GS Analyst: Daily Current Affairs

Recently, India secured a 9,000 sq. km copper and cobalt exploration block in Zambia, a country known for its high-grade copper deposits. This is crucial as domestic copper ore production is declining, and India aims to secure overseas mineral assets to meet rising demand. The move comes as the U.S. and China take steps to secure their own copper supply chains, highlighting the growing global competition for copper resources.

Why is Copper Important?

• Copper is a critical mineral, vital for electric vehicles (EVs), clean energy technologies, infrastructure, and defense applications.
• Global copper demand is projected to exceed supply by 2035, making it essential for countries to secure stable supply chains.
• The copper value chain involves several stages:
  • Ore extraction
  • Processing into concentrate
  • Smelting into anode
  • Refining into cathode, which is used in wires, rods, and industrial components.
• Why Zambia?
  • Zambia is the 7th largest copper producer globally.
  • The Northwestern province, where India secured the 9,000 sq. km block, is known for rich copper and cobalt deposits.
  • India’s Geological Survey of India (GSI) will explore the block, roughly six times the size of Delhi.
  • Other major players in Zambia:
    • Vedanta Group (India): Owns a large copper mine in Zambia’s Copperbelt province.
    • First Quantum Minerals (Canada) and Nonferrous Metal Mining (China): Among Zambia’s largest copper producers.

India’s Copper Mining Challenges

• Declining Domestic Production:
  • 2023-24 copper ore production: 78 million tonnes (mt) (8% lower than 2018-19). Hindustan Copper Ltd (HCL), India’s only domestic copper miner, saw a 6% year-on-year decline in output.
• Rising Copper Imports: India’s copper concentrate imports doubled in value to ?26,000 crore in 2023-24 (compared to 2018-19).
• Long Mining Timeline: Setting up a new copper mine takes up to 17 years globally, delaying immediate relief from domestic resources.
• Need for Overseas Exploration: India is looking at Zambia, Chile, and the Democratic Republic of Congo (DRC) for acquiring copper mines.
  • Mines in these countries are high-grade and can be developed faster due to their established mining infrastructure.

Global Copper Competition

• U.S. Response to Copper Shortages: Despite large reserves, the U.S. lacks refining capacity, making it dependent on imports.
• China’s Copper Strategy
  • China controls 50% of the world’s copper smelting and refining capacity.
  • China is limiting new smelting capacity due to:
    • Falling treatment and refining charges (TCRCs), reducing profitability.
    • Insufficient supply of copper concentrate from mines in Chile, Peru, and the DRC.
    • Excess smelting capacity, forcing China to slow expansion.
• China’s strategy: Any new smelters must secure long-term copper contracts before approval. China aims to balance smelting capacity with global copper ore availability.
• Africa’s Growing Role in Copper Mining
  • Africa’s share in global critical minerals (copper, lithium, cobalt) is increasing.
  • Key statistics:
    • DRC produces 70% of the world’s cobalt.
    • DRC will be the world’s 2nd largest copper producer by 2030.
    • Africa accounts for 16% of global copper production.
    • India’s Ministry of Mines is expanding its presence in DRC, Tanzania, Mozambique, and Rwanda to secure more mineral assets.
  • Challenges:
    • Strong competition from China, the U.S., and other nations.
    • Geopolitical risks and regulatory challenges in African nations.

The Wallace Line is a fascinating example of how geography shapes evolution. Scientists now see it as a transition zone rather than a strict boundary. Modern studies show that some species can cross the line over time. Climate change and habitat destruction threaten these ecosystems, making it important to understand how species will adapt in the future.

What is the Wallace Line?

• The Wallace Line is an invisible boundary that separates the unique animal species of Asia from those of Australia.
• First identified by English naturalist Alfred Russel Wallace in the 19th century, this line runs through the Malay Archipelago, passing between the islands of Bali and Lombok and continuing north between Borneo and Sulawesi.
• Significance:
  • It marks a dramatic shift in biodiversity over a very short distance.
  • Animals on the Asian side (Borneo, Bali) resemble those from mainland Asia (e.g., tigers, monkeys).
  • Animals on the Australian side (Sulawesi, Lombok) resemble those from Australia (e.g., marsupials like kangaroos and cuscuses).

Why Does This Division Exist?

The answer lies in plate tectonics and evolution.

• Millions of years ago, Australia broke away from Antarctica and started drifting north.
• Meanwhile, Asia remained connected to its mainland, allowing animals to spread across.
• Over time, as sea levels rose and fell, some islands were submerged while others remained connected to larger land masses.
• This led to species evolving separately on different islands, creating the distinct biodiversity seen today.

Why is Sulawesi Special?

• Sulawesi, located near the Wallace Line, has species from both sides—some of Asian origin (like the anoa, a type of buffalo) and others of Australian origin (like the dwarf cuscus, a marsupial).
  • This puzzled Wallace because most other islands had a clear division.
  • Scientists now believe Sulawesi was formed from fragments of both continental plates, allowing species from both regions to settle there.

The U.S. State Department updated its factsheet on Taiwan, removing the statement that the U.S. "does not support Taiwan independence." The update also mentioned that the U.S. will support Taiwan’s participation in international organizations where applicable. China strongly opposed this change, calling it a “serious regression” in U.S. policy and an “erroneous message” to pro-independence forces in Taiwan.

What is U.S. Policy on Taiwan?

• After the Chinese Civil War (1949), two governments claimed legitimacy:
  • People’s Republic of China (PRC) – controlled the mainland.
  • Republic of China (ROC) – fled to Taiwan.
• The U.S. initially recognized ROC (Taiwan) as the legitimate government of China.
• S.-China Rapprochement & "One China" Policy (1972-1979): U.S. President Richard Nixon visited China, leading to the Shanghai Communiqué: The U.S. acknowledged that both PRC and ROC agree there is “One China.” The U.S. agreed not to challenge this stance and left the dispute to the Chinese.
• 1979: The U.S. switched diplomatic recognition from Taiwan (ROC) to China (PRC). However, it pledged to maintain "cultural, commercial, and unofficial relations" with Taiwan.
• Today, the Taiwan Relations Act (TRA), 1979, governs U.S.-Taiwan relations.
• Key Provisions:
  • The U.S. will maintain close economic, cultural, and security ties with Taiwan.
  • The U.S. will supply Taiwan with defensive weapons to ensure its self-defense.
• As a result, regular arms sales from the U.S. to Taiwan continue, angering China.
• Taiwan operates in the U.S. through the Taipei Economic and Cultural Representative Office (TECRO) while the U.S. has the American Institute in Taiwan (AIT).

China’s Response and Rising Tensions

• China sees Taiwan as a breakaway province and wants unification, by force if necessary.
• Chinese Aggression in the Taiwan Strait:
  • Military Exercises: China regularly conducts military drills near Taiwan.
  • Cyberattacks & Spy Balloons: Used to increase pressure on Taiwan.
  • Diplomatic Isolation: Under China’s influence, Taiwan has lost many diplomatic allies; only 12 countries now recognize Taiwan.
• 2024 Taiwan Elections:
  • The elections took place amid heavy Chinese military pressure in the Taiwan Strait.
  • The ruling Democratic Progressive Party (DPP), which supports Taiwan’s sovereignty, has a tense relationship with China.

Why Taiwan Matters?

• Taiwan sits in an important position in the world’s most economically consequential region. 
  • Taiwan is located at a critical node within the first island chain, anchoring a network of U.S. allies and partners, stretching from the Japanese archipelago down to the Philippines and into the South China Sea, that is critical to the region’s security and critical to the defense of vital U.S. interests in the Indo-Pacific.
• For China (Beijing & Xi Jinping): Taiwan is a core issue of national reunification and national rejuvenation.
• For the U.S.: Taiwan is a key semiconductor hub (TSMC produces over 50% of the world’s advanced chips).
  • It is also a major buyer of U.S. weapons.
• For Taiwan: It faces a military and diplomatic threat from China and depends on S. support for its defense and economy.

India's stance on the status of Taiwan:

• India has followed a “One China policy”since it recognized the PRC in 1949, and only maintains trade and cultural relations with Taiwan.
• India has an office in Taipei for diplomatic functions — India-Taipei Association (ITA) is headed by a senior diplomat. Taiwan has the Taipei Economic and Cultural Center (TECC) in New Delhi.
• The India-Taiwan Parliamentary Friendship Forum, established in 2016, is rarely active, and parliamentary visits are largely ad hoc.

The Supreme Court of India directed State governments to consider framing guidelines to prevent private hospitals from overcharging patients for medicines, medical devices, implants, and consumables by forcing them to purchase from hospital-owned pharmacies. However, the court also cautioned against harsh regulations that could discourage private investment in healthcare.

Supreme Court’s Observations

• Need for Private Sector in Healthcare: The court acknowledged that States depend on private hospitals to provide basic and specialized healthcare services due to gaps in public health infrastructure.
  • Until government facilities are strengthened, private hospitals play a crucial role in healthcare delivery.
• States Should Frame Guidelines: The court refrained from mandating strict rules but urged State governments to consider policies ensuring fair pricing.
• Caution Against Overregulation: States must balance consumer protection with the growth of private healthcare infrastructure.

Scenario of the Healthcare Sector in India

• India's healthcare industry is vast, covering hospitals, medical devices, clinical trials, telemedicine, medical tourism, health insurance, and medical equipment. The healthcare system is divided into:
  • Public sector: Government-run Primary Healthcare Centres (PHCs) in rural areas and limited secondary and tertiary hospitals in key cities.
  • Private sector: Dominates secondary, tertiary, and quaternary healthcare, mostly in metros, Tier-I, and Tier-II cities.

Private Healthcare in India

• Dominant role: Private spending makes up nearly 60% of total healthcare expenditure.
• Dispersed sector: Private healthcare is fragmented with rural-urban disparities, market failures, and income-based segmentation.
• Why is private healthcare not affordable in India?
  • High-cost urban concentration of quality private healthcare.
  • Fragmentation leading to uneven service delivery.
  • Expensive insurance packages with limited benefits.

Key Challenges in Healthcare

• Limited Access to Basic Healthcare Shortage of medical professionals and quality assurance.
• Low government health spending leads to gaps in services.
• Lack of preventive care leads to high disease burden and costs.

• Low Budget Allocation: India spends only 1% of GDP on healthcare (2021-22). Developed countries like Japan, Canada, and France spend 10%. Even Bangladesh and Pakistan spend over 3%.
• Lack of Medical Research & Innovation: R&D in healthcare is Furthermore, there is limited focus on cutting-edge technology and new medical projects.
• Shortage of Healthcare Professionals: India lacks 600,000 doctors, as per government data. Nurses and paramedics are also in short supply.
• Poor Infrastructure & Resources: Overcrowded hospitals, inadequate staff, and lack of medicines.

There has been a renewed debate about delimitation after the issue raised by Southern states. The delimitation of constituencies for the Lok Sabha and State Legislative Assemblies is to be carried out on the basis of the first Census after 2026.

What is Delimitation?

• Delimitation refers to the process of fixing the number of seats and boundaries of constituencies for the Lok Sabha and State Legislative Assemblies.
• It is carried out by the Delimitation Commission, which is constituted by an Act of Parliament.
  • Delimitation was conducted after the 1951, 1961, and 1971 Censuses.
  • In 1976, the number of Lok Sabha seats was frozen at 543 based on the 1971 Census, despite an increasing population, to encourage population control measures.
• As per constitutional provisions, this freeze will be lifted after the first Census post-2026, leading to a redistribution or increase of seats.

Key Issues in Delimitation

• Uneven Population Growth: Northern states like Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan have seen higher population growth than Southern states (Tamil Nadu, Kerala, Karnataka, Andhra Pradesh) and smaller northern states (Punjab, Himachal Pradesh, Uttarakhand, and Northeast).
  • This creates an imbalance in representation if seats are reallocated solely based on population.
• Possible Scenarios for Seat Allocation: Redistribution of existing 543 seats among states based on the new Census. Increase in the total number of seats to 848, with a proportional rise for all states.
• Impact on Southern and Smaller States: If seats are reallocated based on population, Southern states’ share in the Lok Sabha will decline from 24% to 19%.
  • Smaller states in the North and Northeast will also lose political significance despite successfully controlling population growth.
  • This could violate the federal structure of India, leading to political disenchantment in the affected states.

Potential Solutions

• Capping Lok Sabha Seats at 543: India has functioned with 543 MPs since 1976, even as the population grew from 55 crore to 145 crore. With population projected to peak at 165-170 crore in the next three decades, a fixed number of MPs would maintain federal balance and prevent the dominance of larger states.
  • The U.S. follows a similar model, capping the House of Representatives at 435 seats since 1913, despite population growth.
• Increasing State Assembly Seats: The number of MLAs in each State can be increased based on projected population to ensure local representation, while maintaining a fixed number of Lok Sabha MPs.
• Political Consensus and Federal Safeguards: MPs from Southern states, smaller Northern states, and the Northeast must push for a cap in Parliament to protect their political representation.
  • A balanced approach should be taken to ensure representation without penalizing states that have implemented successful population control measures.

MSMEs play a crucial role in India's economic growth by contributing to employment, industrial output, and exports. Recognized as a key driver of development, they help in fostering entrepreneurship and regional economic balance.

Contribution of MSMEs to the Indian Economy

• Employment Generation: MSMEs employ over 110 million people, making them one of the largest sources of employment in the country.
• GDP Contribution: MSMEs contribute around 30 percent to India’s GDP. They account for about 45 percent of total industrial production.
• Exports and Global Trade: MSMEs contribute nearly 40 percent to India's total exports. They are major exporters in sectors like textiles, handicrafts, engineering goods, and food processing.
• Support to Rural and Small Industries: MSMEs promote small-scale industries, including Khadi, Village, and Coir industries.

Major Challenges Faced by MSMEs

• Limited Access to Finance: Many MSMEs struggle to obtain loans due to lack of credit history and collateral. Dependence on informal lending increases financial burden and costs.
• Shortage of Skilled Workforce: MSMEs face difficulties in finding trained professionals, affecting productivity and efficiency. Limited access to vocational training programs hinders skill development.
• Technological Barriers: Many MSMEs lack resources to adopt modern technologies and automation. Low investment in research and development reduces their competitiveness.
• Regulatory and Compliance Burden: Complex taxation, licensing, and labor laws increase operational challenges. Delayed payments from larger firms and government agencies affect cash flow.
• Infrastructure Gaps: Inadequate transportation, unreliable power supply, and lack of warehousing impact MSME efficiency.
• Global Competition and Market Access: MSMEs face competition from international manufacturers offering low-cost alternatives. Limited branding and marketing restrict their global reach.

India has successfully met the National Health Policy (NHP) target of reducing the Maternal Mortality Rate (MMR) to 100 deaths per 1 lakh live births. Between 1990 and 2020, India achieved an 83% decline in MMR, which is significantly higher than the global decline during the same period.

What is maternal mortality ratio (MMR)?

• The maternal mortality ratio (MMR) is defined as the number of maternal deaths during a given time period per 100,000 live births during the same time period.
• It depicts the risk of maternal death relative to the number of live births and essentially captures the risk of death in a single pregnancy or a single live birth. 
• Key Achievements in Infant and Child Mortality
• Infant Mortality Rate (IMR) declined by 69%, compared to 55% globally.
• Under-5 Mortality Rate reduced by 75%, while the global reduction was only 58%.

The International Monetary Fund (IMF), in its Financial Sector Assessment Programme (FSAP) for India, has warned that Non-Banking Financial Companies (NBFCs), especially large state-owned infrastructure financing firms, have significantly increased their exposure to the power and infrastructure sectors.

What’s the issue?

• While banks have reduced direct exposure to these sectors after the 2016 banking crisis, NBFCs have taken on a larger role, increasing systemic risks.
• If major NBFCs face distress, it could spill over to banks, corporate bond markets, and mutual funds, causing widespread financial instability.
• IMF’s Key Recommendations

• Financial Stability Over Social Goals: IMF suggests prioritizing financial stability over developmental goals to avoid future crises.
• Regulating State-Owned NBFCs: Large state-owned NBFCs should have the same regulations as private NBFCs.
• Strengthening Banks’ Capital Base: Some public sector banks (PSBs) need more capital to support lending in crisis situations.
• Enhancing Crisis-Response Mechanisms: The RBI should prepare liquidity policies for potential systemic shocks in NBFCs.
• Policy Alignment with Global Standards: India should implement:

• Risk-based supervision of insurers
• Pillar-2 capital charges for banks
• International Financial Reporting Standards (IFRS)
• Better oversight of financial conglomerates

Impact on India’s Financial Sector

• The IMF considers India’s financial system systemically important globally, making these recommendations crucial for maintaining stability.
• If ignored, an NBFC crisis could trigger a domino effect, affecting banks, corporate lending, and investment markets.

The Union Finance Minister introduced the Income-Tax Bill, 2025, aiming to replace the Income-Tax Act, 1961. The government claims the new legislation will simplify tax laws, reduce litigation, and enhance clarity for taxpayers and administrators. However, critics argue that the Bill primarily makes cosmetic and structural changes without addressing deeper complexities and ambiguities in the existing law.

Lack of Real Simplification

• Continued Complexity: Despite claims of clarity, the Bill retains dense legal language, making tax laws inaccessible to ordinary taxpayers.
• Superficial Textual Changes: Alterations like replacing “notwithstanding” with “irrespective” do not improve comprehension but merely shift terminology.
• Structural but Not Substantive Reforms: While redundant provisions are removed, the fundamental approach to income taxation remains unchanged, limiting real benefits.

Increased Litigation & Uncertainty

• Retaining Old Definitions: The Bill still refers back to provisions in the 1961 Act (e.g., definition of "income"), leading to confusion rather than clarity.
• Judicial Precedents at Risk: Courts have settled various tax disputes over decades, but the new Bill rearranges provisions, potentially reopening settled issues.
• Reassessment Power Remains Vague: While the Bill retains the tax authority’s power to reopen past assessments, it fails to clearly define critical terms like “risk management strategy”, which invites potential misuse.

Expansion of Search and Seizure Powers

• Digital Surveillance Powers: The Bill explicitly grants tax officials access to electronic data, emails, and social media accounts, significantly expanding government intrusion.
• No Judicial Oversight: Authorities can override digital security protections without judicial approval, raising privacy concerns under the Puttaswamy Judgment (2017).
• Risk of Data Exploitation: Unlike previous laws, officials can now legally search digital communications, creating risks of abuse and excessive state control over personal data.

Practice Question

Q. Discuss the importance of clarity and accessibility in taxation laws. How can excessive state control in tax administration be balanced with the need for effective compliance and enforcement?

NASA’S recent statement emphasized U.S. dominance in lunar exploration following Firefly Aerospace’s successful soft landing on the Moon. This remark raised concerns about the shift from global space leadership to unilateral control, reflecting an aggressive U.S. space policy that may undermine international cooperation.

The Shift from Leadership to Domination

• Aggressive U.S. Stance: The statement aligns with a growing trend of unilateralism in U.S. space policy, reminiscent of the Trump administration’s “America First” approach.
• Impact on International Collaboration: NASA, historically a pillar of global space partnerships, risks alienating allies by prioritizing dominance over cooperation.
• Historical Precedents: Similar U.S. stances in climate change agreements and trade policies have previously weakened international trust and coordination.

Challenges of Space as a Global Commons

• Legal & Regulatory Gaps: The Outer Space Treaty (1967) lacks specific provisions to prevent resource monopolization and territorial claims, leaving room for power struggles.
• Cislunar Space & Resource Conflicts: Lunar exploration brings mining interests (e.g., water ice in permanently shadowed craters) into contention, increasing the risk of geopolitical tensions.
• FAA & SpaceX Case Study: The S. Federal Aviation Administration (FAA) distanced itself from responsibility for SpaceX rocket debris in Poland, exposing weaknesses in space governance.

Need for Multilateral Space Governance

• Strengthening International Institutions: Organizations like the UN Office for Outer Space Affairs (UNOOSA) and the Artemis Accords need clearer enforcement mechanisms.
• Role of Emerging Space Nations: Countries like India (ISRO), Japan (JAXA), and the EU (ESA) must push for collective decision-making in space policies.
• Preventing Protectionism: Just as in global trade and climate agreements, a rules-based space framework is essential to avoid monopolization of lunar and cislunar resources.

Practice Question

Q. Examine the challenges of treating outer space as a ‘global commons.’ How can international frameworks be strengthened to ensure equitable and peaceful space exploration?"

India has announced the launch of an indigenous AI model and the establishment of an AI Safety Institute (AISI) under the Safe and Trusted Pillar of the IndiaAI Mission. This initiative aligns with global efforts by countries like the U.K., U.S., Singapore, and Japan, which have set up AISIs to address AI risks and enhance international collaboration.

Addressing India-Specific AI Challenges

• Bias and Discrimination Risks: AI systems in India often suffer from inaccuracy and bias, necessitating context-specific solutions tailored to India's diverse linguistic and socioeconomic landscape.
• Hub-and-Spoke Model: The AISI will function through collaboration with academic institutions, startups, industry players, and government bodies to ensure inclusive AI development.
• Leveraging the Startup Ecosystem: Initiatives like Karya, which empower rural communities to create high-quality Indian language datasets, showcase how India-specific AI solutions can enhance social equity.

Aligning with Global AI Safety Standards

• International Collaboration: India must engage with global AISIs and adopt international safety standards while adapting them to local needs.
• Global AI Safety Taxonomy: A standardized framework is essential to ensure common terminology across technical experts, policymakers, and legal professionals, reducing communication barriers in AI governance.
• Transparency and Risk Mitigation: Establishing an international notification framework for AI model development will enable global AISIs to share information on AI advancements and their potential risks.

India’s Leadership in the Global South

• Bridging the AI Governance Gap: Many emerging economies lack technical expertise to establish AI safety mechanisms; India can lead efforts to co-develop safety frameworks.
• MeitY-UNESCO Collaboration: India’s AI readiness assessment with UNESCO provides a foundation for ethical AI development, addressing bias mitigation, privacy, and synthetic data generation.
• Responsible AI by Design: India’s AISI must develop indigenous AI safety tools while ensuring interoperability with global frameworks for effective AI governance.

Practice Question

Q. India’s AI Safety Institute (AISI) aims to balance local AI governance with global interoperability. Discuss the challenges and opportunities in establishing an AI safety framework that is both inclusive and internationally aligned.