TRUMP’S TARIFFS AND THE U.S.-INDIA TRADE AGREEMENT
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
The U.S. Court of International Trade (CIT) has ruled that Trump-era tariffs were legally excessive, raising questions about their impact on global trade and ongoing U.S.-India trade negotiations. India is pushing for a fair deal before the July 8 tariff deadline.
What Are Trump’s Tariffs?
- U.S. President Donald Trump imposed high tariffs (10% to 135%) on imports from over 100 countries, including India.
- These tariffs disregarded commitments under international trade rules, including WTO agreements.
- Even remote and uninhabited regions were strangely covered under these trade measures, raising eyebrows globally.
Legal Challenge from U.S. Businesses
- Five small American businesses challenged the tariffs in the U.S. Court of International Trade.
- They claimed these taxes hurt their operations and were illegally imposed without proper legal backing.
- On May 28, 2025, the court ruled that the President’s powers were misused under the pretext of “national emergency”.
- However, the decision has been stayed by a higher U.S. court, meaning the tariffs still continue for now.
Issues with the Trade Deficit Argument
- The U.S. claimed that tariffs were to reduce trade deficits.
- But trade deficits only cover goods, ignoring America’s strong services exports like IT, finance, and education.
- With India, once services and defense sales are included, the U.S. actually enjoys a $35–40 billion surplus, not a deficit.
India’s Position and Challenges
- India had earlier withdrawn its WTO case against U.S. steel and aluminium tariffs under a mutual agreement in 2023.
- Yet, the U.S. has now doubled those tariffs to 50%, affecting Indian exporters.
- Threats of new tariffs on Apple’s India-manufactured goods also raise trade concerns.
- The U.S.-China truce limits India’s strategic leverage.
What India Must Negotiate
- Removal of all additional tariffs on Indian goods.
- Protection of Indian remittances from a proposed U.S. tax.
- Assurances against U.S. retaliation on India’s digital services tax.
- Safeguards for H-1B visa holders and smooth services trade.
- Clear rules on cross-border data flow.
- Alignment with WTO principles to avoid long-term risks.
Conclusion
India must ensure any trade pact with the U.S. protects its key interests and is legally sound. A hasty or weak deal can do more harm than good, especially in an uncertain global environment.
RETAIL INFLATION EASES TO SIX-YEAR LOW
TOPIC: (GS3) ECONOMY: THE HINDU
Retail inflation in India dropped to a six-year low, driven mainly by lower food prices. This marks the lowest level since February 2019, raising expectations about the RBI’s future monetary decisions.
What is Retail Inflation?
- Measured by the Consumer Price Index (CPI), it reflects the change in prices of goods and services consumed by households.
- It impacts the cost of living and purchasing power of people.
Recent Trends in Inflation
- Retail inflation fell to 2.8% in May 2025, the lowest in 75 months.
- The average CPI inflation for the first two months of 2025-26 stands at 2.99%, the lowest start to a fiscal year since 2017-18.
- Food and beverages inflation declined to 1.5% in May, from 2.1% in April 2025.
Factors Behind the Decline
- Continuous fall in food inflation for seven months in a row.
- Price drops seen in: Vegetables, Pulses, Spices, Meat and fish
- These declines were partially balanced by high inflation in: Edible oils, Fruits
Implications for Monetary Policy
- The Reserve Bank of India (RBI) had recently cut interest rates to support growth.
- With inflation now significantly lower, experts expect the RBI to pause any further rate cuts for now.
- The central bank may adopt a wait-and-watch approach to avoid overcorrecting.
CONSUMER PRICE INDEX (CPI)
The Consumer Price Index (CPI) is a key economic indicator that measures the average change in prices paid by consumers for a basket of goods and services over time.
It reflects the cost of living and is widely used to track inflation in the economy.
Features of CPI:
- Measures Retail Inflation: CPI tracks the price changes of goods and services that households typically purchase, such as food, clothing, housing, fuel, education, and healthcare.
- Represents Urban and Rural Consumers: In India, CPI is released separately for CPI-Rural, CPI-Urban, and CPI-Combined (all-India).
- Base Year: The current base year for CPI in India is 2012.
- Published by: The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) publishes CPI data monthly.
CPI Categories in India:
- CPI for Industrial Workers (CPI-IW) – compiled by Labour Bureau
- CPI for Agricultural Labourers (CPI-AL)
- CPI for Rural Labourers (CPI-RL)
- CPI (Urban, Rural, and Combined) – compiled by NSO
Significance of CPI:
- Monetary Policy Tool: The RBI uses CPI (Combined) to set inflation targets and make decisions about interest rates under the Flexible Inflation Targeting framework.
- Wage and Pension Adjustments: CPI is used to adjust Dearness Allowance (DA) for government employees and welfare schemes.
- Inflation Targeting: The government’s inflation target (as per RBI mandate) is 4% with a tolerance range of ±2%, based on CPI.
Conclusion
The sharp decline in retail inflation provides relief to consumers and boosts economic stability. However, rising prices in select food items remain a concern for policymakers.
URBANISATION AND THE CHALLENGE OF IDEAL TRANSIT SOLUTIONS
TOPIC: (GS3) ECONOMY: THE HINDU
India’s journey towards becoming a developed nation by 2047 includes urban expansion, which demands better public transport systems. The discussion around cost-effective transit options like trams and e-buses has gained focus in light of growing urban mobility needs.
India’s Urban Shift and Transport Needs
- Over 60% of India’s population is expected to live in urban areas by the 2060s.
- Existing large cities are expanding, and smart cities are still underdeveloped.
- Managing daily commuting needs in such urban settings is a growing challenge.
Government’s Recent Initiatives
- In the Union Budget, the government launched:
- PM e-Bus Sewa to deploy 10,000 e-buses.
- PM e-Drive scheme to support 14,000 e-buses, 1.1 lakh e-rickshaws, and other electric vehicles.
- However, India needs 2 lakh urban buses, but only 35,000 are functional, far below the actual demand.
- Metro networks are being expanded, yet they remain expensive and underutilised.
Concerns with Current Urban Transit
- Only 37% of urban residents in India have easy access to public transport.
- Comparatively, countries like China and Brazil offer better access (>50%).
- Metro systems, though helpful, face:
- High costs, both in construction and operation.
- Low ridership and fare sensitivity among users.
- Poor last-mile connectivity, discouraging use.
Need for Cheaper, Reliable Alternatives
- Government focus has shifted to electric buses, but they have high maintenance and replacement costs.
- Private investors show hesitation due to low profit margins.
- Trams and trolleybuses, which are often ignored, offer better long-term financial and environmental gains. Trams show 45% profitability over 70 years, E-buses result in 82% net loss over the same period.
Way Forward
- India must evaluate transport solutions based on cost-effectiveness, sustainability, and coverage.
- The planned tram system in Kochi could be a model for future urban transit.
- Rather than relying solely on subsidies, India needs balanced, scalable transit investments.
Conclusion:
India’s urban transport planning must focus on long-term, cost-effective, and sustainable solutions. Reviving efficient modes like trams can ensure inclusive mobility and support climate goals.
IS BANGLADESH SLIPPING INTO AUTHORITARIANISM?
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
Bangladesh’s interim government under Professor Muhammad Yunus announced constitutional reforms and delayed elections until April 2026. This has sparked concerns over the democratic direction of the country and whether it is veering towards authoritarianism.
Background
- Bangladesh is currently being governed by an “interim government” led by Nobel Laureate Prof. Muhammad Yunus.
- Originally formed to conduct elections, this government is now taking long-term decisions, raising fears of power consolidation.
Concerns over Governance and Elections
Delay in Elections:
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- Prof. Yunus had earlier promised elections by December 2025; now the date is pushed to April 2026.
- The military has urged elections by the end of the year.
Overstepping Mandate:
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- Interim governments are supposed to hold elections and then hand over power.
- Instead, the current administration is announcing constitutional reforms, which should only be done by an elected government.
Political Party Restrictions:
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- The Awami League is banned.
- BNP (Bangladesh Nationalist Party) is dissatisfied with the current situation.
- Smaller or extreme groups are filling the political gap.
The July Proclamation
- Purpose: Proposed as a new political charter, aiming to replace or dilute the legacy of the 1972 Constitution linked to Sheikh Mujibur Rahman.
- Symbolism: July may become a new political milestone, overshadowing traditional events like Independence Day (December 16) or Sheikh Mujib’s assassination anniversary (August).
- Content Concerns: Lack of clarity on who drafted it or its full implications.
Geopolitical Angle: Humanitarian Corridor
- Prof. Yunus proposed a humanitarian corridor to aid Myanmar’s Rakhine region.
- India and Bangladesh fear it could compromise sovereignty and be misused for arms smuggling.
BNP’s Position
- BNP criticized the government in rallies but has not capitalized much on the situation.
- Its leader, Tarique Rahman, remains abroad due to pending legal cases.
- BNP is wary of the newly formed National Citizens Party (NCP), seen as backed by the interim government.
DEMOCRACY
Democracy is a system of government where people have the power to choose their leaders through free and fair elections. Everyone has equal rights, and the government works for the people and with their consent.
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- Leaders are elected by citizens.
- Freedom of speech and press.
- Rule of law and protection of rights.
- Regular elections and peaceful transfer of power.
AUTHORITARIANISM
Authoritarianism is a system where one leader or a small group holds all the power, often without the consent of the people. Citizens have limited freedom, and the government is not accountable to the public.
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- Power is concentrated in one authority.
- Elections, if held, are often unfair or symbolic.
- Limited freedom of speech and media.
- Opposition is suppressed.
Conclusion
The prolonged stay of an unelected government and proposed reforms raise fears of democratic backsliding in Bangladesh. Transparent elections and political inclusiveness are vital to restore legitimacy.
TOURETTE SYNDROME
TOPIC: (GS3) SCIENCE AND TECHNOLOGY: THE HINDU
Tourette Syndrome has been in focus due to increasing public awareness and discussions about mental health. It affects a small but significant portion of the population, especially children.
About Tourette Syndrome:
- It is a neurological condition that causes sudden, repeated movements or sounds, known as tics, that the person cannot easily control.
- Most cases begin between the ages of 2 and 15, with the average age of onset being around 6 years.
- The condition is more common in boys than in girls.
- It affects about 0.3% to 1% of the world population.
Types of Tics:
- Simple Motor Tics: Involve one muscle group, such as eye blinking, head jerking, or shoulder shrugging.
- Simple Vocal Tics: Include sniffing, throat-clearing, or grunting.
- Complex Motor Tics: Include coordinated movements like hopping, touching objects, or bending.
- Complex Vocal Tics: May involve repeating words (echolalia) or, rarely, inappropriate language (coprolalia).
Triggers and Associations:
- Tics can increase with stress, anxiety, or excitement and often reduce during sleep.
- Often found along with other conditions like ADHD, OCD, depression, anxiety, or autism spectrum disorders.
Treatment and Management:
- There is no permanent cure, but symptoms can be managed.
- Cognitive Behavioural Therapy (CBT) is effective in helping people control or cope with tics.
- Medications may be prescribed in severe cases.
Conclusion
Though not life-threatening, Tourette Syndrome can impact daily life. Early support, therapy, and public awareness can help manage it effectively.
CENTRAL SCHEMES AND THE ‘EFFECTIVENESS
TOPIC: (GS2) GOVERNANCE: THE HINDU
The Finance Ministry has stated that all Central government-funded schemes must pass an “effectiveness” test to continue beyond March 2026. This is part of a plan to improve efficiency, reduce financial burden, and ensure schemes achieve their goals.
Background of the Issue:
- The Union government funds 54 Central schemes and 260 Centrally sponsored schemes.
- The Finance Ministry has asked that schemes must only continue if their performance reports show positive results.
- A circular dated June 6 mandates that each scheme should have a ‘sunset date’, i.e., a clearly defined end date unless re-evaluated.
New Guidelines for Schemes:
- Schemes must prove that they are effective in meeting their goals and deserve to be scaled up or continued.
- Evaluations will be done by March 31, 2026, and schemes will require fresh Cabinet approval.
- Applies to sectors like health, education, agriculture, water, and more.
- Schemes will now operate with fixed fund limits, meaning fund usage must stay within pre-approved levels.
Financial Control Measures:
- The Finance Ministry aims to limit the growth of public expenditure, especially for schemes with rising costs.
- Even demand-driven schemes like MGNREGS will face restrictions.
- Ministries must now justify extra funding and suggest cuts in other schemes if extra funds are requested.
Centrally Sponsored Schemes (CSS):
- These schemes are jointly funded by the Central and State Governments.
- The fund-sharing ratio is typically 60:40 for general states and 90:10 for North-Eastern and Himalayan states.
- They are implemented by the State Governments, though the framework and guidelines are set by the Central Government.
- CSSs are meant for areas under the State List or Concurrent List, such as health, education, agriculture, and rural development.
- The objective is to ensure nationwide uniformity in development efforts, while giving States the flexibility to adapt to local needs.
- Some well-known examples include MGNREGS, PM Awas Yojana (Gramin), National Health Mission, and Samagra Shiksha Abhiyan.
- These schemes require periodic evaluation and performance-based continuation, as recently emphasized by the Finance Ministry.
Central Sector Schemes:
- These schemes are fully funded by the Central Government.
- They are also directly implemented by the Central Government, through its ministries or central agencies.
- Central Sector Schemes typically target Union List subjects such as defence, space, atomic energy, or national-level priorities like infrastructure and research.
- States have minimal role in their execution.
- Examples include BharatNet, PM Gati Shakti, INSPIRE Scholarship, and Direct Benefit Transfer (DBT) schemes.
Conclusion
This move intends to make government spending more accountable. Demand-driven schemes must now also meet performance benchmarks and cost limits to continue receiving support.
WILDLIFE (PROTECTION) ACT, 1972
TOPIC: (GS3) ENVIRONMENT: THE HINDU
The Kerala government has urged the Centre to amend the Wildlife (Protection) Act, 1972. It seeks legal permission for controlled killing of wild animals that pose threats to human lives and farming activities due to rising human-wildlife conflicts in the state.
Human-Wildlife Conflict in Kerala
- There has been a growing number of attacks by wild animals in Kerala between 2016 and 2025.
- These incidents have resulted in loss of lives and crop damage, especially in rural and forest-adjacent areas.
- The state wants more legal flexibility to respond quickly to such cases.
Challenges in the Wildlife (Protection) Act, 1972
- Strict Protection for Schedule I Animals: Animals under Schedule I (like elephants, bonnet macaques) enjoy the highest level of protection, making intervention difficult even when they are dangerous.
- Approval Before Action: Authorities must prove that capturing or relocating the animal is not possible before using lethal methods, which delays quick action.
- Limited Power of Local Authorities: District collectors can declare public nuisance, but they lack the authority to act immediately, as courts often limit such actions.
- Wildlife Officials Face Legal Barriers: Even forest officers or wildlife wardens are not allowed to act proactively, especially in Schedule I animal conflicts.
About the Wildlife (Protection) Act, 1972
- This law provides a legal framework to protect wild animals, birds, and plants, and to conserve their habitats.
- It regulates hunting, trade, and conservation practices to safeguard India’s biodiversity.
Schedules under WPA (Original Act)
- Schedule I & II: Absolute protection for endangered species, with strict punishments.
- Schedule III & IV: Protection for animals not facing extinction; penalties are less severe.
- Schedule V: Lists animals like wild boars and monkeys that can be hunted under certain conditions.
- Schedule VI: Focuses on conservation of specific plant species.
Legal Provisions
- Section 9: Bans hunting of protected animals unless allowed under Section 11 or 12.
- Section 11: Killing is permitted only if the animal threatens human life, is incurably ill, and cannot be captured.
- Section 62: The Centre can declare animals (except Schedule I) as vermin in specific areas and timeframes.
- Section 50: Allows seizure of tools used in illegal hunting, but does not grant emergency powers to local officers.
Wildlife (Protection) Amendment Act, 2022
- The number of schedules was reduced from 6 to 4 for better clarity.
- Schedule I: Highest protection.
- Schedule II: Moderate protection.
- Schedule III: Protected plant species.
- Schedule IV: Animals under international trade regulation (CITES).
PRESENT SCHEDULES OF THE WILDLIFE (PROTECTION) ACT (WPA), 1972
As per the Wild Life (Protection) Amendment Act, 2022, the total number of schedules has been reduced from 6 to 4 to simplify classification and enforcement:
Schedule I
- Includes species that require the highest level of protection.
- Hunting, trade, or exploitation of these animals is strictly banned.
- Offenses under this schedule carry the highest penalties, including imprisonment and heavy fines.
- Example: Tigers, elephants, and other endangered species.
Schedule II
- Covers species that are protected but not as critically endangered as those in Schedule I.
- Offenses involving these animals invite lesser penalties compared to Schedule I.
- Provides moderate legal safeguards to ensure conservation.
Schedule III
- Focuses on plant species that need legal protection due to their ecological value or risk of overharvesting.
- It ensures conservation of threatened flora across India.
Schedule IV
- Contains species that are regulated under international conventions, particularly the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
- Ensures India complies with global wildlife trade rules to prevent exploitation through smuggling or illegal trade.
Change After 2022 Amendment:
- The previous Schedule V (vermin) and Schedule VI (protected plants) were removed. Their provisions have been restructured under the new simplified framework.
Conclusion
Kerala’s plea to amend the Wildlife Act reflects the need to balance wildlife protection with human safety. The increasing conflicts demand faster decision-making powers and legal updates to protect both lives and biodiversity.
KHANKHUULUU MONGOLIENSIS
TOPIC: (GS1) GEOGRAPHY: THE HINDU
A new species of tyrannosauroid dinosaur, Khankhuuluu mongoliensis, also called the “Dragon Prince,” has been officially identified from fossils found in Mongolia, offering new insights into the evolution of the famous Tyrannosaurus rex.
About Khankhuuluu Mongoliensis
- Khankhuuluu mongoliensis lived around 86 million years ago during the Late Cretaceous period.
- The fossils were originally discovered in the 1970s in the Gobi Desert, Mongolia, but were only recently confirmed as a distinct species through modern analysis.
- The name translates to “Dragon Prince of Mongolia.”
Features
- It was a medium-sized carnivore, weighing around 750 kg, about the size of a horse.
- It measured around 4 meters long, much smaller than its descendant, T. rex.
- It had a long, low skull, small horn-like structures, and a lightweight, agile build.
- Unlike the massive, bone-crushing T. rex, it was a mesopredator, using speed and agility to hunt smaller animals.
Importance of the Discovery
- Khankhuuluu is considered the closest known ancestor of T. rex.
- It helps fill a gap in the evolutionary record, showing how tyrannosaurs evolved from smaller predators into giant apex hunters.
- The discovery supports the theory that tyrannosaurs originated in Asia and later migrated to North America, where they became dominant predators.
- This species marks a crucial evolutionary step in the rise of the tyrannosaur lineage.
Conclusion
The identification of Khankhuuluu mongoliensis provides critical evidence about the early evolution and migration of tyrannosaurs, deepening our understanding of dinosaur ancestry and prehistoric life.
The post Daily Current Affairs 13-June-2025 first appeared on Ekam IAS Academy.