India’s Path to a High-Income Economy

Source: IE 

Why in News?

A World Bank report titled “Becoming a High-Income Economy in a Generation” highlights that India must achieve an average annual growth rate of 7.8% over the next 22 years to reach high-income country (HIC) status by 2047.  

• The report stresses that ambitious reforms and their effective implementation will be necessary to meet this goal. 

What are the Key Highlights of the Report on Becoming a High-Income Economy? 

• India’s Economic Journey: India's share in the global economy has doubled from 1.6% in 2000 to 3.4% in 2023, making it the 5th largest economy in the world. 
  • For two decades before the pandemic, India's economy grew at an average annual rate of 6.7%, second only to China among major economies. 
• 2047 High-Income Economy Goal: India aspires to become a HIC by 2047.  
  • To achieve this, its gross national income (GNI) per capita would have to increase by nearly 8 times from USD 2,540 in 2023 (currently India is in lower-middle-income category). 
    • In 2023, the World Bank classified countries with GNI per capita above USD 14,005 as high income and those between USD 4,516– USD 14,005 as upper middle income. 
• Growth Scenarios: The report outlines three possible scenarios for India’s growth trajectory. 

Scenario	Growth Rate (Real GDP)	Outcome
Slow Reforms	Below 6%	India remains upper-middle income, falls short of HIC.
Business as Usual	6.60%	India improves but does not reach high-income status.
Accelerated Reforms	7.80%	India will become a high-income country by 2047.

• However, only few countries (Chile, Romania, Poland, Czech Republic, and Slovakia) have transitioned to high-income status within 20 years, while nations like Brazil, Mexico, and Turkey remain stuck in the upper-middle-income category, making this an ambitious but achievable target. 

What are the Key Challenges in Achieving HIC Status? 

• Declining Investment Rate: Investment-to-Gross Domestic Product (GDP) peaked at 35.8% in 2008 but fell to 27.5% in 2024. 
• FDI Challenges: India’s FDI-to-GDP ratio is just 1.6%, far lower than Vietnam (5%) and China (3.1%). 
• Declining Labor Force Participation: India’s labor force participation rate (LFPR) is 55% in 2023, lower than most emerging economies (China 65.8% in 2023). 
• Women in Workforce: Female labor force participation (FLFP) has improved to 41.7% in 2023-24 (global benchmarks is over 50%). 
• Issues in Job Creation: 45% of India’s workforce is still in agriculture (disguised unemployment), a sector with low productivity. 
  • In contrast, the share of manufacturing in total employment was around 11% and modern market services accounted for only 7%, much lower than in East Asian economies. 
  • In 2023-24, 73% of India’s workforce is in informal jobs, compared to just 32.7% in other emerging economies. 
• Declining Trade Openness: India’s exports and imports make up 46% of GDP (2023), down from 56% in 2012. 
• Low Global Value Chain (GVC) Participation: India has made significant gains in mobile phone exports, but high tariffs and non-tariff barriers are limiting broader trade expansion.  
  • India's services sector (IT & BPO) is strong, but manufacturing lags. 

What are the Key Reforms Needed for Achieving HIC Status? 

• Boosting Investment: Increase investment rate from 33.5% to 40% of GDP by 2035. Strengthen financial sector regulations for better credit flow.
• Boosting Credit Access & Debt Resolution: Improve Micro, Small and Medium Enterprises (MSME) access to formal credit. Strengthen mechanisms for bankruptcy resolution and bad debt recovery. 
• Creating More and Better Jobs: Raise labor force participation closer to economies like Vietnam (73%) and the Philippines (60%).  
  • Encourage private sector investment in job-rich sectors like agro-processing, hospitality, transportation, and care economy. 
  • Expand skilled workforce and improve access to finance. Strengthen modern manufacturing and high-value services. 
• Boosting Global Trade Competitiveness: Invest in export-oriented sectors and integrate into GVCs. 
• Formalizing the Workforce: Simplify labor laws to reduce informal employment and promote better wage conditions. 
• Strengthening Human Capital and Innovation: Enhance secondary school enrollment and vocational training to match industry needs. 
  • Expand R&D investments in key sectors like Artificial Intelligence, Biotechnology, and clean energy. 

Drishti Mains Question:  What key reforms are required for India to transition to a high-income economy?

Enhancing India's Agri-Exports

Source: IE 

Why in News? 

India’s agricultural exports grew by 6.5% to USD 37.5 billion (Apr-Dec 2024), while imports rose by 18.7% to USD 29.3 billion that has reduced the agricultural trade surplus. 

What are the Trends in India’s Agricultural Exports? 

• Shift in Cotton Trade: India is now a net importer of cotton, reversing its earlier status as an exporter. 
  • Once the 2^nd-largest exporter after the US, India’s cotton exports fell from USD 4.3 billion in 2011-12 to USD 1.1 billion in 2023-24. 
• Shrinking Agricultural Trade Surplus: India’s agricultural trade surplus peaked at USD 27.7 billion in 2013-14, fell to USD 16 billion in 2023-24. 
• Impact of Global Commodity Prices: Between 2013-14 and 2019-20, falling global food prices reduced India’s agri-export competitiveness.  
  • Post Covid-19 and the Russia-Ukraine war, prices surged, boosting exports to USD 53.2 billion in 2022-23. 
• Major Export Commodities:  
  • Marine Products: Export of marine products, India's leading agri-export, declined in 2023-24, with the downward trend continuing in 2024-25. 
  • Sugar & Wheat: Sugar and wheat exports fell in 2023-24 due to government restrictions aimed at controlling domestic food inflation. 
  • Rice: Rice exports, especially non-basmati, remained strong despite a ban on white rice and export duty on parboiled rice. 
    • Basmati rice, spices, coffee, and tobacco exports are set to reach record highs in 2024-25. 
  • Cash Crops: Coffee and tobacco exports surged due to adverse weather affecting key producers like Brazil, Vietnam, and Zimbabwe. 
  • Others: India has also consolidated its position as the world’s leading exporter of chilli, mint products, cumin, turmeric, coriander, fennel, etc. 
• Major Import Commodities:  
  • Edible Oil: Edible oil imports in 2024-25 are projected to be the highest mainly due to price hikes caused by the Russia-Ukraine war. 
  •   Pulses imports averaged USD 1.7 billion (2018-23) due to higher domestic pulses production but are expected to surpass USD 5 billion ( 2024-25) due to low production in  2023-24. 
• Key Destinations:  
  • Exports: 
    • Asia: In 2023, India exported USD 48 billion in agri-products, with the Global South (75%) and Asia (58%) as key markets. 
      • China and the UAE each imported USD 3 billion each in Indian agri-products, while Vietnam imported USD 2.6 billion. 
    • Africa: Africa accounted for 15% of India’s total agri exports. 
    • US: US accounts for 13.4% of Indian agri exports primarily consisting of rice (Basmati & Non-Basmati), sesame seeds, and fresh fruits. 
    • Europe: Europe accounts for 12.6% of Indian agri exports primarily consisting of tobacco, fresh fruits and ornamental plants. 
  • Imports:  
    • Global South: The Global South supplies 48% of India’s agri-imports, led by Brazil, China, Mexico, Argentina and Indonesia. 
    • Developed Economies: Top three suppliers are the US, the Netherlands, and Germany. 
• Agricultural Start-ups: 

Click Here to Read: What is Agricultural Export Policy?

What are Challenges in India's Agricultural Exports? 

• Non-Tariff Barriers (NTBs): Developed countries impose stringent Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) creating trade barriers for Indian agricultural exports. E.g., 
  • India's basmati rice and tea exports have faced European bans over pesticide contamination. 
  • Japan has banned imports of cut flowers from India over zero-tolerance pest rules in floricultural products, although such pests are found in Japan. 
• Unfair Level Playing Field: Developed nations’ heavy farm subsidies to their farmers and high tariffs on Indian agri exports create a disadvantage for Indian farmers.  
  • The US provides USD 61,286 per farmer annually, while India gives only USD 282, lowering global prices and hurting Indian farmers. 
• Challenges to India's MSP Policy: Developed countries like the US, Canada, and Australia challenge India’s MSP at the WTO, claiming it exceeds the 10% limit (Amber box) under the AoA, risking dispute proceedings. 
  • India can provide uncapped input subsidies under the AoA’s ‘Development Box’ for developing nations, but developed countries seek limits that can threaten small farmers' livelihoods. 
• Challenges from FTAs: India's FTAs with countries like Singapore, ASEAN, and Japan lower tariffs on imported agri-products, hinders farmers' adoption of new technologies and investment in infrastructure, reducing global competitiveness. 
• Frequent Export Restrictions: India’s export restrictions to control price shocks deter foreign importers and domestic investment in post-harvest management and food processing. 
  • Frequent onion bans disrupt supply chains and reduce India’s reliability in the global market, prompting import partners to seek alternatives.

Way Forward 

• Establish Market Intelligence Units: The government should set up external market intelligence units to provide real-time data on international export demand, helping farmers and exporters meet global market needs.  
• Support Agri-Tech Startups: India’s vast agriculture sector provides startups opportunities to scale, expand, and innovate to maximize trade potential. 
• Diversify Export Markets: India should explore new products and markets, prioritizing dairy, poultry, vegetables, and fruits in Africa, Southeast Asia, and the Middle East. 
  • With rising post-pandemic demand for superfoods (e.g., millets) and herbal products, India should promote their cultivation and processing. 
• Compliance with SPS Measures: India should educate agri-value chain participants (both upstream and downstream) on SPS compliance and develop processing infrastructure to boost quality and global competitiveness. 
  • Cooperatives and FPOs educate farmers on SPS regulations, food safety, and best practices through workshops on pest control, residue management, and hygiene. 
• Develop Agro-Climatic Clusters: Identifying suitable agro-climatic zones for cultivating export-oriented crops will optimize productivity and quality.  
  • Microsoft’s Project Farm Vibes (PFV) can boost crop yields by 40% while reducing resource consumption. 
• Establish a Credible Trade Policy: India needs to streamline its agricultural trade policy to minimize the frequent imposition of export restrictions. 

Drishti Mains Question:  What steps should India take to increase its share in global agricultural trade?

SC Upholds Disability Rights as Fundamental

Source: ET 

Why in News 

The Supreme Court has ruled that visually impaired candidates can participate in judicial service exams, affirming that the right against disability-based discrimination under the Rights of Persons with Disabilities (RPwD) Act, 2016, should be treated as a fundamental right. 

What is the SC Ruling on Disability Rights in Judicial Services? 

• Striking Down Discriminatory Provisions: The recent ruling came while deciding petitions concerning the Madhya Pradesh Judicial Service Examination Rules, 1994, and Rajasthan Judicial Service Rules, 2010, aligning them with the RPwD Act. 
  • Rule 6A of the MP Judicial Service Rules, 1994 was struck down as it excluded visually impaired candidates despite their educational qualifications. 
• Recognition of Disability Rights: Any exclusion of visually impaired candidates from judicial services violates the Constitutional right of equality (Article 14) and non-discrimination (Article 15). 
• Affirmative Action: The Court ruled that the State must adopt a rights-based approach rather than a charity-based one, ensuring equal access to employment. 
  • The judgment reinforced that reasonable accommodations (bench cited the Indra Sawhney judgment, directing a separate cut-off for visually impaired candidates in the selection process), as mandated by United Nations Convention on the Rights of Persons with Disabilities (UNCRPD), and the RPwD Act, 2016, must be provided to persons with disabilities(PwDs). 
  • It allowed relaxations in eligibility criteria, similar to SC/ST candidates, when an adequate number of PwD candidates are not available. 

What is the Status of PwDs in India? 

• About: As per the 2011 Census, persons with disabilities make up 2.21% (2.68 crore) of the total population. 
  • As per RPwD Act, 2016, there are 21 recognized types of disabilities, including Visual Impairment, Hearing Impairment, Speech & Language Disability, Intellectual Disability, Multiple Disabilities, Cerebral Palsy, and Dwarfism, among others. 
• Constitutional Provisions for PwDs: 
  • Fundamental Rights: Article 14, Article 19 and Article 21. 
  • DPSP: Article 41 (Advocates for public assistance in cases of unemployment, old age, sickness, and disability). 
  • Responsibilities of Panchayats and Municipalities: 
    • 11^th Schedule: Focuses on social welfare, including that of persons with disabilities (Entry 26 of Article 243-G). 
    • 12^th Schedule: Ensures the protection of weaker sections, including persons with disabilities (Entry 9 of Article 243-W). 
• Laws Related to Disability Rights: 
  • RPwD Act, 2016: It aims to ensure equal opportunities, protect rights, and enable the full participation of persons with disabilities. 
  • National Trust Act, 1999: This Act established a national body to address the welfare of persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities, among other matters. 
  • Mental Health Care Act, 2017: This Act protects the rights and dignity of persons with mental illness. 

What are the Challenges Faced by PwDs in India? 

• Social Barriers: PwDs often face challenges in securing employment, education, and adequate income, which hinders their ability to fully exercise their rights. 
  • Stereotypes, stigma, prejudice, and discrimination limit social integration and create a cycle of exclusion and isolation. 
• Transportation Barriers: According to the World Report on Disability, inaccessibility in transportation systems, the built environment, significantly limits the ability of PwDs to function independently in society.  
• Communication Barriers: PwDs related to hearing, speaking, reading, or writing face difficulties in effective communication due to non-effective communication channels such as absence of non-verbal communication skill. 
• Policy and Programmatic Barriers: Challenges such as inconvenient scheduling and lack of accessible equipment hinder the delivery of essential public healthcare programs. 
• Intersectional Marginalization: Women with disabilities face dual discrimination based on gender and disability, limiting their access to education, employment, and healthcare. 
  • Among the total disabled population 44% are females (Census 2011), mostly live in rural areas and face greater exclusion. 

Way Forward 

• Effective Mainstream Policies and Services: Stakeholders must ensure equal participation of PwDs in general public activities and services. 
  • Increased investment is needed in rehabilitation, and support services. For example, assistive equipment like wheelchairs, hearing aids, and white canes enhance PwDs' independence. 
• Enhance Human Resource Capacity: The Rehabilitation Council of India (RCI) should accelerate the training process to effectively regulate and enhance the competency of professionals engaged in disability-related services. 
  • Japan’s Dawn Cafe employs disabled staff to remotely control robot waiters, creating inclusive job opportunities. India should adopt similar practices to enhance employment accessibility for persons with disabilities. 
• Increase Public Awareness of Disability: Raising public awareness can challenge negative perceptions and break down social and attitudinal barriers.  
  • Educational institutions should foster inclusivity and diversity by ensuring that the language skills needed by individuals with disabilities are also taught to able-bodied individuals, facilitating inclusive communication. 
• Improve Disability Data Collection: Better data collection, segmented by age, sex, and socio-economic status, will improve understanding of barriers faced by PwDs. 

Drishti Mains Question:  The SC ruling on the right against disability-based discrimination marks a progressive step towards inclusivity in public services. Discuss the various challenges faced by PwDs and suggest measures for further reforms.

12th Regional 3R and Circular Economy Forum

Source: PIB 

Why in News? 

India (Jaipur, Rajasthan) hosted the 12th Regional 3R and Circular Economy Forum in Asia and the Pacific emphasising on sustainable waste management and circular economy. 

• A circular economy focuses on durable, reusable, and recyclable products, ensuring materials are continuously repurposed, remanufactured, or used for various purposes. 

What are the Key Highlights of the 12th Regional Forum Meeting? 

• About: It is a regional platform that promotes 3R (Reduce, Reuse, Recycle) principles and circular economy practices across the Asia-Pacific region. 
  • It brings together policymakers, industry leaders, researchers, and partners to advance resource efficiency strategies. 
• Historical Context: It was launched in 2009 to promote 3R principles and resource efficiency.  
  • The Hanoi 3R Declaration (2013-2023) set 33 voluntary goals for a resource-efficient and circular economy. 

 

• Theme: Realizing Circular Societies Towards Achieving SDGs and Carbon Neutrality in Asia-Pacific. 
• Objectives: Discuss and agree a voluntary, non-binding “3R and Circular Economy Declaration (2025-2034)” for a resource-efficient, low-carbon, and resilient Asia-Pacific. 
  • Discuss and pave way towards realization of a Circular Economy Alliance Network (CEAN) towards Zero Waste Cities and Societies. 
  • Discuss circular economy strategies to achieve net-zero targets and SDGs. 
• Key Announcements:  
  • P-3 (Pro Planet People) Approach: India’s PM advocated the P-3 approach for sustainable lifestyles and eco-friendly behavior.  
  • Cities Coalition for Circularity (C-3): The C-3, a global alliance for city collaboration, knowledge-sharing, and private sector partnerships, was launched. 
  • CITIIS 2.0: A key MoU for CITIIS 2.0 (City Investments to Innovate, Integrate and Sustain) was signed that focuses on integrated waste management and climate action.

Click Here to Read: What is a Circular Economy?

Wallace Line

Source: TH 

Why in News? 

In the 19^th century, Alfred Wallace observed a change in species composition between Asia and Australia. This difference in species composition later developed as the Wallace Line. 

What is the Wallace Line? 

• About: The Wallace Line is an imaginary boundary separating the distinct faunal regions of Asia and Australia.  
  • It marks a major biogeographical division with stark species differences on either side of the line. 
• Geographical Location: It runs through the Makassar Strait, which lies between the east coast of Borneo and the western coast of Sulawesi.  
  • It extends between Bali and Lombok, separating the Sunda and Sahul continental shelves. 

 

• Species Distribution: West of the Wallace Line (Bali, Borneo, Java, and mainland Asia), fauna consists of monkeys, apes, rhinos, squirrels, tigers, and hornbills, which are characteristic of the Asian ecosystem. 
  • East of the Wallace Line (Lombok, Sulawesi, Timor, and Australia), fauna includes tree kangaroos, cockatoos, and honeyeaters, linked to the Australian ecosystem. 
• Wallacea Region: The region between the Wallace Line and the Weber Line (another faunal boundary to the east) is known as Wallacea and includes islands like Sulawesi, Flores, Lombok, and Timor. 
  • Isolated Wallacean islands have lower biodiversity than nearby continents but host unique species like the Komodo dragon, babirusa, and giant bees. 
  • Sulawesi is home to both Asian species like tarsiers and anoas, and Australian marsupials like the dwarf cuscus. 
• Reason for Formation: 
  • Continental Drift: About 85 million years ago, Australia separated from Antarctica and drifted northward, isolating species and driving independent evolution. 
  • Deep Oceanic Barriers: It aligns with deep waters like the Makassar Strait, which remained submerged even during ice ages, limiting species movement between Asia and Australia. 
  • Geological Climate Change: Asian and Australian species, suited to their respective climate, struggled to migrate either side of the line.

Crop Contingency Plan for Kashmir

Source: TH 

The Sher-e-Kashmir University of Agricultural Sciences and Technology (SKUAST) has devised a Crop Contingency Plan to tackle the drought-like conditions expected in Kashmir due to an 80% rainfall deficit in winter 2024.  

• Key Components of Crop Contingency Plan: 
  • Alternative Crop Promotion: Instead of water-intensive rice, SKUAST promotes drought-resistant maize hybrids (SMC-8, SMH-5) and pulses, which require less water. 
    • Recommends heat-tolerant crops like cowpea, which can withstand dry conditions. 
  • Water Conservation Strategies: 
    • Mulching: Covering topsoil with organic materials to retain moisture and improve soil health. 
    • Micro-Irrigation: Encourages drip irrigation and mist sprayers for optimal water use. 
      • Recommends micro-sprinkler systems and organic soil amendments to sustain vegetable farming. 
    • Anti-Transpirant Agents: Applying chemicals to reduce water loss from plants (Transpiration). 
  • Resilient Farming Practices: Recommends the use of growth regulator sprays to prevent early blooming and anti-transpirants in fruit crops to conserve moisture. 
  • Pest Control: Rising temperatures have made pests like aphids and leaf miner blotch more invasive. SKUAST is issuing advisories on chemical pest control measures.

Read more: Climate Resilient Agriculture

Narwhals

Source: DTE 

Scientists have recorded narwhals (often referred as Sea unicorns) using their tusks for hunting for the first time, offering key behavioral insights and adaptation in a warming Arctic. 

• About Narwhals (Monodon monoceros): They are medium-sized toothed whales found in the deep Arctic waters.  
  • Physical Features: Males have long, spiral tusk (up to 3m), which is an elongated upper left tooth. 
    • It is different from all other toothed whales in that it has no teeth in its mouth. 
    • Some narwhals have up to two tusks, while others have none. 
    • They use their tusks to stun and manipulate prey, especially Arctic char, and competition for mates. 
  • IUCN Status: Least Concern. 
  • Social Behavior: Highly social species, found in pods of 2-25 individuals. 
  • Migration: Unlike some whales, narwhals do not migrate long distances. 
  • Diet: Feed on Greenland halibut, Arctic and polar cod, squid, and shrimp.

Read More: Arctic Warming

Taiwan's Geopolitical Significance

Source: IE 

The US revised its Taiwan factsheet, omitting “we do not support Taiwan independence” and backing Taiwan’s global participation, drawing Taiwan’s support but China’s opposition. 

• Taiwan Relations Act (1979): Promotes US-Taiwan ties, ensuring trade, cultural exchange, and defensive arms sales despite Beijing’s objections. 
• Significance of Taiwan: Taiwan located in the East China Sea, is crucial for regional trade, with the Taiwan Strait being a key global shipping route.  
  • Additionally, Taiwan manufactures over 60% of the world's semiconductors and around 90% of the most advanced chips, making it a critical player in the global tech supply chain. 
• China and Taiwan:  China follows the One China Policy, asserting that Taiwan is an inseparable part of China and must eventually reunite.  
  • However, Taiwan sees itself as a self-governing democracy with its own constitution and elected leaders. 
• India’s Stand One China Policy: India follows the One China Policy, in 2003 India signed a joint declaration with China recognizing Tibet Autonomous Region as part of the territory of China. 

Read more: China-Taiwan Conflict

SPHEREx Mission

Source: TH 

NASA is set to launch SPHEREx (Spectro-Photometer for the History of the Universe, Epoch of Reionization, and Ices Explorer) space telescope to study the early universe, explore the universe’s origins and trace the formation of life. 

SPHEREx Mission 

• SPHEREx will map 450 million galaxies over 2 years, creating a 3D sky map in 102 color bands (wavelengths of light) using spectroscopy. 
  • Spectroscopy is the study of the absorption and emission of light and other radiation by matter. 
• It will study cosmic inflation, the rapid expansion of the universe after the Big Bang (13.8 billion years ago), and analyze molecular clouds to detect water, carbon dioxide, and carbon monoxide. 
• It will measure the collective glow of light from intergalactic space to identify unknown cosmic phenomena. 
• The Big Bang Theory explains the universe's origin as a singular, hot, and dense point that expanded around 13.8 billion years ago, leading to its continuous expansion. 

Read More: Space Missions in 2024 

Blue Ghost Mission 1

Source: TH 

A US company, Firefly Aerospace, successfully landed its Blue Ghost Mission 1 on the Moon, marking the 2^nd private lunar landing and the 1st to land upright. 

• The mission is nicknamed “Ghost Riders in the Sky”, and was launched in January, 2025, aboard a SpaceX Falcon 9 rocket. 
• It landed (lander name: Golden) near Mons Latreille, a volcanic formation on the Moon’s northeastern near side. 
• It is part of NASA's collaboration with industry to reduce costs and support the Artemis Program, the mission to return astronauts to the Moon. 
• Upcoming Lunar Missions:  
  • IM-2 mission: Intuitive Machines’ IM-2 mission, featuring its lander Athena,  will be launched in March 2025. 
    • In February 2024, Intuitive Machines became the first private company to achieve a soft lunar landing and the first US landing since Apollo 17 in 1972. 
  • NASA’s CLPS Program: The US aims to establish routine private lunar missions through NASA’s USD Commercial Lunar Payload Services (CLPS) program. 

Read More: Challenges in Lunar Landing Missions