Why in news?

Recently, Pakistan Naval Ship (PNS) Hunain, a Yarmook-class corvette, approached an Indian Navy warship at high speed in international waters and manoeuvred unsafely, causing a minor collision.

The incident occurred about 120 nautical miles from the Gulf of Oman in the North Arabian Sea. The Indian warship was on a routine surveillance mission and suffered no damage, continuing its mission. PNS Hunain was damaged.

India called the conduct "unacceptable and unprofessional" and a direct violation of Article 10 of the 1991 bilateral agreement on advance notice of military exercises.

What’s in Today’s Article?

• The 2011 Precedent
• Maritime Zones under UNCLOS
• The 1991 Agreement Explained
• Why the 1991 Agreement Was Signed
• Ramming as a Naval Tactic
• Grey-Zone Warfare in the Arabian Sea

The 2011 Precedent

• This is the second such incident since 2011. In June 2011, the Pakistani warship PNS Babur brushed past the Indian Navy frigate INS Godavari in the Gulf of Aden, causing minor damage to the Indian vessel's helicopter safety net.
• That incident was also taken up diplomatically.

Maritime Zones under UNCLOS

• The incident occurred in international waters. Under the UN Convention on the Law of the Sea:
  • A country's territorial sea extends 12 nautical miles from its coast.
    • One nautical mile equals 1.852 km.
  • The Exclusive Economic Zone (EEZ) extends up to 200 nautical miles, where the coastal state has rights to explore and manage seabed resources.

The 1991 Agreement Explained

• The Agreement between India and Pakistan on Advance Notice on Military Exercises, Manoeuvres and Troop Movements was signed in April 1991.
• Its purpose was to prevent any crisis arising from misreading the other side's intentions.
• Key provisions:
  • Major military exercises close to each other's territory should be avoided. If held, they must follow set regulations and the other side must be informed.
  • Advance notice periods: 15 days for certain air and naval exercises, 60 days for corps-level exercises, 90 days for army-level exercises.
  • Either side can seek clarification on assembly of forces, direction, extent and duration of an exercise.
  • Naval definition: A major naval exercise involves six or more ships of destroyer or frigate size and above, exercising together and crossing into the other's EEZ.
  • Article 10: Naval ships and submarines of the two countries must not close within three nautical miles of each other in international waters, to avoid accidents. This is the provision India says was violated.
  • Aircraft rules: Combat aircraft must not fly within 10 km of each other's airspace, including Air Defence Identification Zones.
    • Exceptions apply for aircraft operating from Jammu, Pathankot, Amritsar and Suratgarh (India) and Pasrur, Lahore, Vehari and Rahimyar Khan (Pakistan), where a 5 km distance applies.
  • On the same day, a companion treaty was signed: the Agreement on Prevention of Air Space Violations and for Permitting Over Flights and Landings by Military Aircraft.

Why the 1991 Agreement Was Signed?

• The 1980s saw a series of confidence-building measures between the two countries.
• Contributing factors included both nations' nuclear weapons programmes, which raised the cost of war, and the Soviet invasion of Afghanistan in December 1979, which made Pakistan and the US keen to avoid tension on Pakistan's eastern border.
• The immediate trigger was Exercise Brass Tacks IV in January 1987, a massive Indian military exercise in Punjab and Rajasthan.
• It involved two opposing corps-level forces, including two armoured divisions and a mechanised division, with simultaneous Air Force and Navy exercises. About 150,000 troops were mobilised.
• The scale rattled Pakistan and led to mechanisms for reducing uncertainty.

Ramming as a Naval Tactic

• Ramming is almost as old as naval warfare. The Greeks and Romans used it as a core weapon.
• The first modern instance came in 1862 at the Battle of Hampton Roads during the American Civil War, when CSS Virginia sank the Union frigate Cumberland.
• The tactic resurfaced in both World Wars, including the sinking of PT-109 commanded by John F. Kennedy.
• It also featured in the Cod Wars between Iceland and the UK over fishing rights.

Grey-Zone Warfare in the Arabian Sea

• The incident mirrors China's grey-zone tactics in the South China Sea, where Beijing uses its Coast Guard and maritime militia to ram vessels and fire water cannons.
• These tactics stay below the threshold of open conflict while advancing strategic goals, exploiting legal ambiguity, similar to salami slicing in Eastern Ladakh.
• Analysts argue that this ambiguity must end: ramming with reinforced hulls or close-range water cannons causing damage comparable to kinetic force should be treated as a grave use of force justifying proportionate self-defence.

Conclusion

The PNS Hunain collision violates Article 10 of the 1991 Agreement and signals the arrival of grey-zone tactics in the Arabian Sea.

For two nuclear-armed neighbours, robust rules of engagement at sea are essential to prevent accidents from escalating into crises.

Why in news?

India has consistently opposed plurilateral trade agreements at the World Trade Organisation (WTO), insisting that trade rules be negotiated by all members.

But the 2026 BRICS New Delhi Declaration, issued under India's chairship, says members recognise the importance of identifying "pathways" for plurilateral initiatives to enter the WTO legal framework.

This comes just months after India blocked such pacts at the WTO's 14th Ministerial Conference (MC14) in Cameroon in March 2026.

What’s in Today’s Article?

• What Plurilateral Agreements Are?
• Why India Opposes Plurilaterals?
• The Investment Facilitation for Development Agreement
• India's Objection to the E-Commerce Agreement
• Pressure on India at the Trade Policy Review
• What the BRICS Declaration Says?
• Why It Matters for India?

What Plurilateral Agreements Are?

• A plurilateral agreement is a trade deal among a group of WTO members rather than the full membership.
• Key features:
  • Countries that join must follow its rules; non-members are generally not bound.
  • Under the Marrakesh Agreement, a plurilateral pact can be added to the WTO rulebook (Annex 4) only by consensus of all members.
  • A multilateral agreement, by contrast, involves the entire WTO membership negotiating rules together.

Why India Opposes Plurilaterals?

• India's objections are systemic rather than issue-specific:
  • Plurilaterals could let a group of powerful or interested countries create new rules without everyone's participation, which is especially risky for developing countries.
  • WTO members should first agree on common safeguards, or "guardrails", for all plurilateral agreements before any single one is added to the rulebook.
  • Adding one agreement first and deciding broader rules later sets a dangerous precedent.

The Investment Facilitation for Development Agreement

• The clearest test case is the China-backed Investment Facilitation for Development (IFD) agreement, launched by the WTO in 2017 to enhance FDI flows.
• At MC14, India blocked its inclusion as an Annex 4 agreement, arguing that:
  • Incorporating IFD risks eroding the WTO's foundational principles and functional limits.
  • Investment is not a core trade issue.
  • Members must first agree on legal safeguards for plurilaterals.
• As many as 129 members support IFD, leaving India as the primary holdout.

India's Objection to the E-Commerce Agreement

• India has also questioned the Western-backed Agreement on Electronic Commerce (ECA).
  • ECA is the world's first baseline set of global digital trade rules, designed to streamline and secure cross-border digital transactions among participating WTO members.
• In a recent letter to the WTO, India challenged the legal basis for the Director-General acting as depositary of the ECA.
• India pointed out that consensus to add the agreement to Annex 4 was not reached on two occasions and asked on what institutional basis the "interim arrangements" were operating.
• According to the WTO Secretariat, 66 members covering about 70 per cent of global trade have adopted a pathway to bring the ECA into force through interim arrangements.

Pressure on India at the Trade Policy Review

• Several countries targeted India's stance during its trade policy review last month:
  • Canada most prominently opposed India's position on plurilaterals.
  • The EU noted that India has benefited significantly from global trade integration and urged it to see plurilaterals as an opportunity to shape the WTO agenda rather than a threat to multilateralism.
  • Gambia and Costa Rica asked India to withdraw its opposition to IFD.
  • Others urged India to join plurilaterals on fossil fuel subsidy reform, plastics pollution and environmentally sustainable plastics trade.

What the BRICS Declaration Says?

• The New Delhi Declaration commits BRICS members to implementing MC14 outcomes, engaging constructively in WTO reform, and identifying appropriate pathways for plurilateral initiatives into the WTO legal framework, including on development-oriented issues, while exploring forward-looking rules.
  • Notably, the term "guardrails" is absent from the declaration despite India holding the chair.
  • Experts warn that plurilaterals cannot work for development issues: if developed countries do not join a plurilateral on food security or farm subsidy reduction, the outcome will be meaningless. Such issues must remain multilateral.
• The declaration also:
  • Strongly advocates immediate restoration of a fully functioning, two-tier binding WTO dispute settlement mechanism and appointment of Appellate Body members without delay.
  • Supports Ethiopia and Iran's bid for WTO accession.
  • Acknowledges China's expansion of zero-tariff treatment to 53 African countries.

Why It Matters for India?

• The direct implication could be India lifting its reservation on IFD, a significant policy shift.
• Two sectors are particularly relevant:
  • Services: India has a huge IT and business services industry. If new international services rules emerge, India needs a seat at the table.
  • Digital trade: With over 60 members moving ahead on e-commerce rules through interim arrangements, staying out risks India being bound later by rules it did not shape.

Conclusion

The BRICS declaration signals a subtle softening in India's opposition to plurilaterals, driven by mounting international pressure and the risk of isolation.

Yet the missing "guardrails" language and the systemic concerns about IFD and e-commerce remain unresolved. India must balance openness to shaping new trade rules against protecting the consensus-based multilateralism that safeguards developing countries.

Context:

• India's real GDP grew 7.8 per cent in April–June 2026, exceeding the RBI's forecast of 7 per cent despite the West Asian conflict, high energy prices and uncertain global trade.
• In this context, this article highlights that the true significance of this number lies in the breadth of production and demand.
• It also argues that India must now convert this momentum into private investment, quality jobs and domestic resilience.

A Sustained Growth Trajectory

• The latest quarter continues a strong run:
  • 2023-24: 7.2 per cent
  • 2024-25: 7.1 per cent
  • 2025-26: 7.7 per cent
  • April–June 2026: 7.8 per cent
• Real GDP, the value of goods and services after adjusting for inflation, rose to Rs 81.36 lakh crore.
• Real Gross Value Added (GVA), the value added by farms, factories and services before product taxes and subsidies, grew 8.2 per cent to Rs 73.82 lakh crore.

Broad-Based Production Growth

• Growth is spread across sectors, with a few identifiable weak spots:
  • Manufacturing: 9.2 per cent;
  • Utilities: 8.9 per cent;
  • Construction: 7.7 per cent;
  • Secondary sector overall: 8.6 per cent;
  • Services: 10 per cent, led by finance, real estate, IT and professional services at 12.1 per cent;
  • Agriculture: 3.6 per cent;
  • Mining: contracted 2.4 per cent.

Strong Demand Indicators

• Demand-side data reinforces the picture:
  • Gross fixed capital formation (GFCF) grew 11.9 per cent
  • Private consumption grew 7.1 per cent
  • Real exports grew 12 per cent

The Investment Composition

• Using GFCF data for 2023-24, analysts break down who is investing:
  • Private corporations: 10.3 per cent of GDP;
  • General government: 4.2 per cent of GDP;
  • Total public sector (including public corporations): 7.8 per cent of GDP;
  • Total non-public investment (including household investment in housing and unincorporated businesses): 24.1 per cent of GDP.
• The lesson is clear. Public capital expenditure has built the platform, but the next acceleration requires more private investment.

Understanding the Base Year Change

• The base year was updated from 2011-12 to 2022-23. A base year removes inflation and reflects the economy's structure.
• Updating it replaces an outdated market basket with today's products, services and prices.
• Some estimates may rise and others fall, but "changing the ruler does not shrink the economy."

India Among the Fastest-Growing Major Economies

• On comparable year-on-year data, India's 7.8 per cent exceeded:
  • Malaysia: 6 per cent
  • Singapore: 5.9 per cent
  • Indonesia: 5.29 per cent
  • China: 4.3 per cent
• India's expanding market supports global demand for energy, technology, machinery and services, while offering a trusted location for diversified supply chains.
• This advances India's path to becoming the world's third-largest economy in nominal terms.
• But since rankings also reflect prices and exchange rates, the milestone will endure only if real growth leads to higher productivity, stronger firms and better household incomes.

Employment: The Decisive Test

• India added 17.19 crore jobs between 2014-15 and 2023-24, according to RBI KLEMS-based data.
• The next employment revolution must focus on job quality through productivity, wages, formalisation, social security and skilling.
• Women's labour force participation reached 41.7 per cent in 2023-24.
• Bringing more women into productive employment requires safe transport, affordable childcare, flexible work, and access to credit and markets.

The Agenda for the Next Phase

• Manufacturing must move from assembly to design, components, machinery, electronics and clean technology.
• Services must spread beyond metros into tourism, health, education, logistics, finance and Indian-language digital businesses.
• AI preparedness must move from adoption to original capability through domestic compute, Indian-language data, research talent and trusted applications.
• Free Trade Agreements must be properly used. An FTA utilisation mission should guide firms on tariff rules and markets.
• MSMEs need hand-holding on non-tariff barriers through shared testing, affordable certification, standards, customs support and buyer discovery.

Energy and Domestic Resilience

• External ambition requires domestic resilience. India should counter energy risks through diversified suppliers, long-term contracts, strategic reserves, renewables, domestic exploration and efficiency.
• Timely infrastructure, predictable regulation, easier credit and stable taxation can crowd in private investment.

Conclusion

• The 7.8 per cent quarter warrants confidence, not complacency.
• India must convert public capital expenditure into private investment, job numbers into quality employment, and FTAs into opportunities for MSMEs.
• If energy and macroeconomic stability accompany inclusion, productivity and transparent measurement, becoming the third-largest economy will be a foundation for broad-based prosperity rather than a mere statistical milestone.

Why in the News?

• NITI Aayog has released the India Electric Mobility Index (IEMI) 2025, with Delhi emerging as the top performer in electric vehicle adoption and e-mobility ecosystem development, followed by Maharashtra and Karnataka.

What’s in Today’s Article?

• About IEMI (Background, Purpose, Structure, etc.)
• News Summary (Key Findings of the Latest Report)

About the India Electric Mobility Index

• The India Electric Mobility Index (IEMI) is a composite index that assesses both the policy framework and implementation outcomes for electric mobility at the state level.
• It was developed by NITI Aayog in collaboration with WRI India. This is the second edition of the index, following the 2024 version.
• Purpose: The index tracks, evaluates and scores all Indian States and Union Territories out of 100. Its objectives are to:
  • Inform decision-making at the state level
  • Foster healthy competition among states
  • Promote sharing of best practices

Structure of the Index

• The IEMI assesses performance across 16 indicators grouped under three core themes, each carrying different weightage:
• Transport Electrification Progress (50% weightage): Evaluates market absorption, consumer acceptance and demand-side momentum by measuring how effectively EVs are being adopted and supported.
• Charging Infrastructure Readiness (30% weightage): Captures charger-to-vehicle ratio, subsidies for charging infrastructure, building bye-laws for charging, and power availability.
• EV Research and Innovation Status (20% weightage): Covers EV startups, research and development initiatives, and patents.

News Summary: Key Findings

• Composite scores across all 36 States and Union Territories range from 10 to 84, with a median score of 40. The top performers are: Delhi (84), Maharashtra (78), Karnataka (73), Chandigarh (71) and Goa (65).
• Compared with the 2024 index, Delhi and Maharashtra retained the top two positions. Karnataka moved up to third, overtaking Chandigarh, while Goa climbed ten spots to fifth place.
• The most notable improvement came from Madhya Pradesh, which rose from 23rd to seventh rank.
• The top score itself improved from 77 in 2024 to 84 in 2025, indicating that leading states are continuing to advance rather than plateauing.

Performance Among Large States

• Of the 17 large states, only Maharashtra and Karnataka featured among the top performers.
• Eight large states qualified as frontrunners, scoring between 50 and 64 out of 100:
  • Tamil Nadu, Madhya Pradesh, Odisha, Andhra Pradesh, Telangana, Haryana, Rajasthan and Uttar Pradesh
• Seven large states were classified as emerging performers, scoring between 35 and 49:
  • Chhattisgarh, West Bengal, Bihar, Kerala, Jharkhand, Punjab and Gujarat

Theme-Wise Performance

• Transport Electrification Progress
  • This carries the highest weightage at 50%, and performance here was the weakest overall.
  • Only three States and UTs, Delhi, Chandigarh and Maharashtra, qualified as top performers in this category.
  • The report notes that for most States and UTs, transport electrification progress remains the largest opportunity for improving overall performance.
• Charging Infrastructure Readiness
  • Karnataka recorded the highest score nationwide at 97, followed closely by Goa (92) and Maharashtra (91).
  • This indicates that some states have built charging networks faster than they have converted vehicle fleets, creating a mismatch between infrastructure and adoption.
• EV Research and Innovation
  • Delhi achieved the top score of 94 in this category, reflecting strength in EV startups, R&D activity and patents.

Identified Barriers

• The report identifies three main obstacles to progress:
  • Limited charging infrastructure in many states
  • Dispersed settlements, which make charging networks harder and costlier to build
  • A nascent innovation ecosystem outside a few leading states
• A key observation is that charging rollout and EV adoption are moving at different speeds across the country, a sign that the transition remains uneven.
• With foundational EV policy now in place for most States and UTs, the report argues that the focus must shift from policy formulation to effective implementation.

Why Electrification Matters?

• Road transport accounts for roughly 12% of India's energy-related carbon dioxide emissions, making the sector central to climate goals.
• Beyond emissions, the transition also carries economic and strategic significance.
• Reducing dependence on imported crude oil improves energy security and eases pressure on the current account, a concern that has grown sharper with elevated global oil prices.
• NITI Aayog has framed the transition to electric mobility as an economic, environmental and strategic imperative for the Viksit Bharat 2047 ambition.

India's EV Adoption Trajectory

• The report documents substantial growth in EV uptake:
  • EV penetration, the share of EVs in total vehicles registered, reached 8.25% in 2025-26, up from just 0.5% in 2018.
  • Over 8.7 million EVs were running on Indian roads in 2025-26.
  • Close to 2.5 million EVs were registered during 2025-26 alone, a rise of about 25% over the previous year.

The Global Comparison

• India's 8.25% penetration rate should be read against international benchmarks.
• In 2025, electric cars accounted for:
  • Around one-tenth of new car sales in the United States
  • More than a quarter in the European Union
  • Over half in China
• Projections suggest that by 2040, around 40% of all new car sales globally would be electric.
• India's position reflects both the distance still to cover and the distinct shape of its transition, driven predominantly by two- and three-wheelers rather than passenger cars, which is a pattern suited to Indian mobility patterns and income levels.

Significance of the Index

• The IEMI serves three practical functions.
• It creates comparative pressure among states by making performance visible and ranked, which has proven effective in other policy areas.
• It disaggregates the challenge by separating adoption from infrastructure from innovation, allowing states to identify where specifically they lag.
• It shifts attention to implementation. With most states having formulated EV policies, the constraint is no longer policy design but execution, charger deployment, subsidy disbursement, building code enforcement and grid readiness.

Context:

• India’s development strategy increasingly emphasises inclusive growth, with the idea of Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayas.
• The next phase of this inclusive growth can come from India’s vast marine and fisheries resources, particularly through sustainable exploitation of the Exclusive Economic Zone (EEZ) and high seas.
• The approach seeks to transform geographical and economic marginalisation into opportunity by recognising backward districts as Aspirational Districts, border settlements as Vibrant Villages, and the Northeast as Ashtalakshmi.

From Green and White to Blue Revolution:

• India’s development experience has witnessed major transformations -
  • Green revolution: Addressed food shortages and strengthened India’s contribution to global food security. India is now among the leading producers of rice, wheat, pulses and millets.
  • White revolution: Eliminated chronic milk shortages and dependence on dairy imports, making India the world’s largest milk producer.
  • Blue revolution: The fisheries and aquaculture sector represents the next major opportunity for food security, nutrition, employment and exports.
• The blue economy broadly refers to the sustainable use of ocean resources for economic growth, improved livelihoods and employment while preserving marine ecosystem health. 

India’s Untapped Maritime Potential:

• India has over 11,000 km of coastline; an EEZ of nearly 24 lakh sq km; and a rich maritime heritage and substantial marine biodiversity.
• Despite this potential, fishing historically remained concentrated close to the coastline.
• The deep waters of the EEZ and high seas offer opportunities for sustainable harvesting of high-value species such as tuna.
• The creation of the Ministry of Fisheries, Animal Husbandry and Dairying in 2019 gave dedicated institutional attention to fisheries.
• The sector has subsequently emerged as a sunrise sector. India is now the 2nd-largest fish-producing country, contributing around 8% of global fish production.
• Fisheries and aquaculture support the livelihoods of nearly 3 crore fishers and fish farmers, while fish production exceeded 195 lakh tonnes in 2024-25. 

Policy Push for Deep-Sea and High-Sea Fisheries:

• The Union Budget 2025-26 recognised the untapped potential of India’s deep waters and proposed an enabling framework for sustainable fisheries in the EEZ and high seas.
• The Fisheries Rules for the EEZ and Guidelines for Fisheries in the High Seas, 2025 mark an important shift towards expanding India’s marine fishing frontier while keeping conservation at the centre.
• A key feature is placing traditional fishing communities and their collective institutions at the centre.
• Priority is given to fisheries cooperatives; Fish Farmer Producer Organisations (FFPOs); and Indian fishermen.
• This can enable fishing communities to access deeper waters, modern technology, finance and markets rather than allowing expansion to benefit only large commercial operators.

Lakshadweep - A Strategic Maritime Asset:

• Lakshadweep illustrates India’s enormous maritime potential.
• Despite having a land area of only around 32 sq km, it possesses nearly 145 km coastline; lagoon area of about 4,200 sq km; territorial waters exceeding 20,000 sq km; and EEZ of about 4 lakh sq km.
• Thus, Lakshadweep accounts for nearly one-sixth of India’s EEZ, highlighting the strategic and economic significance of India’s island territories.
• The Pradhan Mantri Matsya Sampada Yojana (PMMSY) has also supported fisheries development projects in Lakshadweep.

Fisheries as an Engine of Jobs, Exports and Women’s Participation:

• India’s seafood reaches more than 120 countries. Seafood exports crossed ₹73,000 crore in the last financial year mentioned, representing a rise of over 140% since 2013-14.
• Greater use of digital authorisation systems; vessel tracking; international certification; processing and quality-control systems can improve traceability, market access and India’s competitiveness in premium seafood markets.
• Deep-sea fisheries can generate employment beyond fishing itself, including processing, cold chains, transportation, packaging, logistics and exports.
• This creates opportunities for youth and can expand women’s participation in processing and value addition.

Sustainability Must Accompany Expansion:

• The expansion of marine fisheries must not compromise ocean ecosystems.
• Unsustainable fishing, overexploitation and Illegal, Unreported and Unregulated (IUU) fishing can undermine long-term food security and livelihoods.
• The new framework therefore emphasises compliance with conservation measures; sustainable harvesting; monitoring and vessel tracking; action against IUU fishing; and responsible exploitation of marine resources.

Way Forward:

• For India’s Blue Economy to become genuinely inclusive, the focus should extend from merely increasing fish production to developing a complete marine value chain.
• This requires -
  • Modern technology: GPS, satellite monitoring, deep-sea fishing technology and digital traceability.
  • Access to finance: Affordable credit and insurance for small fishers and cooperatives.
  • Cold-chain infrastructure: Reducing post-harvest losses and improving export quality.
  • Skill development: Training youth in modern fisheries, navigation, processing and marine technologies.
  • Women-led value addition: Greater participation in processing, packaging and marketing.
  • Marine conservation: Science-based catch limits, sustainable fishing practices and stronger action against IUU fishing.
  • Cooperative approach: Strengthening fisheries cooperatives and FFPOs so that local communities capture a larger share of value. 

Conclusion:

• The Blue Revolution can become an important pillar of Viksit Bharat @ 2047 by combining economic opportunity with ecological responsibility.
• Therefore, fishing must not merely remain an inherited occupation but as a modern, technology-driven and globally connected profession balancing the ‘triple bottom line’ of economic viability, social equity and ecological sustainability.

Context

• India’s mineral resources are concentrated in States such as Odisha, Jharkhand, Chhattisgarh and Karnataka.
• These resources support industrialisation, employment and public revenue. However, mining also causes displacement, environmental degradation, infrastructure pressure and depletion of non-renewable resources.
• The Mines and Minerals (Development and Regulation) Amendment Act, 2026 raises important questions about the distribution of mining benefits and burdens.
• Although the amendment seeks to promote investment, it has significant implications for State fiscal autonomy, constitutional federalism and resource justice.

Mineral Wealth and Unequal Regional Development

• India’s mineral economy reflects the geographical concentration of natural resources.
• Odisha, Jharkhand, Chhattisgarh and Karnataka possess valuable deposits of coal, iron ore and other minerals that supply industries across the country.
• Mining generates investment, employment and industrial growth. Royalties, auction premiums and other payments strengthen State finances.
• However, mineral-producing regions frequently bear the direct costs of extraction, including:
  • Displacement and resettlement of communities.
  • Environmental damage and ecological loss.
  • Pressure on roads, water supply, healthcare and other public infrastructure.
  • Long-term economic consequences of extracting non-renewable resources.

Section 9D and the Question of State Revenue

• Section 9D restricts State Governments from imposing taxes, cesses or other levies on mineral rights or mineral-bearing land except under conditions prescribed by the Centre.
• The Central Government argues that the provision will create a predictable taxation environment, prevent excessive levies and encourage long-term investment.
• Mining projects involve substantial capital and operate over extended periods, making financial stability important for investors.
• However, the issue extends beyond existing revenues. The Centre maintains that 90% of mining sector revenue accrues to States and that this arrangement will continue.
• The larger concern is whether States will retain the ability to raise additional revenue from mineral resources in the future.
• A mineral-rich State possesses a natural economic advantage. Restricting its ability to use that advantage for development may reduce its fiscal flexibility.
• NITI Aayog’s Fiscal Health Index has recognised the revenue mobilisation performance of Odisha and Chhattisgarh and the role of mining receipts. 

The Federal Problem

• Under Entry 50 of the State List, States possess the power to tax mineral rights, subject to limitations imposed by Parliament through laws relating to mineral development.
• The 2026 Amendment raises questions about the extent to which Parliament can restrict these powers through mineral-development legislation.
• While Entry 50 permits limitations on taxation of mineral rights, extending restrictions to mineral-bearing land may create a separate constitutional issue concerning Entry 49.
• The amendment therefore raises a broader question: can a Central law regulating mineral development substantially restrict a State’s independent power to tax land?

Fiscal Federalism and Resource Justice

• India’s federal system requires States to perform important responsibilities while possessing adequate financial resources.
• Mineral-producing States often bear the direct consequences of extraction, including environmental damage, infrastructure stress and social displacement.
• If States are prevented from raising resources from mineral wealth, they may face difficulties financing the development needs of affected communities.
• This creates a potential imbalance between national benefits and regional costs.
• Fiscal federalism requires a balance between national economic objectives and the financial autonomy necessary for States to fulfil their responsibilities.
• Uniformity may encourage investment, but excessive centralisation can weaken the ability of States to respond to their own economic and environmental conditions.

The Way Forward: Balancing Investment and State Autonomy

• The debate over the MMDR Amendment should not be reduced to a choice between investment and taxation. Both objectives are important.
• Investors require stable rules, transparent taxation and long-term certainty. States require adequate revenue, constitutional authority and the ability to finance public services.
• A balanced approach would seek to:
  • Maintain predictable taxation for mining investors.
  • Preserve the constitutional powers of State Governments.
  • Ensure adequate compensation for extraction-related costs.
  • Strengthen transparency in the distribution of mining revenues.
  • Encourage cooperation between the Centre and States in mineral policy.
• Such an approach would recognise that national industrial development depends partly on the economic and social stability of mineral-producing regions.

Conclusion

• The MMDR Amendment, 2026, represents an important development in India’s mining and federal governance framework.
• Section 9D seeks to promote investment certainty and prevent excessive levies, but it also raises questions about the future fiscal autonomy of mineral-rich States.
• A sustainable mining policy must combine investment certainty, fiscal federalism, environmental responsibility and equitable resource distribution.
• The long-term success of India’s mineral economy will depend not only on how much wealth is extracted, but also on how fairly that wealth and its costs are shared.

About Diplodocus:

• Diplodocus belongs to a group of enormous dinosaurs called sauropods.
  • The sauropods were large, plant-eating dinosaurs with long necks, massive bodies, and four pillar-like legs to support the body.
• It is the longest complete dinosaur that scientists have discovered.
• Diplodocus translates as ‘double beam’. It refers to the dinosaur’s tail bones.
• Diplodocus lived during the Late Jurassic, 155-145 million years ago.
• Remains of this dinosaur have been found in North America, especially in Colorado, Montana, Utah, and Wyoming.