Latest news with #SchemetoPromoteManufacturingofElectricPassengerCars
Time of India
02-08-2025
- Automotive
- Time of India
Currently not looking at getting benefits of EV promotion scheme: Volvo Car India MD
Swedish luxury carmaker Volvo is currently not looking at availing of benefits under India's scheme to promote passenger electric vehicles due to existing scale of the industry and will consider bringing plug-in hybrid vehicles in the country if the tax structure is conducive, a top official of its Indian arm said on Friday. Volvo Car India , which launched the refreshed version of its best selling model XC60 in India at an introductory price of ₹71.9 lakh, believes that the entry of new players like Tesla is good for popularising electric vehicles. "We believe right now, with the current scale of our industry, CKD (completely knocked down) offers the best solution. That is what we already have, and we'll continue to do that. As more benefits are seen and we anticipate bigger scale then we can evaluate others," Volvo Car India Managing Director Jyoti Malhotra told PTI. He was responding to a query on whether Volvo Car India is looking to avail of the benefits under the government's Scheme to Promote Manufacturing of Electric Passenger Cars in India. Under the scheme companies are allowed to import up to 8,000 electric four-wheeler units annually at a lower import duty of 15 per cent, against 70-100 per cent currently, provided they commit an investment of ₹4,150 crore for setting up local manufacturing facilities. Malhotra said there are various factors before taking "a call, and one of them is also the scale", adding "we have so many benefits available in India. There are different ways we can make cars in India or import cars in India." When asked about the increase in competition with the entry of the likes of Tesla in India, he said,"I would say we are not looking at anybody as a competitor. They are all different car makers, they are colleagues, they are all welcome to come. I think India needs more, the more the merrier." Asserting that Indian customers need choice, Malhotra said,"We are a huge country. One good thing I can say is that in the last 6-7 months we have seen a lot of interest in electric cars, we have seen a lot of interest in new generation cars and I think it is good... So the entry (of Tesla) is good for the customers." On Volvo Car India's sales growth of EVs, he said,"Within our own portfolio, almost one in four cars, roughly 25 per cent that we sell are electric cars, which is really very will be bringing another electric car, EX30 later this year." The company currently sells two EV models -- EC40 and EX40 -- in India. On the rare earth magnet shortage, Malhotra said,"We are doing assembly. We get our kits from other plants, so we are not directly impacted." On the refreshed XC60, he said it is being assembled at the company's Bengaluru facility along with other models that the company sells in India, he noted. When asked if the company would consider the plug-in hybrid version of the model, he told reporters, "We have a range of mild hybrids and plug-in hybrids... Those are the range that we have in this car (XC60) global portfolio has it but the Indian tax structure is not really conducive as of today." He further noted,"If things change, we can always bring it. So we are keeping a close watch." Under the current regulations hybrid passenger vehicles of length of up to 4 metre and up to 1200 cc petrol engine and up to 1500 cc diesel engine attract 28 per cent GST. On the other hand hybrid passenger vehicles of length above 4 metre or above 1200 cc petrol engine and above 1500 cc diesel engine are taxed at 28 GST with 15 per cent additional cess. "The mild hybrid that we have on offer today with the current (tax) structures that we have in India, I think this is best suited because we can offer the best value to our customers," Malhotra said, adding "but if things change, you can always bring it". On the company's sales growth prospects, he said Volvo Car India is looking at a flattish growth this year as it is in a transition from old platforms to newer ones.
Mint
01-08-2025
- Automotive
- Mint
Currently not looking at getting benefits of EV promotion scheme: Volvo Car India MD
New Delhi, Aug 1 (PTI) Swedish luxury carmaker Volvo is currently not looking at availing of benefits under India's scheme to promote passenger electric vehicles due to existing scale of the industry and will consider bringing plug-in hybrid vehicles in the country if the tax structure is conducive, a top official of its Indian arm said on Friday. Volvo Car India, which launched the refreshed version of its best selling model XC60 in India at an introductory price of ₹ 71.9 lakh, believes that the entry of new players like Tesla is good for popularising electric vehicles. "We believe right now, with the current scale of our industry, CKD (completely knocked down) offers the best solution. That is what we already have, and we'll continue to do that. As more benefits are seen and we anticipate bigger scale then we can evaluate others," Volvo Car India Managing Director Jyoti Malhotra told PTI. He was responding to a query on whether Volvo Car India is looking to avail of the benefits under the government's Scheme to Promote Manufacturing of Electric Passenger Cars in India. Under the scheme companies are allowed to import up to 8,000 electric four-wheeler units annually at a lower import duty of 15 per cent, against 70-100 per cent currently, provided they commit an investment of ₹ 4,150 crore for setting up local manufacturing facilities. Malhotra said there are various factors before taking "a call, and one of them is also the scale", adding "we have so many benefits available in India. There are different ways we can make cars in India or import cars in India." When asked about the increase in competition with the entry of the likes of Tesla in India, he said,"I would say we are not looking at anybody as a competitor. They are all different car makers, they are colleagues, they are all welcome to come. I think India needs more, the more the merrier." Asserting that Indian customers need choice, Malhotra said,"We are a huge country. One good thing I can say is that in the last 6-7 months we have seen a lot of interest in electric cars, we have seen a lot of interest in new generation cars and I think it is good... So the entry (of Tesla) is good for the customers." On Volvo Car India's sales growth of EVs, he said,"Within our own portfolio, almost one in four cars, roughly 25 per cent that we sell are electric cars, which is really very will be bringing another electric car, EX30 later this year." The company currently sells two EV models -- EC40 and EX40 -- in India. On the rare earth magnet shortage, Malhotra said,"We are doing assembly. We get our kits from other plants, so we are not directly impacted." On the refreshed XC60, he said it is being assembled at the company's Bengaluru facility along with other models that the company sells in India, he noted. When asked if the company would consider the plug-in hybrid version of the model, he told reporters,"We have a range of mild hybrids and plug-in hybrids... Those are the range that we have in this car (XC60) global portfolio has it but the Indian tax structure is not really conducive as of today." He further noted,"If things change, we can always bring it. So we are keeping a close watch." Under the current regulations hybrid passenger vehicles of length of up to 4 metre and up to 1200 cc petrol engine and up to 1500 cc diesel engine attract 28 per cent GST. On the other hand hybrid passenger vehicles of length above 4 metre or above 1200 cc petrol engine and above 1500 cc diesel engine are taxed at 28 GST with 15 per cent additional cess. "The mild hybrid that we have on offer today with the current (tax) structures that we have in India, I think this is best suited because we can offer the best value to our customers," Malhotra said, adding "but if things change, you can always bring it". On the company's sales growth prospects, he said Volvo Car India is looking at a flattish growth this year as it is in a transition from old platforms to newer ones.
The Hindu
08-06-2025
- Automotive
- The Hindu
What is India's latest approach to localising EV manufacturing?
The story so far More than a year since it was announced, the Ministry of Heavy Industries Monday notified guidelines of the Scheme to Promote Manufacturing of Electric Passenger Cars in India. The scheme reduces existing duties on import of vehicles for overseas manufacturers from the present 70-100% to 15% subject to the maker meeting minimum requirements for investment and setting up facilities in the country. However, Union Minister H.D. Kumaraswamy indicating luxury EV maker Tesla's unwillingness to manufacture in India have prompted concerns about the promise of the scheme. Also Read | Centre notifies guidelines to boost electric car production What does the policy propose? At the centre of the notified policy is the provision to reduce customs duty on the import of ready-to-ship completely assembled electric four-wheelers to 15%. This would apply to all vehicles valued at $35,000 - circumscribing cost, insurance and freight (CIF) - for a period of five years. However, this would be subject to the manufacturer investing a minimum of ₹4,150 crore over the next three years. They would also be expected to build infrastructure and facilities to enable 25% of the overall manufacturing activity be undertaken domestically (domestic value addition, or DVA) within three years, and 50% within five years. MHI specifies that a maximum of 8,000 vehicles can be imported at the reduced duty rate in a year with no carrying over of unutilised limits. The maximum duty permitted to be foregone under the scheme has been capped at ₹6,484 crore. Broadly, the objective of the overall scheme is to find a midway point where affordability for a captive market is attained, whilst also recognising that import substitution would require a layered approach and a protracted timeline. MHI calculated that an imported vehicle valued at $35,000 (₹29.75 lakh) would now be liable to pay basic customs duty of ₹4.6 lakh at the reduced 15% rate compared to ₹20.8 lakhs at the erstwhile 70% rate. Therefore, combining with IGST levied at 5% on the resulting value, the total foregone duty amount to ₹17.2 lakh with the final landing cost coming to about ₹36 lakh. Now, in line with an initial investment of ₹4,150 crore and a foregone duty of ₹17.2 lakh for each vehicle, the maker would be allowed to import 24,155 units in total. EDITORIAL | Falling short: On India's EV journey But does this help our overall ecosystem? Shouvik Chakraborty, Assistant Research Professor at the Political Economy Research Institute at the University of Massachusetts Amherst (U.S.) argues that a domestic industrial policy aligned with a vision for future could be a step in the right direction. Although he holds the current policy would bode well for India only if there is sharing of technology with domestic automakers. Further, he observes, 'Countries these days are extremely cautious about transferring technology outside (to maintain their competitive advantage). In that light, India must not become a domestic hub for producing components of a vehicle.' Dinesh Abrol, adjunct faculty at the Transdisciplinary Research Cluster on Sustainable Studies at JNU in Delhi, observes that no foreign firm has ever helped build some other country's ecosystem. He attributed China and South Korea's ability to build manufacturing setups to their focus on skilling, research and development alongside undertaking innovation projects. 'This enabled conditions for a technology transfer and prompting companies to come and invest into the ecosystem,' he states. Essential to note, China as the leading manufacturer of EVs accounted for 70% of the global manufacturing in 2024. The other set of concerns relate to the potentially increased focus on four-wheeler EVs, and their probable impact on India's ambitions to achieve Net Zero by 2070. According to data compiled by the Federation of Automobile Dealers Association (FADA), EVs accounted for 7.8% of all vehicles sold in FY 2025. This was predominantly led by electric three-wheelers (at 57% in its category), followed by two-wheelers (6.1%), passenger vehicles (2.6%) and commercial vehicles (0.9%). Significantly, the International Energy Association (IEA) identified India as the world's largest market for electric three-wheelers in 2024. Sales grew about 20% YoY, it observed. Mr. Chakraborty emphasises that most Indians travel by public transport, and policies must also focus on building the same. 'Means of last mile connectivity, as bikes and shuttles, is also very important. It is not of much help if one has to walk few kilometres to avail public transport. This is not how we can fight climate change' he states. The final set of concerns relate to input costs. S&P Global Mobility observed in an analysis published March this year that high initial costs, typically 20-30% higher than ICE counterparts, coupled with India's reliance on imported components and batteries 'hinder' the growth of the EV sector. It held notwithstanding government efforts to promote localisation through varied policies, the rate was 'not increasing as expected'. DATA | Union Budget 2025: Allocation for electric mobility schemes rise by 20% What about our industrial ambitions in the EV space? Other than the impact on the ecosystem, concerns in the realm extend to costs and competitiveness. Reuters had reported in December 2023 about Tata Motors opposing Tesla's proposal to lower import duties. It had argued, according to the report, lowering duties would 'vitiate' the investment climate which was premised around expectations of the tax regime favouring locals remaining unchanged. The automaker had further held that India's EV players required more government support in the early growth stage of the industry. According to IEA's EV Outlook, domestic OEMs accounted for more than 80% of the electric cars produced domestically in 2024. Additionally, it attributed a less than 15% share of Chinese imports in the country's EV sales in 2024 to high import duties on EVs and the availability of locally made, affordable electric models. Thus, the lowering of duties prompt concerns about the potential impact (though not potentially from China) on domestic industries. According to Mr. Abrol, the policy is premised around foreign-capital and is export-focussed. He suggested the policy should instead be oriented toward building local ecosystem and spurring research and development alongside innovation. Mr. Abrol holds the lack of availability of skilled persons is due to the missing contribution of the public sector. Mr. Chakraborty further states, by nature western technologies in general are more capital-intensive than those in labour-intensive economies. 'Even if it is export-oriented, it will create jobs in an area,' he states, adding, 'However, the overall context needs to be considered in terms of how many jobs it is displacing, this is also considering that EVs have less conventional parts than a gasoline-powered vehicle.'
Indian Express
06-06-2025
- Automotive
- Indian Express
Amid Trump-Musk fallout, will Tesla's India story run out of charge before it begins?
After throwing his social and economic weight behind Donald Trump during his Presidential bid and quickly establishing himself as one of the most important people in his administration responsible for optimising government spending, Elon Musk and the US President are now in the middle of a messy and nasty divorce. The spectacular, and very public, break in their relationship has put the spotlight squarely on Musk's companies' expansion plans, since many had predicted that with Trump on his side, the billionaire stood to benefit economically across multiple regions globally. Many saw that cutting Musk's companies a favourable deal could be used as a potential ploy by foreign governments to placate Trump, who has wreaked havoc over the global trading ecosystem. Now though, there are question marks. Case in point is one of Musk's most successful endeavours, his electric mobility giant Tesla. In India, the company has flip-flopped on whether it will manufacture in the country, but had been moving to set up retail operations. But the feud between Trump and Musk has had a significant bearing on Tesla. Since the two have had a fallout, the company's stock has taken a beating, falling close to 15%, and erasing around $150 billion in market value. With electric vehicle sales tempering globally and the emergence of rivals like China's BYD, Tesla's dominance in the sector was already under attack. And now, without the most influential American's political backing behind its founder gone, Tesla's expansion plans could take a back seat, or at least face some turbulence. What adds to the misery is not just Trump publicly admonishing Musk publicly, and vice versa, but also that the US President has suggested he could terminate government contracts and subsidies given to Musk's companies. Earlier this week, Union Heavy Industries Minister H D Kumaraswamy said that Tesla was not interested in manufacturing in India, but was looking to open retail showrooms in the country. He added that global EV makers like Mercedes-Benz, Volkswagen-Škoda, Hyundai and Kia have shown interest in applying under the ministry's flagship Scheme to Promote Manufacturing of Electric Passenger Cars in India, notified in March last year. An auto industry executive noted that with its stock taking a beating, and a reconciliation between Musk and Trump seeming unlikely, the company could find it difficult to tell its investors why it was pursuing setting shop in a market like India, where its vehicles may not garner mass appeal due to their high cost and India's relatively nascent EV market and infrastructure. For long, India and Tesla have had a 'will they, won't they' dynamic to their relationship, which New Delhi had set to change, by making substantial policy manoeuvres to attract the EV major to its shores. Earlier, many believed the government's EV manufacturing scheme was envisaged to attract Tesla to manufacture in India, after it complained of high duties on car imports, which can go up to 110 per cent. It is worth noting that Trump was not impressed by Tesla's India plans. In February, he had criticised Tesla's plan to expand in India, calling it 'unfair' to the US. 'Now, if (Tesla CEO Elon Musk) built the factory in India, that's okay, but that's unfair to us. It's very unfair,' he had said. Trump has since made similar objections to Apple's expansion plans in India. Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More
Indian Express
03-06-2025
- Business
- Indian Express
UPSC Key: Pandit Deendayal Upadhyay, Instruments of Monetary Policy and India's EV policy
Important topics and their relevance in UPSC CSE exam for June 3, 2025. If you missed the June 2, 2025 UPSC CSE exam key from the Indian Express, read it here FRONT PAGE Minister: Tesla not keen to manufacture in India Syllabus: Preliminary Examination: Current events of national and international importance. Main Examination: General Studies II: Effect of policies and politics of developed and developing countries on India's interests What's the ongoing story: Electric Vehicle (EV) major Tesla is not interested in manufacturing in India but is looking at opening two stores, Union Heavy Industries Minister H D Kumaraswamy said on Monday. Key Points to Ponder: • India's new EV policy-know in detail • What is Tesla's current plan regarding its presence in India? • Discuss the implications of Tesla's decision not to manufacture in India on the country's 'Make in India' initiative and its goals for the electric vehicle sector. • Know the potential reasons behind Tesla's reluctance to set up manufacturing facilities in India despite favourable government policies. • How does the response of companies like Mercedes-Benz and Skoda-Volkswagen to India's EV policy contrast with Tesla's approach? Key Takeaways: • He, however, said that global EV makers like Mercedes-Benz, Volkswagen-Škoda, Hyundai and Kia have shown interest in applying under the ministry's flagship Scheme to Promote Manufacturing of Electric Passenger Cars in India, notified in March last year. • 'Mercedes-Benz, Volkswagen-Škoda, Hyundai and Kia — all these companies have already shown interest. Tesla, we are actually not expecting from them. They (Tesla) are going to start two showrooms, they are not interested in manufacturing in India,' Kumaraswamy said at a media briefing. • In February, US President Donald Trump had criticised Tesla's plan to expand in India, calling it 'unfair' to the US. 'Now, if (Tesla CEO Elon Musk) built the factory in India, that's okay, but that's unfair to us. It's very unfair,' he had said. Trump has since made similar objections to Apple's expansion plans in India. • The heavy industries ministry also issued detailed guidelines on Monday under the EV manufacturing scheme, and will soon issue a notice inviting online applications. Under the scheme, approved applicants will be required to make a minimum investment of Rs 4,150 crore to produce EVs domestically, with defined domestic value addition (DVA) goals. • In turn, they will be eligible to import a maximum of 8,000 completely built-in units (CBU) of electric four-wheelers per year, with a minimum import value of $35,000 at a reduced Customs duty of 15 per cent for a five-year period. The scheme is limited to global manufacturers with a revenue of at least Rs 10,000 crore per year, with fixed assets valued at a minimum of Rs 3,000 crore. Do You Know: • Shortly after the scheme was announced in March 2024, in the run-up to the Lok Sabha polls, Musk was expected to visit India and make a pledge to pump over $2 billion into a car manufacturing facility in the country. However, the visit was postponed after Musk cited 'very heavy Tesla obligations'. But, a few days after cancelling his India trip, Musk visited China — the company's second-largest market. • In February this year, days after Prime Minister Narendra Modi met Musk in Washington, Tesla announced 13 job openings in India, including store manager, service advisor, business operations analyst, and customer engagement manager. • Meanwhile, according to think tank Global Trade Research Initiative (GTRI), it could take years before the first batch of EVs manufactured under the Centre's scheme hit the market. 'While announcement of the scheme guidelines is a positive step, the application process has not opened yet and is expected soon. Realistically, it may take another six months or more before selected firms are announced, and the first locally made EVs under this scheme are still some time away; for now, approved firms can keep importing fully built cars at the reduced 15% duty,' GTRI said in a release. Other Important Articles Covering the same topic: 📍Tesla unlikely to manufacture in India: Heavy Industries Minister Countdown to space mission: Seat for Shukla is big moment for India Syllabus: Preliminary Examination: Current events of national and international importance. Mains Examination: General Studies III: Awareness in the fields of IT, Space, Computers, robotics, nanotechnology, bio-technology and issues relating to intellectual property rights. What's the ongoing story: The four-member crew also has astronauts from Poland and Hungary – countries that, like India, are sending their nationals to space after 40 years — underlining the very diverse nature of participation in this mission. Key Points to Ponder: • Axiom Mission 4-know in detail • What is the Axiom-4 mission primarily known for? • Why is the inclusion of an Indian on Axiom-4 considered a significant development? • Discuss the significance of India's human spaceflight program (Gaganyaan) in the context of global space diplomacy and international collaboration. • Gaganyaan Mission-Know the key features • Gaganyaan Mission-What makes this Mission very Unique? • India's Manned Mission to Space-Know in detail • Indian Space Research Organisation (ISRO)-About the Organisation • Know the role of the Indian Air Force (IAF) in India's space missions. • How does the experience of IAF officers contribute to space exploration? • Evaluate the role of international partnerships in India's human spaceflight program. • How do collaborations with countries like Russia, USA, and France enhance ISRO's capabilities? • What are the challenges India faces in establishing a long-term human spaceflight program? Key Takeaways: • Four decades after Rakesh Sharma became the first Indian to travel to space, Shubhanshu Shulka, a 39-year-old Indian Air Force officer who is in the final leg of his pre-launch quarantine at the Kennedy Space Centre in Florida, will on Sunday, June 8, pilot a Dragon spacecraft that will take him, and three others, to the International Space Station (ISS), about 400 km from the Earth. • Shukla, who is set to be the first Indian to step on to the ISS, will spend two weeks carrying out various experiments and studies in space. • Though India or the Indian Space Research Organisation (ISRO) has had little role to play in the planning and execution of the mission — apart from securing a seat for an Indian on the spacecraft — Shukla's journey couldn't have come at a better time for the country's space programme as it prepares for Gaganyaan, India's own human spaceflight. Do You Know: • The Dragon spacecraft, as well as the Falcon 9 rocket that will launch it into space, are built by Elon Musk-owned SpaceX, one of the biggest private space companies in the world. The mission is being operated and managed by Axiom Space, a nine-year-old private entity focused on commercial spaceflight services. The US space agency NASA is facilitating this mission as part of its broader initiative to encourage private operators to participate in commercial space transportation activities in Lower Earth Orbits. • The four-member crew also has astronauts from Poland and Hungary – countries that, like India, are sending their nationals to space after 40 years — underlining the very diverse nature of participation in this mission. • Shukla's space journey was not planned like this. He was selected and trained for Gaganyaan, India's maiden human spaceflight mission that was originally scheduled for 2022 but is now expected to happen in early 2027. In the meanwhile, in 2023, NASA and ISRO agreed to develop a 'strategic framework for human spaceflight cooperation', its immediate result being the inclusion of Indian astronauts in the Axiom-4 mission. • ISRO has designed about 10 experiments for this mission. These include investigations into the effects of microgravity on muscle dysfunctions, and the physical and cognitive impacts of utilising computer screens in space. Another experiment would study the impact of spaceflight on the growth of six varieties of crop seeds. ISRO is also sending a few tardigrades to the ISS. These microscopic, water-dwelling organisms, also called water bears or moss piglets, are known to survive in extremely harsh environments. They are often studied in space to gain a better understanding of how life can survive in extra-terrestrial conditions. • Along with his two Soviet colleagues on the mission, Sharma carried out several space experiments during his flight. These resulted in ISRO getting access to important and novel data, though the space agency had little utility for them at that time. In 1984, India did not even have a decent rocket of its own. The only one it had, SLV-3, could barely carry 30-40 kg to Lower Earth Orbits. India's important satellites, like those of the INSAT series, were being launched from the United States. Other Important Articles Covering the same topic: 📍 Axiom-4 mission will give key inputs for Gaganyaan GOVT & POLITICS India, Paraguay vow to boost ties; united against terror: PM Syllabus: Preliminary Examination: Current events of national and international importance. Main Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests. What's the ongoing story: Hosting the first foreign head of state since Operation Sindoor, Prime Minister Narendra Modi told the visiting President of Paraguay, Santiago Peña Palacios, that the two countries are 'united in the fight against terrorism' and there is immense possibility of cooperation to fight against 'shared challenges' such as cybercrime, organised crime, and drug trafficking. Key Points to Ponder: • What is the relationship between India and Paraguay? • India-MERCOSUR—know in detail • Map Work-MERCOSUR Countries • What are the strategic implications of India- Paraguay cooperation? • What are the key challenges in strengthening India- Paraguay trade and investment relations? • Examine the role of regional trade blocs like MERCOSUR in facilitating India's trade with Paraguay. Key Takeaways: • Welcoming President Peña at delegation-level talks, Modi said the Paraguayan leader's first visit to Delhi will add new strength to the pillars of trust, trade, and close cooperation in the relations and will also add new dimensions to India-Latin America relations. • Peña, who arrived in Delhi Monday, is on a three-day visit to India to explore ways to expand overall cooperation. It is his first visit to India and only the second trip by a president of the South American country. • 'India and Paraguay stand united in the fight against terrorism. There is immense possibility of cooperation to fight against shared challenges such as cybercrime, organised crime, and drug trafficking,' Modi said, describing the two countries as integral parts of Global South with similar 'hopes, aspirations, challenges.' • Briefing reporters, P Kumaran, Secretary (East) in the Ministry of External Affairs, said: 'This visit comes soon after the barbaric terrorist attack in Pahalgam, J&K. PM Modi expressed his deep appreciation to Paraguay for its strong condemnation of the terrorist attack in Pahalgam, as well as for the sincere condolences and solidarity expressed with the people and the Government of India… On behalf of the Paraguayan people, President Peña expressed his deep solidarity with the victims and families of the terrorist attack.' • The PM also referred to New Delhi's preferential trade arrangement with South American trading bloc MERCOSUR, comprising Argentina, Brazil, Paraguay and Uruguay. 'We can work together to further expand it,' the PM said. • On defence cooperation, Kumaran said while Paraguay's priorities are different to those of India, the 'logic driving their acquisition of defence hardware' is mainly law enforcement. • He said one of the points discussed in the talks was 'AgriStack'. 'As a large agricultural country, the use of digital platforms to make agriculture more efficient… is of great interest to the Paraguayan side,' Kumaran said. Do You Know: • Mercosur is an economic and political bloc consisting of Argentina, Brazil, Paraguay, and Uruguay. Venezuela was suspended indefinitely in 2016, while Bolivia became a full member in 2024. Founded in 1991 to create a common market, spur development, and bolster democracy, Mercosur saw early successes, including a tenfold increase in trade within the bloc in its first decade. In 2024, Mercosur took a major step toward an agreement with the European Union, though other deals, including with the United States and China, remain elusive. • In 2023, the four founding countries had a combined gross domestic product (GDP) of nearly $3 trillion, according to World Bank data, making Mercosur one of the world's largest economic blocs. In comparison, Latin America's second-largest trade group, the Pacific Alliance, had a slightly lower combined GDP of close to $2.8 trillion. Other Important Articles Covering the same topic: 📍PM Modi meets Paraguay's President Pena in Delhi to deepen diplomatic and trade ties ECONOMY US rejects India's steel tariff challenge at WTO on legal, procedural grounds Syllabus: Preliminary Examination: Current events of national and international importance. Main Examination: General Studies II: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora. What's the ongoing story: The United States has rejected India's notice at the World Trade Organization (WTO), which proposed retaliatory action against the 25 per cent US tariffs on steel and aluminium, arguing that the tariffs were imposed on national security grounds. The US also pointed out procedural errors in India's case. Key Points to Ponder: • Know the terms-Tariffs, Non-Tariffs, dumping, Trade diversion and Protectionism • Why Tariffs are imposed? • What will be the impact of the U.S. steel and aluminium tariffs on global trade dynamics? • How does such protectionist policy affect developing economies like India? • 'Trade protectionism has seen a resurgence in global economic policies'-discuss • Discuss the merits and demerits of protectionist measures such as tariffs and import duties. Key Takeaways: • In its note dated May 23, the US stated that India is wrongly treating the tariffs on steel and aluminium as safeguard measures. It clarified that these duties were imposed under US law (Section 232), which allows such action if imports are considered a threat to national security. • This development is significant as US President Donald Trump on Friday announced a move to double import tariffs on steel to 50 per cent — a step Indian exporters have called 'unfortunate', warning that they have already lost $5 billion in exports due to earlier tariffs, and further hikes could deepen losses. • 'The United States will not discuss the Section 232 tariffs under the Agreement on Safeguards as we do not view the tariffs as a safeguard measure,' the US told the WTO Council for Trade in Goods in response to India's challenge. • In FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related goods. These exports now face sharply higher US tariffs, threatening the profitability of Indian producers and exporters. • The US also claimed that India had committed procedural errors. 'India never acknowledged the United States' offer to discuss these tariffs in our response dated 16 April 2025. Accordingly, India has not complied with the obligations under the Agreement on Safeguards, the agreement that it mistakenly contends applies to the tariffs in question,' the US note said. • Ajay Srivastava, former trade officer and head of the Global Trade Research Initiative (GTRI), said India now has several options. One is to launch a formal WTO dispute, not under the Safeguards Agreement, but under broader GATT rules, challenging the Section 232 tariffs as disguised protectionist measures. Do You Know: • On May 9, India submitted a document to the WTO, identifying the American metals tariffs, effective from March 12, as 'safeguard measures'. The WTO's Agreement on Safeguards (AOS) identifies safeguards as protectionist measures that a member country may invoke if it determines that certain product imports are significantly large and may 'cause or threaten to cause serious injury' to the corresponding domestic competitor. • According to India's note, the tariffs impact $7.6 billion worth of Indian exports into the US, on which $1.91 billion would be collected as duties. India's proposed retaliatory measure would result in an equivalent amount of duty collected from products originating in the United States,' it said. The specific US products were not specified. • In its response to the WTO on May 23, the US said that India's contention that the tariffs are 'safeguard measures' is incorrect, that the Section 232 tariffs were imposed on national security grounds, and even claimed that India had not followed due procedure in seeking negotiations on the subject. • India currently faces 26% 'reciprocal tariffs' under the International Emergency Economic Powers Act (1977). The US subsequently paused all reciprocal tariffs on April 9, while a legal battle over the validity of these tariffs (as well as the 10% baseline tariff charged on all countries) is currently underway. The White House justified this rate, saying India charges a 70% tariff on passenger vehicle imports, 10-20% on networking switches and routers and 50% on rice in the husk. • India also faces the Section 232 duties of 25% on steel, aluminium and automobiles, which will be doubled to 50% from Wednesday (June 4). We previously noted that the US is the largest market for Indian aluminium, with exports valued at $946 million in FY2024. These exports had exceeded $1 billion in the previous two financial years, and were up from just $350 million in 2016-17 when Trump first became President. Similarly, the US was also the largest market for Indian iron and steel articles, with Indian exports valued at $2.8 billion in FY2024. Other Important Articles Covering the same topic: 📍Tariff Tracker, June 3: What next for India? US dismisses WTO challenge, EU trade deal ahead India's rapid AI adoption, China's open-source lead in focus in Mary Meeker report Syllabus: Preliminary Examination: Current events of national and international importance. Main Examination: General Studies III: Science and Technology- developments and their applications and effects in everyday life. What's the ongoing story: 'Unprecedented' – that's the word frequently used by venture capitalist Mary Meeker—once known as the 'Queen of the Internet'—in her latest trends report on artificial intelligence (AI) development and adoption. Key Points to Ponder: • Who is Mary Meeker? • What does the report, titled 'Trends — Artificial Intelligence,' says? • According to recent global tech reports like Mary Meeker's, what is particularly noted in India's growth? • India's AI adoption is seen predominantly in which sectors? • What is a key challenge India faces despite rapid AI adoption, as indicated in the recent tech report? • Discuss the significance of India's rapid AI adoption in achieving digital transformation and inclusive growth. • How is India's policy and institutional readiness to build indigenous AI models in comparison to global leaders like the US and China? Key Takeaways: • The 340-page report, titled 'Trends — Artificial Intelligence,' charts out the speed at which costs of usage are dropping, and how its adoption curve is unlike any tech disruption of the past. 'The pace and scope of change related to the artificial intelligence technology evolution is indeed unprecedented…' Meeker writes in her report, her first major trends report since 2019. • While largely upbeat about AI's disruptive promise, the report also outlines cautions against well-known pitfalls including hallucinations, biases, misinformation and slow moving regulation. It also said that while AI platforms have racked up the user-base, revenue per user is still quite low for most of them, with a median of $23. • The adoption of AI platforms has been unlike anything that has come before it, the report said. For instance, it took the likes of Instagram, WhatsApp, and YouTube between 2-4 years to reach 100 million users, but for ChatGPT, it took less than 3 months. • The report also speculated, based on data from Morgan Stanley, that while it took between 6-12 years for 50% households in the US to have access to mobile and desktop internet, it will take only 3 years for the same number of households to become users of AI platforms. Do You Know: • Owing to its large demography and internet penetration, India has been a key user-base market for AI companies, the report said. It is the second largest market for ChatGPT, and contributes the highest percentage of its mobile app users (13.5%), ahead of countries like the US (8.9%), and Germany (3%). • India is also the third-largest user base (6.9%) for China's homegrown platform DeepSeek, and is behind only China (33.9%) and Russia (9.2%). However, the thing to note here is that ChatGPT, one of DeepSeek's main rivals, is banned in both China and Russia. Indians therefore contribute a substantial user base to DeepSeek, despite the availability of its Western rivals. • The report said that two different philosophies in shipping AI models are playing out in parallel – closed and open source. • Closed models follow a centralised, capital-intensive arc. These models – like OpenAI's GPT-4 or Anthropic's Claude – are trained within proprietary systems on massive proprietary datasets, requiring months of compute time and millions in spending, it said. They often deliver more capable performance and easier usability, and thus are preferred by enterprises and consumers, and – increasingly – governments. However, the tradeoff is opacity: no access to weights, training data, or fine-tuning methods, the report added. Other Important Articles Covering the same topic: 📍Mary Meeker's AI report: OpenAI's ChatGPT is growing 5.5x faster than Google Search Why MPC is likely to cut repo rate for 3rd consecutive time Syllabus: Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc. Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. What's the ongoing story: The Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) is expected to cut the repo rate – the key policy rate – by 25 basis points (bps) in the policy meeting scheduled from June 4 to 6, to support growth as inflation continues to remain below the 4 per cent target. Key Points to Ponder: • What are the instruments of monetary policy? • Will RBI change repo rate in the upcoming policy? • Will there be a change in monetary policy stance? • Will RBI revise inflation and GDP projections? • What happens to lending rates if repo rate is left steady? • When is RBI expected to cut repo rate? • What happens when repo rate is increased? • Repo rate is the rate at which central bank of a country (in our case Reserve Bank of India) lends money to whom? • In reverse repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) borrows money from whom? • If Repo Rate is increased or say decreased then it impacts common people? • Who decides the repo rate and reverse repo rate? • How repo rate and reverse repo rate are decided? • What is the difference between repo rate and interest rate? • If repo rate or reverse repo rate is increased or decreased, then how it impacts savings? • What Marginal Standing Facility? Key Takeaways: • With benign inflation, there has been a consensus among economists that the six-member MPC will cut the repo rate by 25 basis points (bps) to 5.75 per cent in the upcoming meeting. One basis point (bps) is one-hundredth of a percentage point. • Headline inflation, as measured by year-on-year changes in the all-India consumer price index (CPI), moderated to 3.2 per cent in April, the lowest since July 2019, from 3.3 per cent in March. The easing in CPI has been driven by the sustained fall in food prices. • Economists said that with inflation remaining below the 4 per cent target in the last three months (February, March and April), and a sharp fall in food inflation, CPI is likely to durably align with the 4 per cent target over a 12-month period. • Under the flexible inflation targeting (FIT) framework, the RBI has been mandated by the government to maintain CPI at 4 per cent with a band of +/-2 per cent. • According to economists, the RBI is likely to revise its projections on real gross domestic product (GDP) and inflation for FY26. • As per the RBI's estimate, CPI inflation for FY26 is expected to be at 4 per cent. The easing of supply chain pressures, softening of global commodity prices and higher agricultural production on the back of a likely above-normal south-west monsoon augur well for the inflation outlook in FY26, the RBI's annual report said. Do You Know: • Monetary policy essentially deals with the supply and cost (interest rates) of money in an economy. The RBI's MPC meets every two months to assess the state of monetary activities, and may tweak the repo rate — the interest rate at which the RBI lends to commercial banks — in a manner that reduces price fluctuations in the economy while keeping the inflation rate (the rate at which the general price level in the economy grows) at a reasonable level. According to RBI, there are several direct and indirect instruments that are used for implementing monetary policy: —Repo Rate: The interest rate at which the Reserve Bank provides liquidity under the liquidity adjustment facility (LAF) to all LAF participants against the collateral of government and other approved securities. —Standing Deposit Facility (SDF) Rate: The rate at which the Reserve Bank accepts uncollateralised deposits, on an overnight basis, from all LAF participants. The SDF is also a financial stability tool in addition to its role in liquidity management. The SDF rate is placed at 25 basis points below the policy repo rate. With introduction of SDF in April 2022, the SDF rate replaced the fixed reverse repo rate as the floor of the LAF corridor. —Marginal Standing Facility (MSF) Rate: The penal rate at which banks can borrow, on an overnight basis, from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a predefined limit (2 per cent). This provides a safety valve against unanticipated liquidity shocks to the banking system. The MSF rate is placed at 25 basis points above the policy repo rate. —Liquidity Adjustment Facility (LAF): The LAF refers to the Reserve Bank's operations through which it injects/absorbs liquidity into/from the banking system. It consists of overnight as well as term repo/reverse repos (fixed as well as variable rates), SDF and MSF. Apart from LAF, instruments of liquidity management include outright open market operations (OMOs), forex swaps and market stabilisation scheme (MSS). —Reverse Repo Rate: The interest rate at which the Reserve Bank absorbs liquidity from banks against the collateral of eligible government securities under the LAF. Following the introduction of SDF, the fixed rate reverse repo operations will be at the discretion of the RBI for purposes specified from time to time. —Bank Rate: The rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers. The Bank Rate acts as the penal rate charged on banks for shortfalls in meeting their reserve requirements (cash reserve ratio and statutory liquidity ratio). The Bank Rate is published under Section 49 of the RBI Act, 1934. This rate has been aligned with the MSF rate and, changes automatically as and when the MSF rate changes alongside policy repo rate changes. —Cash Reserve Ratio (CRR): The average daily balance that a bank is required to maintain with the Reserve Bank as a per cent of its net demand and time liabilities (NDTL) as on the last Friday of the second preceding fortnight that the Reserve Bank may notify from time to time in the Official Gazette. —Statutory Liquidity Ratio (SLR): Every bank shall maintain in India assets, the value of which shall not be less than such percentage of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight, as the Reserve Bank may, by notification in the Official Gazette, specify from time to time and such assets shall be maintained as may be specified in such notification (typically in unencumbered government securities, cash and gold). —Open Market Operations (OMOs): These include outright purchase/sale of government securities by the Reserve Bank for injection/absorption of durable liquidity in the banking system. Other Important Articles Covering the same topic: 📍Centre reconstitutes Monetary Policy Committee ahead of RBI rate review EXPLAINED Roots of Deendayal Upadhyay's Integral Humanism, the 'basic philosophy' of BJP Syllabus: Preliminary Examination: History of India Main Examination: General Studies I: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues. What's the ongoing story: The BJP is celebrating 60 years of the philosophy of Integral Humanism (Ekatm Manavvad), the thoughts of Pandit Deendayal Upadhyay, co-founder of the Bharatiya Jana Sangh (BJS), which the BJP says is the basis of the policies followed by the governments led by the party. Key Points to Ponder: • What you know about Pandit Deendayal Upadhyay? • Integral Humanism, as propounded by Deendayal Upadhyay, primarily advocates what? • Which political organization adopted Integral Humanism as its official ideology in 1965? • In Integral Humanism, what is the concept of 'Antyodaya'? • Discuss the core tenets of Deendayal Upadhyay's Integral Humanism? • How Integral Humanism differs from both socialism and capitalism? • How Integral Humanism reconciles spiritual values with economic development? Key Takeaways: • Upadhyay, a pracharak of the Rashtriya Swayamsevak Sangh (RSS), was associated with the BJS from the beginning, and was general secretary before being elected its president in Calicut in December 1967. • On February 11, 1968, Upadhyay was found dead outside Mughalsarai railway station, now renamed Deendayal Nagar. He had boarded a train from Jaunpur to Patna the previous evening. The mystery of Upadhyay's death remains officially unresolved. • Between April 22 and April 25, 1965, Upadhyay, who was then general secretary of the BJS, delivered four lectures at Ruia College in Bombay (now Mumbai) on the political philosophy of Ekatm Manavvad. He listed the problems before the country and their possible solutions. • 'Now that we are independent, what shall be the direction of our progress?', he asked. It is 'amazing that serious thought has not been given to this question and today even after 17 years of independence we cannot say that a definite direction has been decided upon.' He argued that it was 'neither possible nor wise to adopt foreign 'isms' in our country in the original form. It will not be helpful in achieving happiness and prosperity'. Do You Know: • Upadhyay concluded his fourth lecture with the words, 'We have in the last four days thought over the integrated form of Humanism. On this basis we shall be able to reconcile nationalism, democracy, socialism, and world peace with the traditional values of Bharatiya Culture and think of all these ideals in an integrated form.' • This idea of Upadhyay's Integral Humanism was subsequently expanded and articulated in detail by Dattopant Thengdi (1920-2004), an RSS pracharak who served with the BJS in its initial years in Madhya Bharat (later Madhya Pradesh), and who went on to found the Bharatiya Mazdoor Sangh (BMS) and was a BJS member of Rajya Sabha from 1964-76. However, the intellectual roots of the idea Integral Humanism go back almost four decades. Other Important Articles Covering the same topic: 📍What Deendayal Upadhyaya wrote on tolerance, mob rule and autocracy For any queries and feedback, contact Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X. Priya Kumari Shukla is a Senior Copy Editor in the Indian Express (digital). She contributes to the UPSC Section of Indian Express (digital) and started niche initiatives such as UPSC Key, UPSC Ethics Simplified, and The 360° UPSC Debate. The UPSC Key aims to assist students and aspirants in their preparation for the Civil Services and other competitive examinations. It provides valuable guidance on effective strategies for reading and comprehending newspaper content. The 360° UPSC Debate tackles a topic from all perspectives after sorting through various publications. The chosen framework for the discussion is structured in a manner that encompasses both the arguments in favour and against the topic, ensuring comprehensive coverage of many perspectives. Prior to her involvement with the Indian Express, she had affiliations with a non-governmental organisation (NGO) as well as several coaching and edutech enterprises. In her prior professional experience, she was responsible for creating and refining material in various domains, including article composition and voiceover video production. She has written in-house books on many subjects, including modern India, ancient Indian history, internal security, international relations, and the Indian economy. She has more than eight years of expertise in the field of content writing. Priya holds a Master's degree in Electronic Science from the University of Pune as well as an Executive Programme in Public Policy and Management (EPPPM) from the esteemed Indian Institute of Management Calcutta, widely recognised as one of the most prestigious business schools in India. She is also an alumni of Jamia Milia Islamia University Residential Coaching Academy (RCA). Priya has made diligent efforts to engage in research endeavours, acquiring the necessary skills to effectively examine and synthesise facts and empirical evidence prior to presenting their perspective. Priya demonstrates a strong passion for reading, particularly in the genres of classical Hindi, English, Maithili, and Marathi novels and novellas. Additionally, she possessed the distinction of being a cricket player at the national level. Qualification, Degrees / other achievements: Master's degree in Electronic Science from University of Pune and Executive Programme in Public Policy and Management (EPPPM) from Indian Institute of Management Calcutta ... Read More
