The Jal Jeevan Mission

• Sharply higher costs amid concerns that some states may have approved inflated work contracts to provide tap water connections to rural households under the Jal Jeevan Mission have led an Expenditure Secretary-led panel to propose a 46 per cent cut in the Centre’s funding assistance to the Jal Shakti Ministry’s demand for four years ending December 2028.
• Over a little more than five years, till December 2024, only 12.17 crore (about 75% of the target) tap connections could be installed. The Jal Shakti Ministry proposed finishing the job of providing the remaining 3.96 crore households with connections over the next four years till December 31, 2028. The Finance Minister has already provided Rs 67,000 crore for the mission in 2025-26.
• In a fresh concept note circulated to various ministries and departments on February 13, 2025, the Jal Shakti Ministry projected the revised outlay for the mission at Rs 9.10 lakh crore, substantially higher than Rs 3.60 lakh crore when it was originally conceived in 2019.
• At first glance, it was the cost estimate of providing the remaining 3.96 crore tap connections that caught the attention of the Department of Expenditure and the Department of Economic Affairs in the Ministry of Finance.
• The Jal Shakti Ministry denied there were any time and cost overruns in its response to the justifications sought by the Finance Ministry.

Facts on JJM :

• The Jal Jeevan Mission, launched by Prime Minister Narendra Modi on August 15, 2019, aimed to provide tap connections to about 16 crore rural households to achieve saturation coverage by December end 2024. But only 75 per cent of the target could be achieved over five years, and the remaining 4 crore tap connections are now proposed to be installed by extending the mission by four years till December 31, 2028.
• In 2019 when the ‘Har Ghar Jal’ programme was launched, the EFC had fixed the Jal Jeevan Mission’s outlay at Rs 3.6 lakh crore against the Jal Shakti Ministry’s demand of Rs 7.89 lakh crore. Information available on the mission dashboard, however, shows states approved schemes worth Rs 8.07 lakh crore during the five years (2019-2024).
• This sharp escalation in costs probably led the EFC to curtail the outlay and reduce the Central share to the mission. Sources said the Jal Shakti Ministry justified the proposed cost of Rs 8.07 lakh crore for the approved scheme (which includes Rs 7.68 lakh crore of works awarded and Rs 38,940 crore of works at award stage) during the EFC meeting.
•  According to the DEA, nearly 12 crore rural households were provided tap connections since 2019. The Centre and states spent Rs 3.60 lakh crore (Centre — Rs 2.08 lakh crore and states — Rs 1.52 lakh crore) for this. Now, the DDWS has projected the mission to cost an additional Rs 5.5 lakh crore (Centre — Rs 2.79 lakh crore, states — Rs 2.71 lakh crore) for providing tap connections to 4 crore households.

Human detection radars, seismic sensors to track tunnels: MHA’s hi-tech security at Pak border

• Amid a spike in encounters with foreign terrorists in Jammu, where over 50 Army personnel have died in the last couple of years, Union Home Minister Amit Shah said earlier this month that the government was deploying an electronic surveillance system along its border with Pakistan to thwart infiltrations.
• Sources said this surveillance system includes an integrated network of human-detection radars, thermal imaging and high-resolution cameras, comprehensive floodlighting along the fences, tech-enabled vigil of riverine stretches and seismic sensors to detect tunnels.
•  Sources in the Ministry of Home Affairs (MHA) said some of these systems have already been installed in certain stretches while some new high-tech equipment and security systems are being experimented with to deal with some of the vulnerabilities on the border with Pakistan.
• According to officials engaged in the project, human-detection radars integrated with cameras and a command and control system are proving to be effective.
• All of this is supplemented by the Comprehensive Integrated Border Management System (CIBMS), which the government fast-tracked after
  the 2016 Pathankot Air Base attack. According to the MHA, two pilot projects covering about 71 kms on India-Pakistan border (10 kms) and India-Bangladesh border (61 kms) of the CIBMS have already been completed.
• According to the MHA, CIBMS involves deployment of a range of state-of-the-art surveillance technologies — thermal imagers, infra-red and laser-based intruder alarms, aerostats for aerial surveillance, unattended ground sensors that can help detect intrusion bids, radars, sonar systems to secure riverine borders, fibre-optic sensors and a command and control system that can receive data from all surveillance devices in real time.
• The government also launched BOLD-QIT (Border Electronically Dominated QRT Interception Technique) under CIBMS on India-Bangladesh border in Dhubri district of Assam, along the riverine border as it was not feasible to construct border fencing..
• “The implementation of these projects will help in integration of manpower, sensors, networks, intelligence and command and control solutions to improve situational awareness at different levels of hierarchy to facilitate prompt and informed decision-making and quick reaction to emerging situations,” an MHA official said

A good monsoon: Despite shrinking share, agri could buttress growth projections.

•  Amid the uncertainties and disruptions resulting from the ongoing global tariff war, India’s growth prospects seem to be at risk. Concerns have been raised over the future trajectory of capital expenditure and private sector investment for India, as the impact of a slowing global economy will make its way to domestic shores, sooner or later.
• Agriculture, which accounts for around 16 per cent share in the Gross Domestic Product (GDP) of the country and supports over 46 per cent of the population, has shown resilience over the last few years, especially in the post-Covid phase.
• The agricultural sector’s annual growth has remained consistently above 4 per cent (except 2.7 per cent in 2023-24) in the last five years starting from the pandemic year 2020-21. This year, too, it is expected to gain with an above-normal rainfall forecast for the four-month long monsoon season in India.
• The monsoon season is likely to bring rainfall at 105 per cent of the long-period average, the India Meteorological Department said in its forecast released Tuesday. This would mark the second consecutive year of ‘above normal’ rainfall for India and the country would receive 100 per cent or more rainfall this season for the fifth time in the last seven years since 2019.
• An above-normal monsoon is expected to spur consumption demand, especially in rural areas. Coupled with lower inflation and softer crude oil prices, it is seen supporting growth. Estimates of agricultural production also suggest a positive outlook for food inflation, as per the latest economic review of the Ministry of Finance.
• As per the second advance estimates, kharif and rabi food grain output is expected to rise by 6.8 per cent and 2.8 per cent, respectively. Among cereals, kharif rice production is projected to grow by 6.6 per cent, while wheat output is expected to reach a record 1,154.3 lakh tonnes.
• However, headwinds from global trade disruptions continue to pose downward risks for India, as was noted by the Reserve Bank of India in its latest monetary policy review on April 9. The real GDP growth for 2025-26, as per the RBI, is projected at 6.5 per cent lower than earlier projection of 6.7 per cent, with Q1 growth seen at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 at 6.3 per cent.
• Most forecasts by economists have slashed India’s growth projections for the ongoing financial year 2025-26 by at least 20 basis points. However, a likely pickup in rural demand with softening food inflation and crude prices have been underlined as the positive factors.

Amid rising energy demand and sluggish domestic output, India’s reliance on oil, gas imports grow further in FY25

·         The India’s dependence on imported crude oil and natural gas grew further in 2024-25 (FY25) as the gap between consumption growth and subdued domestic hydrocarbon production continued to widen.

·         The country’s oil import dependency for the full financial year touched yet another record high, while reliance on imported natural gas was at a four-year high, per latest data from the petroleum ministry.

·         India’s oil import dependency for the financial year ended March was 88.2 per cent, up from 87.8 per cent in the previous fiscal (FY24), per provisional data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC). Import dependency in the case of natural gas was at 50.8 per cent in FY25, up from 47.1 per cent in FY24.

·         India’s energy demand has been growing swiftly, resulting in rising crude oil and natural gas imports. This is fuelled by factors like growing energy-intensive industries, increased vehicle sales, a rapidly expanding aviation sector, growing consumption of petrochemicals, and a rising population.

·         Reliance on imported oil has been growing continuously over the past few years, except in FY21, when demand was suppressed due to the Covid-19 pandemic. The country’s oil import dependency stood at 87.8 per cent in FY24, 87.4 per cent in FY23, 85.5 per cent in FY22, 84.4 per cent in FY21, 85 per cent in FY20, and 83.8 per cent in FY19.

·         India is the world’s third-largest consumer of crude oil and high import dependency makes the Indian economy vulnerable to global oil price fluctuations. It also has a bearing on the country’s trade deficit, foreign exchange reserves, the rupee’s exchange rate, and inflation rate, among others.

·         The government wants to reduce India’s reliance on imported crude oil but sluggish domestic oil output in the face of incessantly growing demand for petroleum products has been the biggest impediment.

·         As for natural gas, the government wants to increase its consumption and share in the country’s primary energy mix to 15 per cent by 2030 from over 6 per cent at present. The rationale behind the push for natural gas, even though it would lead to higher imports of the fuel, is rather simple.

·         India’s crude oil imports rose to 242.4 million tonnes in FY25 from 234.3 million in FY24, while domestic production declined slightly to 28.7 million tonnes from 29.4 million tonnes, per PPAC data. The country’s gross oil import bill for the financial year rose nearly 3 per cent year-on-year to $137 billion.

·         Natural gas is far less polluting than conventional hydrocarbons like crude oil and coal, and is usually cheaper than oil. It is also seen as a key transition fuel. To be sure though, the government has also been pushing India’s oil and gas companies to increase domestic production of natural gas in a bid to keep import dependency levels under check.

·         Natural gas imports rose 15.4 per cent year-on-year to 36.7 billion cubic metres (bcm) in FY25, and cost $15.2 billion against $13.4 billion a year ago. Domestic natural gas output in FY25 was 35.6 bcm, slightly lower than 35.7 bcm in FY24.

·         Total domestic consumption of petroleum products in FY25 was 239.2 million tonnes, of which just 28.2 million tonnes came from domestically produced crude oil, resulting in a self-sufficiency level of 11.8 per cent, per PPAC data. As for natural gas, the total domestic consumption in FY25 was 72.3 bcm, while imports stood at 36.7 bcm.

·         In early 2015, the government had set a target to reduce reliance on oil imports to 67 per cent by 2022 from 77 per cent in 2013-14, but the dependency has only grown since. Cutting costly oil imports continues to be a key focus area for the government, which has taken a number of policy measures to incentivise investments in India’s oil and gas exploration and production sector.

·         Reducing oil imports is also one of the fundamental objectives of the government’s push for electric mobility, biofuels, and other alternative fuels for transportation as well as industries. While there has been a pick-up in electric mobility adoption and blending of biofuels with conventional fuels, it is not enough to offset petroleum demand growth.

How India is looking to deepen local value addition in electronics manufacturing

·         A large talent pool, government subsidies, and geopolitical headwinds that forced several companies to diversify from China – these are some crucial elements that came together for global smartphone companies, like Apple and Samsung to set up production bases in India.

·         After successfully being able to localise smartphone assembly in the country for domestic consumption and some exports, the government has shifted its focus to deepening local value addition in the sector.

·         The result: subsidy schemes that look at incentives on the components level – through the Rs 76,000 crore India Semiconductor Mission for chip fabrication and packaging, and the recently notified Rs 23,000 crore scheme for passive electronic components.

·         Alongside the production linked incentive (PLI) schemes for smartphone and laptop assembly, the government has now launched support for practically all layers of electronics manufacturing, making the sector a crucial growth driver for the Indian economy.

·         The key target: driving up local value addition in the sector, reducing India’s import dependence on countries like China, and creating good quality jobs. Currently, the domestic value addition stands at around 15-20 per cent, with the government hoping to double that in the coming years (China’s current value addition in the sector is around 38 per cent). Worryingly, India’s trade deficit with China reached an all-time high in 2024-25, nearing $100 billion.

·         Earlier this month, the IT Ministry notified the Rs 22,919 crore incentive scheme for electronics components, which takes the baton forward from its two PLI schemes, which largely focus on the relatively easy assembly of electronics items like smartphones and computers.

·         Under the new scheme, spread over six years, the government is targeting localising manufacturing of components like display modules, sub assembly camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites, among others.

·         These are used in gadgets like smartphones and laptops, and appliances like microwave ovens, refrigerators and toasters, among others. So far, as smartphone and laptop assembly has grown in the country, so has the country’s dependence on China from where companies sourced internal components. The government wants to plug that gap.

·         It is hoping that at least 91,600 direct jobs will be created as part of the scheme, and has tied participating entities’ yearly subsidies to the number of jobs they create. The scheme is expected to generate production of Rs 4.56 lakh crore and bring in incremental investment of Rs 59,350 crore.

·         The smartphone PLI scheme has been among the most successful of the 14 such programmes launched in 2020 for several sectors. The IT hardware PLI, initially a laggard, got a booster shot from the government in 2023, with increased allocation of Rs 17,000 crore. Under these schemes, the government offers an incentive, which is linked to incremental sales.

Why food inflation is softening

·          The last El Niño – from around April 2023 to May 2024 – was not only a long, but also strong event. The long and strong El Niño was responsible for large parts of India not getting adequate rainfall during the 2023-24 monsoon (June-September), post-monsoon (October-December) and winter (January-February) seasons. It was accompanied by the winter’s delayed onset and warmer-than-usual temperatures, culminating in the heat waves from the second half of March through mid-June 2024.

·         The end-result was 2023-24 turning out to be a not-so-great agricultural year, with subpar kharif (June-August sown and October-December harvested) as well as rabi (October-December sown and March-May harvested) crops.

·         Its effects were also felt in food prices. The annual rise in the official consumer food price index averaged over 8.5% between July 2023 and December 2024. That made it one of the country’s longest episodes of food inflation in recent times.

·         Simply put, El Niño – an abnormal warming of the central and eastern equatorial Pacific Ocean waters, leading to enhanced evaporation and cloud-formation activity in western Latin America, the Caribbean and the US Gulf Coast, and correspondingly depriving Southeast Asia, Australia and India of convective currents – wreaked havoc on the country’s farm output, pushing up food prices and crimping household spending.

·         Those pressures have subsided since the start of this calendar year. Retail food inflation was at 2.7% year-on-year in March, the lowest since November 2021.The reason: An agriculture production recovery in 2024-25 on the back of a good monsoon, sans El Niño or other weather shocks.

·         If anything, there was a mild La Niña or a cooling of SSTs in the central and eastern tropical Pacific Ocean.

·         La Niña does the opposite of El Niño: As the trade winds blowing west along the equator carry warm water from South America towards northern Australia and Indonesia, they cause increased cloudiness and rainfall over this region – whose effects may percolate to India too.

·         The real relief would be in wheat, the stocks of which in government godown – at 7.5 million tonnes (mt) on April 1, 2024 – were the lowest for this date since 2008.
The 2023-24 crop, harvested and marketed in April-June 2024, wasn’t good in central India, because of the winter’s late arrival followed by foggy weather and lack of sunshine in January.

·         While yields in north and northwest India were above par, the poor harvests in Madhya Pradesh (MP), Gujarat and Maharashtra dragged down overall production.

·         The bumper wheat harvests of 2024 and 2025, especially in Punjab and Haryana, have been attributed to moderate weather and also the cultivation of new high-yielding varieties such as HD-3386, DW-327, PBW-826 and PBW-872. “These varieties have bolder grains.

·         The average weight of thousand grains from them is 50-54 grams, as against 40-44 grams for the older varieties,” Singh claimed.

·         Last week, the India Meteorological Department (IMD) forecast an “above normal” southwest monsoon, with rainfall during the upcoming season (June-September) likely at 105% of the long period average for this four-month period.
If the forecast materialises – the IMD expects ENSO-neutral conditions (i.e. neither El Niño nor La Niña) – that should enable a further cooling of food inflationary pressures.

How India is looking to deepen local value addition in electronics manufacturing

·         A large talent pool, government subsidies, and geopolitical headwinds that forced several companies to diversify from China – these are some crucial elements that came together for global smartphone companies, like Apple and Samsung to set up production bases in India.

·         After successfully being able to localise smartphone assembly in the country for domestic consumption and some exports, the government has shifted its focus to deepening local value addition in the sector.

·         The result: subsidy schemes that look at incentives on the components level – through the Rs 76,000 crore India Semiconductor Mission for chip fabrication and packaging, and the recently notified Rs 23,000 crore scheme for passive electronics components.

·         Alongside the production linked incentive (PLI) schemes for smartphone and laptop assembly, the government has now launched support for practically all layers of electronics manufacturing, making the sector a crucial growth driver for the Indian economy.

·         The key target: driving up local value addition in the sector, reducing India’s import dependence on countries like China, and creating good quality jobs. Currently, the domestic value addition stands at around 15-20 per cent, with the government hoping to double that in the coming years (China’s current value addition in the sector is around 38 per cent). Worryingly, India’s trade deficit with China reached an all-time high in 2024-25, nearing $100 billion.

The electronics components manufacturing scheme

·         Earlier this month, the IT Ministry notified the Rs 22,919 crore incentive scheme for electronics components, which takes the baton forward from its two PLI schemes, which largely focus on the relatively easy assembly of electronics items like smartphones and computers.

·         Under the new scheme, spread over six years, the government is targeting localising manufacturing of components like display modules, sub assembly camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites, among others.

·         These are used in gadgets like smartphones and laptops, and appliances like microwave ovens, refrigerators and toasters, among others. So far, as smartphone and laptop assembly has grown in the country, so has the country’s dependence on China from where companies sourced internal components. The government wants to plug that gap.

·         It is hoping that at least 91,600 direct jobs will be created as part of the scheme, and has tied participating entities’ yearly subsidies to the number of jobs they create. The scheme is expected to generate production of Rs 4.56 lakh crore and bring in incremental investment of Rs 59,350 crore.

·         “Components import will reduce after this scheme. We need to come out of the import substitution mindset and go forward with export led promotion. Viability comes after large scale manufacturing. Electronics manufacturing is around $120 billion right now and we are targeting that to grow to $500 billion in the coming years,” Union IT Minister Ashwini Vaishnaw said earlier.

How the PLI schemes are performing, what’s next

·         The smartphone PLI scheme has been among the most successful of the 14 such programmes launched in 2020 for several sectors. The IT hardware PLI, initially a laggard, got a booster shot from the government in 2023, with increased allocation of Rs 17,000 crore. Under these schemes, the government offers an incentive, which is linked to incremental sales.

·         As of February 2025, the PLI scheme for smartphones has generated:

·         Cumulative investment of Rs 10,905 crore

·         Cumulative production of Rs 7,15,823 crore

·         Cumulative exports of Rs 3,90,387 crore

·         Direct jobs for 1,39,670 people

·         In the same time frame, the PLI scheme for laptops and computers has generated:

·         Cumulative production of Rs 10,365 crore

·         Cumulative investment of Rs 522 crore

·         Direct employment for 5,132 people.

 ‘Trump has killed the WTO; mounted a challenge to rule-based international trading’:

·         US President Donald Trump has sparked off a global trade war by raising tariff walls on imports. While we are in the middle of a 90-day pause on the implementation of reciprocal tariffs where other countries are concerned — except a universal 10 per cent import duty rate — the US has imposed up to 245 per cent tariff on China with immediate effect. The latter retaliated by imposing 125 per cent tariff on US imports.

·         Trump’s decision to replace a rule-based global trading regime that was put in place with the setting up of the World Trade Organization by a regime of bilateral trade negotiations will be damaging for the American and the world economy.

·         It’s certainly not a good policy either for the US or the world. It was after a great deal of effort that the international community agreed to a proper rule-based international trading order.

·         For six years, trade talks went on between the countries of the world under the Uruguay round and after that there was a meeting of all the countries in Marrakesh, where the decision was taken to form the World Trade Organization (WTO).

·         Before that there was GATT, or General Agreement on Tariffs and Trade, which was also continuously trying to make the international trading order as rule-based as possible. There were difficulties, especially between the developed and the developing countries, where the demands were dissimilar and there was conflict of interest on various issues — and mainly on agriculture and intellectual property rights. It was after a great deal of effort that the world was able to agree on a workable solution.

·         This was finally arrived at in Marrakesh in Morocco in 1994, and the decision was taken to form the WTO. This agreement came into effect from January 1, 1995, as far as I remember. After that, all the trade disputes were being referred to the WTO, and the adjudicating body of the WTO used to decide the matter.

·         Now, the first challenge that Trump has mounted is to this rule-based international trading arrangement. For all practical purposes he has killed the WTO, which is playing no role.

·         And all countries of the world, in particular the major trading partners of the US, are either negotiating a trade deal with the US at a bilateral level, like India is doing, or standing up to this unilateral action, like China or Canada.

·         So, Trump has made a major mistake by challenging a global order that has been in existence for 30 years or more. He is out to make the international order based on consensus a thing of the past and believes in unilateralism. He is looking at bilateral trade balance.

·         Every country has provision for anti-dumping duty, and if you feel that any country is dumping something in your country, you can legitimately levy anti-dumping duty.

·         There were options before every country. One option was that if you impose higher tariffs on us, we will reciprocate by imposing higher tariffs on you.

·         The second way was that we will go out in the world and form alliances against you. The third was to negotiate . India has opted for the third option.

Unlocking $25+ Billion Exports in India’s Hand & Power Tools Sector

·         There The tools industry—comprising hand and power tools—is a foundational pillar of the global manufacturing ecosystem, enabling production across multiple sectors such as construction, automotive, electronics, and infrastructure. In April 2025, NITI Aayog and the Foundation for Economic Development jointly published the report “Unlocking $25+ Billion Exports: India’s Hand & Power Tools Sector”, laying out a comprehensive roadmap to scale up India’s global exports from the current $1 billion to over $25 billion by 2035.

·         India’s current export footprint in this sector remains modest, yet it possesses key strengths—low-cost labor, strategic trade positioning, and a growing manufacturing base—that offer significant potential to transform the nation into a competitive global player.

 Overview

·         Global Market Size (2022): ~$100 billion

·         Hand Tools: $34 billion

·         Power Tools: $63 billion

·         Projected Market Size (2035): $190 billion (CAGR: 53%)

·         Hand Tools: $60 billion

·         Power Tools: $134 billion

·         India’s exports in 2025:

·         Hand Tools: $600 million (1.8% global share)

·         Power Tools: $425 million (0.7% global share) 

Targets by 2035 for India:

·         Hand Tools: 25% market share → $15 billion exports

·         Power Tools: 10% market share → $12 billion exports

·         Total Export Opportunity: Over $25 billion

·         Employment Generation: 3.5 million direct and indirect jobs

India’s Current Export Profile

Hand Tools

·         India’s hand tools sector has developed a robust MSME ecosystem with key manufacturing clusters in Punjab (Jalandhar, Ludhiana), Maharashtra (Mumbai, Nagpur), and Rajasthan (Nagaur). Common exports include wrenches, pliers, screwdrivers, and hand saws. The sector’s success is linked to labor-intensive processes, localized supply chains, and historical evolution post-Independence.

Power Tools

·         The country currently lacks a comprehensive electronic manufacturing ecosystem for power tools, which require precision components like motors and batteries

·         A Existing Government Support Mechanisms

·         Remission of Duties and Taxes on Exported Products (RoDTEP): RoDTEP provides rebates to exporters for taxes and duties on exported goods to help make Indian exporters more competitive in international markets. Under this scheme, hand tools exporters get rebates of 1.1% as a percentage of their Free on Board (FOB) value, and power tools get rebates of 0.9% as a percentage of their FOB value.

·         Duty Drawback Scheme: Duty Free Import Authorisation (DFIA) allows duty-free import of inputs but on a post export basis only. Inputs imported under this scheme are exempted of the Basic Customs Duty only. To qualify, the inputs must be listed under the Standard Input Output Norms (SION), and a minimum value addition of 20% must be achieved. Under this scheme, manufacturers of hand and power tools are eligible for duty drawbacks of 1.5% to 2% on their input costs, as per the Duty drawback rates, 2023.

Strategic Policy Recommendations

1. Create World-Class Clusters for Hand Tools

·         Goal: 3–4 clusters spanning ~4000 acres by 2035

·         Estimated Investment: ₹12,000 crore (Government) + ₹45,000 crore (Industry)

·         Cluster Features:

·         Plug-and-play industrial infrastructure

·         Worker housing, R&D centers, testing labs

·         Convention facilities, 24x7 power and water supply

2. Structural Reforms

·         Reduce import duties and rationalize Quality Control Orders (QCOs).

·         Reform Export Promotion Capital Goods (EPCG) scheme to ease compliance.

·         Align labor laws with global standards (e.g., 300 hours quarterly overtime).

·         Liberalize Floor Area Ratio (FAR) and ground coverage norms.

·         Ensure 24x7 low-cost electricity and improve logistics

3. Bridge Support (Contingent)

·         If reforms are delayed, bridge support worth ₹5,800 crore over 5 years is recommended.

·         Hand Tools: ₹3,450 crore

·         Logistics: ₹450 crore

·         Interest Subvention: ₹700 crore

·         Competitiveness Incentive: ₹700 crore

·         Capital Subsidy: ₹1,600 crore

·         Power Tools: ₹2,230 crore

·         Interest Subvention: ₹430 crore

·         Competitiveness Incentive: ₹1,500 crore

·         India stands at a pivotal juncture in its industrial transformation. The tools sector, though currently underrepresented in global trade, offers a rare and time-sensitive opportunity to reposition India as a reliable manufacturing alternative to China. The roadmap presented by NITI Aayog focuses on leveraging India’s inherent strengths—abundant labor, a rising manufacturing base, and sectoral synergies—while urgently addressing its structural weaknesses.

12% safeguard duty on certain steel products for 200 days

·         India has imposed a 12% safeguard duty on certain steel products for 200 days to protect domestic manufacturers from a surge in imports. This decision follows an investigation by the Directorate General of Trade Remedies (DGTR), which found a sharp increase in steel imports, particularly from China, Japan, South Korea, and Vietnam.

Key Details of the Safeguard Duty

·         The duty applies to five steel product categories, including hot rolled coils, cold rolled sheets, and metallic coated steel.

·         Imports priced below $675–$964 per tonne will attract the safeguard duty.

·         The measure aims to prevent serious injury to domestic producers and ensure fair competition.

Why Was This Duty Imposed?

·         Imports surged from 2.29 million tonnes (2021-22) to 6.61 million tonnes during the investigation period.

·         Excess capacity in exporting countries led to low-priced imports, affecting Indian steelmakers.

·         The DGTR warned that delaying safeguard measures could cause irreparable damage to the domestic industry.

Impact on the Steel Industry

·         Boost for Domestic Producers: The duty provides relief to Indian steelmakers, particularly small and medium-sized enterprises, who have struggled with rising imports.

·         Market Stability: The measure is expected to restore fair competition and strengthen investor confidence in India''s steel sector.

·         Alignment with Atmanirbhar Bharat: The policy supports India''s goal of self-reliance in steel production and reducing dependence on foreign imports.

·         This move aligns with India''s Atmanirbhar Bharat vision, aiming to strengthen domestic steel production and reduce reliance on foreign imports

·         There are three primary types of trade duties that countries impose to protect domestic industries: Safeguard Duty, Anti-Dumping Duty, and Countervailing Duty. Each serves a different purpose and has distinct long-term impacts.

1. Safeguard Duty

·         Purpose: Imposed when there is a sudden surge in imports that threatens domestic industries.

·         Scope: Applies uniformly to all exporting countries.

·         Trigger: Based on volume increase, not pricing or unfair trade practices.

·         Duration: Initially 200 days, extendable up to 4 years with a possible 1-year extension.

Long-Term Impact:

·         Protects domestic industries from temporary import shocks.

·         Encourages local production and investment.

·         Can lead to higher prices for consumers if domestic supply is insufficient.

2. Anti-Dumping Duty

·         Purpose: Imposed when foreign exporters sell goods at a price lower than their domestic market price, harming local industries.

·         Scope: Targets specific countries engaged in dumping practices.

·         Trigger: Based on price comparison between export price and normal value in the exporter’s home market.

·         Duration: Typically 5 years, subject to review.

·         Long-Term Impact:

·         Prevents unfair competition and protects domestic manufacturers.

·         Encourages fair pricing in international trade.

·         May lead to trade disputes with affected countries.

3. Countervailing Duty (CVD)

·         Purpose: Imposed when foreign governments subsidize their industries, allowing them to sell products at artificially low prices.

·         Scope: Targets specific countries providing subsidies.

·         Trigger: Based on evidence of subsidies and their impact on domestic industries.

·         Duration: Usually 5 years, subject to review.

·         Long-Term Impact:

·         Helps domestic industries compete fairly.

·         Discourages foreign subsidies that distort trade.

·         Can lead to retaliatory measures from affected countries.

·         Overall Long-Term Effects

·         Market Stability: These duties help stabilize domestic industries by preventing unfair competition.

·         Trade Relations: They can strain diplomatic ties, leading to retaliatory tariffs or disputes.

·         Consumer Prices: While they protect local businesses, they may also lead to higher prices for imported goods.

·         Industrial Growth: Encourages domestic production and investment in affected sectors.

·         India and the World Trade Organization (WTO) are currently navigating several trade-related challenges. Here are some of the most pressing issues:

1. WTO’s Dispute Settlement Crisis

·         The WTO’s Appellate Body, which resolves trade disputes, has been non-functional since 2019 due to the U.S. blocking judge appointments. This has weakened the enforcement of trade rules, affecting India’s ability to challenge unfair trade practices.

2. Agricultural Subsidies & Public Stockholding

·         India has been advocating for permanent solutions on public stockholding for food security, which allows governments to buy and store food grains for welfare programs. Developed nations argue that India’s subsidies distort global trade.

3. Digital Trade & E-Commerce Regulations

·         WTO lacks binding rules on digital trade, e-commerce taxation, and data flows. India has taken a cautious stance, opposing premature liberalization that could impact domestic businesses.

4. Global Trade Slowdown & Tariff Uncertainty

·         WTO forecasts a 0.2% decline in global trade in 2025, with North American exports expected to drop by 12.6%. India is concerned about rising protectionism and uncertainty in U.S. tariff policies, which could affect its exports.

5. Fisheries Subsidies Negotiations

·         India is pushing for special exemptions for developing nations in WTO’s fisheries subsidies agreement. The goal is to protect small-scale fishers while addressing concerns about overfishing.

6. Climate-Linked Trade Policies

·         WTO members are debating carbon border taxes and green subsidies. India opposes measures that could disadvantage developing economies, arguing for a fair transition to sustainable trade.

India’s Position

·         India supports a rules-based multilateral trading system but insists that WTO reforms must prioritize developing nations. The country is actively negotiating to protect its domestic industries while ensuring fair global trade practices