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Article
08 Sep 2026

Nicotine Pouches in India: A Product Beyond the Reach of Existing Laws

Why in news?

A new study led by the ICMR-National Institute of Cancer Prevention and Research has found that nicotine pouches are reaching Indian cities through online platforms, hookah shops and gig delivery services.

The study follows a warning by the World Health Organization in May 2026 about the health dangers of these products. Yet it remains unclear which Indian law, if any, governs them.

What’s in Today’s Article?

  • What Nicotine Pouches Are?
  • Why COTPA Does Not Apply?
  • The Debatable Position under the Drugs Act
  • Why the Vape Ban Does Not Cover Pouches?
  • Could Pouches Be Treated as Food?
  • The Import Framework
  • The Duty-Free Shop Question
  • The Way Forward

About Nicotine Pouches

  • A nicotine pouch is a small, tobacco-free, tea-bag-like sack. It contains nicotine, flavourings and plant-based fibres.
  • Users place it between the lip and gum for up to an hour. Nicotine is absorbed directly into the bloodstream.
  • There is no smoke, no vapour and no spitting. This makes the product discreet and easy to use, which adds to its appeal among young consumers.

Why COTPA Does Not Apply?

  • The Cigarettes and Other Tobacco Products Act, 2003 (COTPA) regulates the marketing, advertising and sale of cigarettes and other tobacco products. However, it does not cover every product containing nicotine.
    • COTPA's definition of tobacco products is limited to items listed in the Act.
    • Nicotine pouches are not among the listed products.
    • Restrictions on the freedom of trade and commerce must be strictly interpreted. Courts cannot stretch the law to cover unlisted products.
  • If Parliament wanted to cover every extract of the tobacco plant, it could have said so. Since it did not, nicotine pouches fall outside COTPA.

The Debatable Position under the Drugs Act

  • The status of nicotine pouches under the Drugs and Cosmetics Act, 1940 is unclear. There are arguments on both sides.
  • Argument for coverage
    • Nicotine is not listed as a drug in any schedule of the Act. But nicotine patches and gums have been approved as drugs by the Drug Controller General of India for treating nicotine addiction.
    • Schedule K of the Drugs and Cosmetics Rules, 1945 exempts gums and lozenges containing less than 2 mg of nicotine from licensing and prescription requirements.
    • If nicotine were not a drug at all, there would be no need for such an exemption.
    • This suggests that all other nicotine products are meant to be regulated under the Act.
  • Argument against coverage
    • Pouches are different from patches and gums. They make no therapeutic claim and do not aim to treat addiction.
    • They are simply a substitute for cigarettes. On this reading, they are not drugs.

Why the Vape Ban Does Not Cover Pouches?

  • The Prohibition of Electronic Cigarettes Act, 2019 (PECA) bans the import and sale of vapes. The very need for PECA shows that the Drugs Act did not give the government enough power to ban vapes.
  • Nicotine pouches differ from vapes in two important ways: they contain no electronic device, and they produce neither smoke nor vapour. Hence PECA does not apply to them.

Could Pouches Be Treated as Food?

  • The Prevention of Food Adulteration Act and the Food Safety and Standards Act define food very broadly.
  • Food includes any processed, partially processed or unprocessed substance meant for human consumption.
  • Court rulings on supari and chewing tobacco have held that this definition covers items that are chewed rather than swallowed.
  • It is therefore arguable that nicotine pouches could fall within the definition of food.

The Import Framework

  • Import restrictions in India flow from two laws:
    • Foreign Trade (Development and Regulation) Act, 1992: Empowers the Central government to prohibit, restrict or regulate imports. The Directorate General of Foreign Trade (DGFT) administers this and publishes the ITC-HS classification, listing which goods are free, restricted or banned.
    • Customs Act, 1962: Section 11 allows the government to prohibit goods by notification, including on grounds of protecting human, animal or plant life.
  • After the World Customs Organization updated the Harmonized System, new sub-categories were created for oral nicotine products that do not involve combustion.
  • Code 2404 91 30 covers tobacco-free single-use pouches (Zyn or Lyft type). Code 2404 91 90 covers other non-therapeutic oral nicotine products.
  • Under the DGFT schedule and the rules of the Central Board of Indirect Taxes and Customs, goods under 2404 91 30 are "restricted". This means:
    • They cannot be cleared merely on payment of duty, unlike "free" items.
    • They are not banned outright, unlike "prohibited" e-cigarettes.
    • They require a specific licence or permission, for which the DGFT consults the health and other ministries.

The Duty-Free Shop Question

  • Nicotine pouches are currently sold at a few duty-free stores at Indian airports. These stores are licensed under Section 58 of the Customs Act.
  • In Flemingo Duty Free Shop Pvt. Ltd. v. Shri Kaushik Bhattacharya (2024), the Calcutta High Court held that a duty-free store does not "import" goods into India, as it is deemed to be located outside India for customs purposes.
  • However, this does not mean Indian law is absent from duty-free shops. If it were, such shops could stock arms and ammunition, and no court or police station would have jurisdiction over crimes committed there. That would be absurd.
  • Only specified goods such as cigarettes, alcohol, jewellery, watches, food and small electronics are permitted at duty-free shops.
  • Nicotine pouches are not on this list, unless they are classified as food. Given their "restricted" status, it is unlikely that any import licence has been granted.

The Way Forward

  • The legal position is complex, but the solution is simple.
  • A notification under the Customs Act and the Foreign Trade Act banning the import and sale of nicotine pouches on health grounds can be issued within minutes.
  • The lesson from vapes is clear: the government acted slowly, demand became entrenched, and the eventual ban led to large-scale smuggling.
Polity & Governance

Article
08 Sep 2026

India's Opportunity to Put BRICS Back Together

Context:

  • The 18th BRICS Summit will be held in New Delhi on September 12–13, 2026. India is the chair this year.
  • In this context, former BRICS Sherpa T.S. Tirumurti argues that BRICS has drifted far from its original purpose.
  • The Delhi summit gives India a chance to bring coherence back to the expanded grouping and restore its reform-oriented agenda.

BRICS Was Built for Reform, Not Rivalry

  • BRICS was formed to give Brazil, Russia, India, China and South Africa a greater voice in global governance, especially in financial and economic institutions.
  • Its aim was a more equitable multilateral order. India was an enthusiastic early participant and saw the group as a vehicle for real reform.
  • India hosted its first BRICS Summit in 2012 (the fourth overall) under the theme "Global Stability, Security and Prosperity."
  • The Indian presidency helped lead to the creation of the New Development Bank (BRICS Bank). India also pushed for integrating a counter-terrorism architecture into BRICS' work.

China Changed the Direction of BRICS

  • China saw BRICS differently. It treated the group as a counterpoise to Western dominance and as a platform to amplify its own global ambitions.
  • In 2010, BRICS countries accounted for nearly 20 per cent of world GDP, which made the group useful for China.
  • Through BRICS-Plus and BRICS Outreach, China sought to reach the Global South and position itself as the second pole in a future bipolar world.
  • India soon found itself doing two jobs at once: pursuing reform and acting as a counterweight to China.
  • India, Brazil and South Africa also realised that Chinese support for reform was selective.
    • China did not back their bid for permanent seats on the UN Security Council.
  • India therefore shifted its focus to BRICS consolidation and intra-BRICS cooperation.
  • This year's theme for India's chairship rests on four pillars — Resilience, Innovation, Cooperation and Sustainability. It draws on PM Modi's vision of "Humanity First" and a "people-centric" approach.

The Consensus Principle Is Under Strain

  • Consensus kept BRICS cohesive. There was a real danger that BRICS would go the way of the Shanghai Cooperation Organisation, where the majority can push its views through.
  • India and Brazil resisted this. The 2019 Brasilia Summit was held with only the five original members and no invited guests.
  • In 2020, under the Russian presidency, the first non-consensus chair's statement was issued on COVID-19.
  • The same happened at the BRICS Foreign Ministers' meeting in New Delhi in May 2026 because the new members could not agree. Experts warn that if non-consensus documents become routine, BRICS will cease to be effective.

Expansion Has Tested Cohesion

  • China pushed for expanding the New Development Bank and then BRICS itself. India and Brazil resisted but could not prevent it.
  • BRICS now has 11 members after the addition of Egypt, Ethiopia, Iran, Saudi Arabia, the UAE and Indonesia, along with 10 partner countries.
  • India's caution has been vindicated. The new members have begun fighting among themselves and are subverting BRICS through bilateral conflicts.
  • The original five have serious differences too, but they know how to manage them for the greater good of the group.
  • In this context, analysts cautions that BRICS must not become another SAARC, where bilateral disputes paralysed the organisation.

The Struggle Between "Non-West" and "Anti-West"

  • India wants BRICS to remain a "non-West" group. Some members are pushing to make it "anti-West."
  • This pressure is growing because of several developments: China's competition with the US for global leadership, Russia's war in Ukraine, and Iran being bombarded by the US and Israel.
  • India's own position has become harder. Brazil and India face punitive tariffs from US President Donald Trump. The US Congress is considering legislation to penalise countries importing Russian oil.
  • The Quad is being weakened by the US, India-US relations are under pressure, and Pakistan is being courted by the US at India's expense. The more erratic the US is towards BRICS, the greater the risk of BRICS moving in the wrong direction.
  • Fortunately, many other BRICS members share India's view. They want change in the global order, but not geopolitical realignment with China and Russia. They benefit from engaging with multiple actors across camps.

The Larger Danger of Parallel Global Structures

  • Both the US and China are building parallel visions of the world and playing by their own rules rather than negotiated international norms.
  • Neither is interested in reforming existing institutions. They are creating parallel structures in emerging areas such as Artificial Intelligence, digital and internet governance, data ownership, 5G/6G and telecom, satellite navigation, and electric vehicles.
  • China has set up a new World AI Cooperation Organisation in Shanghai. This adds to earlier initiatives like the Asian Infrastructure Investment Bank, the Belt and Road Initiative and the Digital Silk Road, all of which challenge the Bretton Woods institutions.
  • China sees BRICS as one vehicle for these goals. Its push for de-dollarisation through a common BRICS currency has received a lukewarm response. Members are uncomfortable with a renminbi-dominated currency.
  • They prefer linking payment systems, central bank digital currencies and national-currency transactions. Still, China is formally launching mBridge, an alternative payment system. India does not want an alternative Bretton Woods system dominated by China.

Reviving Reformed Multilateralism

  • The Delhi Summit is an opportunity for course correction. India has worked hard to persuade new members to set aside political differences.
  • PM Modi first articulated the idea of "reformed multilateralism" at the 2018 BRICS Summit in South Africa. By 2019, India, Brazil and South Africa had placed it in the Brasilia Summit document.

BRICS as the Voice of Global South Middle Powers

  • At Davos, the Canadian Prime Minister spoke of West-centric middle powers coming together. Global South middle powers are different, and BRICS is the only credible organisation of such powers.
  • It has weaknesses: China is hardly a middle power and holds disproportionate influence, and some deserving middle powers are absent.
  • India and China need to find greater synergy on emerging global issues even as their bilateral differences are contained. Despite these limitations, BRICS has great geopolitical and geo-economic potential.

Conclusion

  • BRICS has drifted from reform towards rivalry, and expansion has weakened its cohesion.
  • As chair of the Delhi Summit, India must revive the grouping's original purpose of reformed multilateralism, protect the consensus principle, and keep BRICS "non-West" rather than anti-West.
  • This serves India's core interest of multi-alignment. If India does not lead, others will.
Editorial Analysis

Article
08 Sep 2026

Digital Hawala - Technology’s New Frontier in Money Laundering and Terror Financing

Why in News?

  • The centuries-old hawala and other underground banking systems are undergoing rapid technological transformation, dubbed as digital hawala.
  • This is highlighted in the latest report of the Financial Action Task Force (FATF), titled “Investigating Professional Money Laundering, Underground Banking, and the Use of Hawala and Other Similar Service Providers”.
  • It identifies the fusion of traditional hawala with virtual assets, fintech platforms, encrypted communication and artificial intelligence (AI) as a major emerging threat.
  • Nearly 90% of surveyed jurisdictions reported hawala networks operating within their territories, while nearly 70% observed the incorporation of new technologies into such networks.

What’s in Today’s Article?

  • From Traditional Hawala to ‘Digital Hawala’
  • Why Digitisation Matters?
  • Turkiye Case - Digital Hawala and Terror Financing
  • Professionalisation of Underground Banking
  • Challenges
  • Way Forward - FATF Recommendations

From Traditional Hawala to ‘Digital Hawala’:

  • Hawala is an informal value-transfer mechanism in which money or value can be transferred across borders without conventional banking channels, often relying on trust, brokers and settlement through cash, trade or other transactions.
  • Digital hawala refers to the technology-enabled evolution of informal value-transfer networks using encrypted communication, fintech platforms, virtual assets, AI and digital infrastructure.
  • The FATF identifies six broad forms of digital hawala -
    • Digital coordination, traditional settlement – Encrypted messaging apps, online platforms and shared digital ledgers are used to communicate instructions, recruit couriers and maintain records, while settlement continues through traditional means.
    • Digital customer interface – Mobile wallets and fintech applications provide the customer-facing interface, but operators may still settle balances through cash or trade.
    • Virtual-asset settlement – Stablecoins and other virtual assets can be used to settle balances directly.
    • Integration with formal digital infrastructure – Payment service providers, fintech platforms and virtual IBANs can facilitate movement of funds.
    • AI-enabled operations – AI can support automated transaction structuring, dynamic routing through mule accounts, and rapid fiat-to-cryptocurrency conversion.
    • Hawala applications/ecosystems – Integrated platforms may combine messaging, cloud storage, social media, Virtual Asset Service Providers (VASPs), lending applications and gaming platforms.

Why Digitisation Matters?

  • Digitisation is not necessarily replacing traditional hawala; rather, it is acting as a catalyst for existing settlement mechanisms. Cash remains important at collection and exit points.
  • Technology makes underground financial networks -
    • Faster and more geographically extensive;
    • More opaque and difficult to trace;
    • More resilient against disruption;
    • Less dependent on identifiable interpersonal relationships; and
    • Capable of combining informal finance with formal digital infrastructure.
  • This illustrates the broader Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) challenge created by the convergence of fintech, crypto-assets and informal finance.
    • In this way, legitimate financial innovations can simultaneously create new avenues for illicit finance.

Turkiye Case - Digital Hawala and Terror Financing:

  • Turkiye provides a significant example of the security implications of digital hawala.
  • In 2023, raids targeting an ISIL administrative officer uncovered approximately $57,250 in cash, followed by a further $554,000, along with hawala notebooks and digital transfer receipts.
  • A jeweller and two mobile-phone shops allegedly functioned as fronts, while transactions were disguised as charitable donations.
  • The network reportedly used VASPs; Over-the-Counter (OTC) brokers; mule accounts; jewellers and precious-metals dealers; and digital transfer mechanisms.
  • The case demonstrates how virtual assets, conventional businesses and informal settlement systems can operate together, complicating the detection of terrorist financing.

Professionalisation of Underground Banking:

  • The FATF observes that underground banking is becoming increasingly professionalised and business-like.
  • Networks are developing hierarchical structures; formal management practices; digitised record-keeping; international broker networks; and specialised logistical arrangements.
  • Professional intermediaries such as lawyers, accountants, auditors, notaries and real-estate agents are increasingly being drawn into laundering chains.
  • The Netherlands’ Operation Klaver exposed an underground banking operation that processed around €500 million in criminal proceeds in only eight months, using couriers, counting warehouses, coded ledgers and international brokers.

Challenges:

  • Structural weaknesses:
    • Lack of reliable data on the scale of underground banking;
    • Inconsistent terminology, particularly the varied use of the term “hawala”;
    • Difficulty in cross-border information sharing;
    • Increasing use of virtual assets and digital platforms; and
    • Fragmented enforcement across jurisdictions.
  • For law enforcement:
    • Digitalisation has weakened traditional investigative methods based on tracing personal relationships and physical cash movements.
    • Access-controlled digital platforms can conceal participants and compartmentalise networks.
  • The policy paradox:
    • The FATF also highlights an important unintended consequence: aggressive AML/CFT enforcement and bank de-risking can push legitimate customers away from formal channels and towards informal systems.
    • Therefore, excessively punitive approaches may inadvertently strengthen the very underground networks that authorities seek to dismantle.

Way Forward - FATF Recommendations:

  • Greater use of technology-enabled financial investigation.
    • For example, Indonesia’s Financial Intelligence Unit uses blockchain analytics to trace virtual-asset flows where unlicensed transfer services intersect with crypto-assets.
  • Balancing law-enforcement:
    • The policymakers must avoid excessive de-risking that drives legitimate financial activity into informal channels.
    • The objective should be to expand legitimate access to regulated financial channels while maintaining strong risk-based AML/CFT controls.
  • A comprehensive response: Risk-based regulation, stronger FIU capabilities, blockchain and digital-forensics expertise, cross-border intelligence sharing, regulation of VASPs, improved data collection, etc.
Polity & Governance

Article
08 Sep 2026

Consolidation of Regional Rural Banks – Significance & Concerns

Why in the News?

  • Former RBI Governor C. Rangarajan has criticised the consolidation of Regional Rural Banks as "a step in the wrong direction," warning that the move undermines their local character and could eventually lead to their absorption into universal banks.

What’s in Today’s Article?

  • About RRBs (Background, Ownership, Purpose, Rationale, etc.)
  • News Summary (Key Concerns Raised by C. Rangarajan)

About Regional Rural Banks

  • Regional Rural Banks (RRBs) are scheduled commercial banks established to provide credit and banking services to rural areas, particularly to small and marginal farmers, agricultural labourers, artisans and small entrepreneurs.
  • They were set up under the Regional Rural Banks Act, 1976, following the recommendations of the Narasimham Working Group. The first RRBs were established in 1975.

Ownership Structure

  • RRBs have a three-way ownership pattern:
    • Central Government: 50%
    • Sponsor Bank: 35%
    • State Government: 15%
  • Each RRB is sponsored by a public sector commercial bank, which provides managerial and financial support.
  • RRBs are regulated by the Reserve Bank of India and supervised by NABARD.

Purpose and Rationale

  • The core idea behind RRBs was that their local character would allow credit to be distributed more evenly across rural India.
  • Being rooted in a specific region, these banks were expected to understand local conditions, borrower profiles and credit needs better than large national institutions.
  • They were part of a broader sequence of institutional efforts to extend credit to vulnerable and weaker sections, which included bank nationalisation, priority-sector lending norms, Local Area Banks, Self-Help Groups (SHGs) and, more recently, Small Finance Banks (SFBs).

The Consolidation Process

  • The government has progressively consolidated RRBs since 2005 with the stated objective of improving operational viability and taking advantage of economies of scale.
  • The reduction has occurred in phases:
    • First phase (2005-2010): Number reduced from 196 to 82.
    • Subsequent phases: Further reductions followed.
    • Latest phase - 'One State-One RRB': Number reduced from 43 to 28, effective May 1, 2025.
  • Under the current structure, most states now have a single RRB. In at least one case, the sponsor bank itself absorbed the RRB entirely.

News Summary: Rangarajan's Concerns

  • Former RBI Governor C. Rangarajan raised concerns about both RRB consolidation and the state of small finance banks.
  • On RRB Consolidation
    • Rangarajan questioned what had happened to Regional Rural Banks, noting that mergers had left one RRB per state, with the parent bank absorbing the RRB in one instance.
    • His central argument is that RRBs were originally created precisely because their local character would help distribute credit more evenly. Consolidating them into state-level entities, and potentially into universal banks thereafter, defeats the purpose for which they were established.
  • On Small Finance Banks
    • Rangarajan also urged the RBI to consider ways to incentivise the setting up of small finance banks, arguing that their current numbers are insufficient.
    • There are currently only 11 small finance banks operating in India, which he said would not be enough to meet the unmet credit needs of the sector.
    • He identified a structural disincentive: SFBs are obliged to fulfil the same set of conditions as universal banks. Unless prospective promoters are motivated by other considerations, there is little commercial incentive to establish such institutions.
  • On Self-Help Groups
    • Rangarajan also expressed concern about the drift in the functioning of Self-Help Groups.
    • SHGs were conceived as a model in which people come together to produce or manage something collectively.
    • "Now, virtually what has happened is that the SHGs have become mere instruments for fulfilling some of the government projects," he observed, describing this as counter to the spirit in which they were established.

The Broader Argument

  • Rangarajan situated these observations within a wider pattern in Indian financial policy.
  • India's response to gaps in credit delivery has repeatedly been to create new institutions. "Whenever we felt that something was not happening, we said, 'We will create a new institution,'" he noted.
  • But he cautioned that institutional creation alone does not resolve underlying problems. "Creating an institution by itself is not the answer, because institutions can come and still the problems will continue."

Arguments For and Against the Consolidation of RRBs

  • The Case for Consolidation
    • The government's rationale rests on operational viability.
    • Many RRBs were small, financially weak, and struggled with capital adequacy and technology adoption. Larger entities can:
      • Achieve economies of scale in operations and technology
      • Maintain stronger capital positions
      • Offer a wider range of products
      • Reduce administrative and compliance costs
  • The Case Against
    • The counter-argument is that RRBs were never designed to be commercially optimal institutions. Their purpose was developmental, not purely financial.
    • Concerns include:
      • Loss of local knowledge as decision-making moves further from the ground.
      • Reduced regional focus when a single entity covers an entire state.
      • Risk of eventual absorption into universal banks, ending the RRB model altogether.
      • Weakening of the last-mile credit channel for small and marginal borrowers.

Significance

  • Rural credit remains a persistent challenge in India. Small and marginal farmers, landless labourers and rural micro-enterprises often fall outside the reach of commercial banking, leaving them dependent on informal lenders.
  • The institutional architecture built over five decades- RRBs, cooperative banks, SHGs, microfinance institutions and SFBs- was designed to close this gap.
  • If consolidation dilutes the local character of RRBs without a corresponding expansion of SFBs or other last-mile institutions, the credit gap may widen rather than narrow.
Economics

Article
08 Sep 2026

U.S. Tariffs Are Not What is Holding Back Indian Research

Context

  • India’s trade relations with the United States have repeatedly faced tariff tensions, raising concerns about their impact on exports, manufacturing and innovation.
  • Recent tariff concessions provided relief to Indian exporters, with pharmaceuticals and several electronics products remaining exempt.
  • However, the larger concern is whether high U.S. tariffs are weakening India’s research and innovation capacity.
  • The evidence suggests otherwise. The deeper problem is that India’s tariff-exposed manufacturing sectors have historically invested very little in R&D.

The Reality: Tariffs Are Not the Main Cause of India’s Research Weakness

  • The industries most affected by U.S. tariffs include organic chemicals, plastics, base metals, machinery, auto components and leather.
  • Yet these sectors have traditionally maintained weak research programmes.
  • Indian metals companies spend only about 0.4% of sales on R&D, compared with nearly 1.6% globally.
  • Automobile and component manufacturers spend slightly above 2%, against around 5% globally, while electrical equipment firms spend less than 2%.
  • Thus, India’s trade-exposed sectors and research-intensive sectors barely overlap.
  • Research expenditure is concentrated mainly in pharmaceuticals and automobiles, while most other manufacturing industries conduct limited research.
  • Tariffs on steel, chemicals or plastics therefore cannot significantly reduce research spending that was already minimal.
  • Patent activity and R&D spending also show no clear break attributable to the tariff years. These sectors had followed a low-research trajectory well before the recent trade tensions.
  • Tariffs are therefore more a symptom of strained trade relations than the root cause of India’s innovation deficit.

Where Tariffs Actually Matter?

  • The tariff issue becomes more significant in sectors that combine substantial research activity with trade exposure.
  • Automobiles are particularly vulnerable, while pharmaceuticals received protection under the recent agreement.
  • The 25% U.S. duty on auto parts remains a concern, while metal tariffs increase input costs for engineering and component manufacturers.
  • Higher costs and restricted market access could discourage firms from undertaking risky, long-term research.
  • Therefore, the genuine research-related tariff risk is concentrated in automobiles, rather than across the entire Indian manufacturing economy.

The Deeper Problem: India’s Chronic R&D Deficit

  • India’s research weakness predates the current tariff dispute.
  • National R&D expenditure remains low compared with major competing economies, and the private sector contributes far less than firms in leading innovation-driven countries.
  • Corporate spending often supports routine development and testing rather than breakthrough research.
  • The comparison with companies such as Nvidia illustrates the scale of the gap: a single major technology company can spend almost as much on research as India’s entire corporate sector.
  • The challenge is therefore not simply insufficient funding but also weak private-sector research capacity, limited incentives and inadequate technological ambition.

The ₹1 Lakh Crore Opportunity

  • The government’s ₹1 lakh crore Research, Development and Innovation scheme seeks to provide long-term, low-cost capital for areas such as artificial intelligence, semiconductors, quantum technology and biotechnology.
  • This investment is important for India’s technological ambitions.
  • However, the scheme largely targets frontier and sunrise sectors, whereas many tariff-exposed industries belong to traditional manufacturing.
  • Chemicals, metals, engineering and auto-component companies also need technological upgrading.
  • India therefore requires an innovation strategy that connects traditional manufacturing with research and higher-value production.

Turning Trade Pressure into an Innovation Opportunity

  • Tariff pressure can become a catalyst for industrial transformation. Instead of merely protecting vulnerable industries, India should encourage firms to develop differentiated, higher-value products that are difficult to substitute or undercut.
  • Government incentives should favour genuine R&D over routine testing and target tariff-exposed sectors.
  • Assistance to downstream engineering firms facing higher metal costs could be linked to continued research investment.
  • Similarly, pharmaceuticals and automobiles deserve special attention in future trade negotiations because disruptions in these sectors could affect both exports and innovation.
  • Protection without reform merely preserves low-value production. Government support should instead be conditional on measurable improvements in research and technological capability.

Measuring Research Better

  • Effective innovation policy requires reliable data.
  • India’s official R&D statistics are often delayed and underestimate private-sector research spending. Policymakers cannot effectively direct resources without knowing where research is occurring.
  • A faster firm-level system linking R&D expenditure with exports, patents and productivity would help identify vulnerable industries and measure the effectiveness of government support.
  • Better measurement would allow India to move from broad R&D spending towards targeted, evidence-based innovation policy.

Conclusion

  • The U.S. tariff dispute is not the principal cause of India’s research weakness.
  • The fundamental problem is structural: many export-oriented industries invest too little in R&D and remain concentrated in low-value production.
  • The tariff truce offers India valuable breathing space to strengthen its innovation ecosystem. Support for traditional industries should be linked to research, technological upgrading and product differentiation, while frontier sectors should continue receiving strategic investment.
  • India’s manufacturing resilience will ultimately depend not on permanently protecting existing products, but on creating superior products that compete through technology, quality and intellectual property.

 

Editorial Analysis

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Current Affairs
Sept. 7, 2026

Key Facts about Vitamin B6
Vitamin B6 poisoning is extremely rare, but cases have increased by about 40% in the last decade, according to reports from America’s Poison Centers.
current affairs image

About Vitamin B6:

  • Vitamin B-6 (pyridoxine) is a water-soluble vitamin.
    • Water-soluble vitamins dissolve in water so the body cannot store them.
  • It is found naturally in many foods, as well as added to foods and supplements.
  • It is important for normal brain development and for keeping the nervous system and immune system healthy.
  • It helps the body to:
    • Make antibodies. Antibodies are needed to fight many viruses, infections, and other diseases.
    • Maintain normal nerve function.
    • Make hemoglobin: Hemoglobin carries oxygen in the red blood cells to the tissues. A vitamin B6 deficiency can cause a form of anemia.
    • Break down proteins: The more protein you eat, the more vitamin B6 you need.
    • Keep blood sugar (glucose) in normal ranges.
  • Food sources of vitamin B-6 include poultry, fish, potatoes, chickpeas, bananas, and fortified cereals.
  • Vitamin B-6 can also be taken as a supplement, typically as an oral capsule, tablet, or liquid.
  • People who have kidney disease or conditions that prevent the small intestine from absorbing nutrients from foods (malabsorption syndromes) are more likely to be vitamin B-6 deficient.
  • Certain autoimmune disorders, some epilepsy medications and alcohol dependence also can lead to vitamin B-6 deficiency.
  • This can cause a condition in which you don't have enough healthy red blood cells to carry adequate oxygen to your body's tissues.
  • Deficiency of this vitamin can cause:
    • Confusion
    • Depression
    • Irritability
    • Mouth and tongue sores, also known as glossitis
    • Peripheral neuropathy
  • Large doses of vitamin B6 can cause:
    • Difficulty coordinating movement
    • Numbness
    • Sensory changes
Science & Tech

Current Affairs
Sept. 7, 2026

What is the LORA Missile?
Germany successfully tested the LORA missile in the North Atlantic overnight, military officials said recently.
current affairs image

About LORA Missile:

  • The LORA (Long Range Artillery) is a short-range, road-mobile, ground- and sea-launched ballistic missile developed and operated by Israel.
  • It is believed to have entered service in Israel in 2007.
  • It is designed to strike high-value targets deep inside enemy territory.
  • Features:
    • It is a single-stage, solid-propellant
    • It can carry a payload of up to 600 kg and can deploy a single high explosive (HE) warhead or sub munitions.
    • It has a range of 280 km.
    • It uses Inertial Navigation System/Global Positioning System and TV for terminal guidance, with possible in-flight maneuvering capability.
Science & Tech

Current Affairs
Sept. 7, 2026

Corded Ware Culture
Archaeologists near Wrocław, Poland, recently discovered a 42-tooth necklace with an adult male skeleton, stone weapons and human skull remains, offering new insights into the Corded Ware culture.
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About Corded Ware Culture:

  • The Corded Ware culture was a large group of ancient people who lived across Europe between about 3000 BC and 2350 BC.
  • This time period covers the end of the Stone Age, the Copper Age, and the beginning of the Bronze Age.
  • These people lived in a huge area, stretching from the Rhine River in the west to the Volga River in the east. This included parts of Northern, Central, and Eastern Europe.
  • Archaeologists have noticed that the Corded Ware culture wasn't just one single group.
  • People in different parts of this huge area had different ways of living and getting food.
  • Scientists believe that the Corded Ware culture might have started when people from the Yamnaya culture, who lived in the steppes (large grasslands) of Eastern Europe, moved west. They mixed with the local groups already living there.
  • Many experts think the Corded Ware culture played a big role in spreading the Indo-European languages across Europe and Asia. These are the languages that most people in Europe and parts of Asia speak today.
  • The name ‘Corded Ware culture’ comes from the special way these people decorated their pottery.
    • They used twisted cords to press patterns into wet clay. This made unique designs that looked like ropes or cords.
    • A German archaeologist named Friedrich Klopfleisch first used this name in 1883.
  • Archaeologists have found very few settlements of the Corded Ware culture. This led to the idea that they were mostly nomadic herders, like the Yamnaya culture.
  • However, some evidence shows they also did some farming. Traces of wheat and barley have been found at a Corded Ware site in Poland.
  • They also used wheeled vehicles, probably pulled by oxen, continuing a practice from earlier cultures.
  • Other names for groups within this culture include the Single Grave culture. This name comes from their burial custom of burying people alone under small mounds.
  • The Battle Axe culture, or Boat Axe culture, is another name. It refers to the stone axes shaped like boats often found in men's graves.
  • The Bell Beaker culture lived in the western part of Europe at the same time.
    • They shared some ideas with the Corded Ware people.
    • But the Bell Beaker people were better at trading by sea and rivers, which helped them develop new things.
History & Culture

Current Affairs
Sept. 7, 2026

What is the Hall Effect?
Scientists recently discovered an unexpected form of the Hall effect, overturning the long-held assumption that this electrical response only appears when a magnetic field points perpendicular to a material.
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About Hall Effect:

  • It is named after American physicist Edwin H. Hall, who first introduced the theory to the world in 1879.
  • Hall discovered that when a conductor or semiconductor with current flowing in one direction was introduced to a perpendicular magnetic field, a voltage could be measured at right angles to the current path; this measurable voltage is the Hall Effect.
  • How does it work?
    • It takes place when current flowing through a conductor, which is a material such as copper or silver permits electrons to flow freely across the entire surface area.
    • The electrons begin to flow in a straight line from one side of the conductor to the other.
    • If a magnetic field near the conductor is introduced, it would disturb the flow of the electrons due to the force applied.
    • This is called Lorentz force, which is the force on a charged particle due to electric and magnetic fields.
    • The magnet’s north pole pulls the negative electrons to one side of the conductor and deflects the positive electrons to the other side of the conductor.
    • If a voltage tester is put between the two sides, a voltage reading will be given because there is current between the positive and negative electrons; by retrieving this measurable voltage, the Hall Effect principle is put into practice.
    • In a semiconductor such as silicon or germanium, the drift velocity of electrons is a lot quicker due to the material used.
    • This results in a stronger Hall effect which corresponds to a larger voltage reading being detected and therefore a more precise reading being taken.
    • The Hall effect is used in several different products, such as sensors, joysticks, and switches.
  • A Hall effect sensor is a device to measure the magnitude of a magnetic field.
    • Its output voltage is directly proportional to the magnetic field strength through it.
    • Hall effect sensors are used for proximity sensing, positioning, speed detection, and current sensing applications.

Recent Findings:

  • For a long time, people thought the Hall effect only worked when the magnetic field was applied perpendicular to the plane of the film.
  • The recent findings show that a Hall response tied to magnetization can occur in more than one direction.
  • That gives physicists a new way to investigate multidimensional magnetic and topological structures in condensed matter systems.
Science & Tech
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