India’s public sector reform strategy is undergoing a significant transition from privatisation to asset monetisation and dividend extraction.
• While this approach provides steady fiscal returns and political acceptability, long-term success will depend on balancing revenue generation with the financial health and competitiveness of CPSEs.
• A calibrated mix of privatisation, monetisation, and governance reforms remains essential for sustainable public sector management.

Why in the News?

• The Centre has temporarily discontinued the Rice Fortification Scheme under PMGKAY and allied schemes, citing findings from an IIT Kharagpur study on nutrient stability.

What’s in Today’s Article?

• Rice Fortification Scheme (Background, Suspension, Findings of IIT Study, Broader Implications, etc.)

Background of the Rice Fortification Scheme

• Rice fortification was introduced as a nutritional intervention to address widespread anaemia and micronutrient deficiencies in India.
• Under this initiative, Fortified Rice Kernels (FRK), enriched with iron, folic acid, and vitamin B12, were blended with regular rice and distributed through welfare schemes.
• The scheme was implemented under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), as well as through the Public Distribution System (PDS), Integrated Child Development Services (ICDS), and the Mid-Day Meal Scheme.
• The objective was to provide essential micronutrients to vulnerable populations, particularly women and children, by leveraging the existing foodgrain distribution network.

Government Decision to Suspend Fortification

• The Union Food Ministry announced that the process of rice fortification would be temporarily discontinued “until a more effective mechanism for delivery of nutrients to beneficiaries is identified.”
• The decision followed a review of the implementation of rice fortification under PMGKAY and allied schemes.
• The Ministry clarified that this suspension does not reduce foodgrain entitlements and will not affect operations under PDS, ICDS, or the Mid-Day Meal Scheme.
• Thus, beneficiaries will continue to receive their allocated foodgrains, albeit without fortification.

Findings of the IIT Kharagpur Study

• The government had commissioned IIT Kharagpur to assess the shelf life of Fortified Rice Kernels (FRK) and fortified rice under actual storage conditions across diverse agro-climatic zones.
• The study concluded that factors such as Moisture content, Storage condition, Temperature, Relative Humidity and Packaging Material critically influence the stability and shelf life of fortified rice.
• The report found that FRK and fortified rice are susceptible to micronutrient reduction during prolonged storage and routine handling.
• Since rice in the central pool may remain in storage for two to three years, the effective shelf life of fortified rice was found to be shorter than expected, thereby limiting the intended nutritional outcomes.
• These findings raised concerns about whether beneficiaries were actually receiving the expected nutritional benefits.

Supply and Storage Context

• According to official data, against an annual allocation of 372 lakh metric tonnes (LMT) under PMGKAY and other welfare schemes, total availability in the central pool is projected at 674 LMT, including receipts from the Kharif Marketing Season (KMS) 2025-26.
• Large procurement volumes and extended storage duration increase the challenges associated with maintaining nutrient stability in fortified rice.
• The suspension reflects the difficulty of implementing nutrient-sensitive interventions within large-scale foodgrain logistics systems.

Activist and Public Health Perspectives

• Activists who had challenged the scheme in the Supreme Court welcomed the move.
• They argued that fortification is not a scientific method to curb anaemia and that not all anaemia is linked to iron deficiency.
• Critics have raised concerns about the safety, cost-effectiveness, and regulatory oversight of large-scale fortification. They argue that addressing anaemia requires a more comprehensive approach that includes dietary diversity, improved public health measures, and targeted supplementation rather than blanket fortification.
• This debate highlights the tension between population-wide interventions and targeted nutritional strategies.

Broader Policy Implications

• India continues to face high levels of anaemia, particularly among women and children, as reflected in National Family Health Survey (NFHS) data.
• The rice fortification initiative was seen as a scalable solution leveraging the PDS network.
• However, the IIT study underscores the importance of:

• Ensuring scientific validation of large-scale interventions
• Accounting for storage and climatic variations
• Monitoring nutrient retention over time
• Aligning food policy with logistical realities

• The government has stated that fortification will remain suspended until a more robust and effective nutrient delivery mechanism is developed and operationalised.
• This suggests a possible redesign rather than complete abandonment of micronutrient strategies.