What to Read in Indian Express Editorial ( Topic and Syllabus wise)

 

Article 1: New Base Year 2022–23 and Its Implications

Why in News: The Ministry of Statistics and Programme Implementation (MOSPI) is releasing a revised GDP data series with 2022–23 as the new base year, replacing the 2011–12 base year.

Key Details

MOSPI will release GDP data for October–December 2025 under the new series along with the Second Advance Estimate for 2025–26.

The new GDP base year shifts from 2011–12 to 2022–23, after more than a decade.

The revision removes the single-deflator method and adopts more granular deflators.

New data sources like GST, e-Vahan, PLFS, and Supply-Use Tables (SUTs) are being incorporated.

Concept of Base Year Revision in GDP

Meaning of Base Year: The base year is the benchmark year used to calculate constant prices for real GDP. It reflects current economic structure, consumption patterns, and production trends.

Need for Periodic Revision: International best practices recommend revising the base year every 5–10 years to capture structural transformation such as digitisation and formalisation.

Previous Revision (2015): India shifted from the 2004–05 series to the 2011–12 series in January 2015, leading to significant revisions in growth estimates for certain years.

Reflecting Structural Changes: Since 2011–12, India has witnessed expansion in digital economy, GST implementation (2017), Insolvency and Bankruptcy Code (2016), and increased formalisation, necessitating revision.

Methodological Changes in the New GDP Series

Removal of Single Deflator Method: Earlier, nominal GDP was adjusted using a single deflator, which economists argued overstated growth in some quarters (e.g., 7.8% and 8.2% in 2025).
The new system adopts multiple sector-specific deflators for better inflation adjustment.

Granular Price Adjustments: Sector-wise deflators improve measurement of real growth, especially in manufacturing and services where price movements differ significantly.

Integration of Supply-Use Tables (SUTs): SUTs reconcile production and expenditure approaches, reducing the “discrepancy” component that often causes future revisions.

Alignment with International Standards: The revision aims to strengthen India’s credibility, especially after the IMF retained a ‘C’ grade for data quality in 2025 due to outdated base year concerns.

New Data Sources and Improved Coverage

GST Data: GST provides real-time information on formal sector production, improving coverage of manufacturing and services.

e-Vahan Database: Vehicle registration data strengthens transport and automobile sector estimates.

Periodic Labour Force Survey (PLFS): PLFS improves employment and informal sector estimation, making GDP measurement more robust.

Annual Survey of Unincorporated Sector Enterprises (ASUSE): Enhances measurement of informal sector output, critical since informal activities constitute a large part of India’s economy.

Impact on Growth Estimates

Possible Revision in Growth Rates: As seen in 2015, growth rates may be revised upward or downward depending on methodology changes.

Back Series Preparation: Back-series data up to 1950–51 will eventually be recalculated, ensuring comparability over time. Expected by December 2026.

Policy Implications: GDP figures influence fiscal deficit targets, debt-to-GDP ratio, tax buoyancy estimates, and monetary policy decisions.

Investor Confidence: Accurate and transparent data enhances global investor trust and improves India’s macroeconomic credibility.

Broader Economic Significance

Capturing Digital Economy: Post-2014 expansion in e-commerce, fintech, and digital payments (UPI ecosystem) must be reflected accurately in GDP.

Formalisation of Economy: Post-GST compliance has widened the tax base, increasing formal output measurement.

Federal Fiscal Calculations: GDP estimates impact devolution formula under Finance Commission and Centre–State fiscal transfers.

Global Comparisons: Accurate GDP measurement affects India’s ranking among global economies and its negotiation power in multilateral forums.

Conclusion

The revision of GDP with 2022–23 as base year is a crucial statistical reform to reflect India’s evolving economic structure. By adopting granular deflators, improved data sources, and Supply-Use reconciliation, MOSPI aims to enhance transparency and reliability. However, ensuring methodological clarity, timely back-series release, and international comparability will be essential to strengthen India’s statistical credibility and policy effectiveness.

EXPECTED QUESTIONS FOR UPSC CSE

Prelims MCQ

The base year in GDP calculation is important because:
(a) It determines fiscal deficit
(b) It measures inflation directly
(c) It provides a benchmark for calculating real GDP
(d) It estimates tax revenue
Answer: (c)

Descriptive Question

1. Examine the methodological challenges in measuring India’s GDP and the significance of new data sources like GST and PLFS. (GS Paper III)

 

Article 2: India–Israel Relations

Why in News: The Prime Minister of India addressed the Knesset in February 2026, reaffirming India’s strategic partnership with Israel amid ongoing regional tensions following the October 7, 2023 Hamas attack.

Key Details

India reiterated its zero tolerance policy against terrorism and expressed solidarity with Israel after the October 7 attack.

Both nations are working towards expanding trade, defence, innovation, and technology cooperation.

Negotiations for a Free Trade Agreement (FTA) and implementation of the Bilateral Investment Treaty (BIT) are underway.

India supports peace efforts in West Asia, including diplomatic initiatives aligned with UN processes.

Historical Foundations of India–Israel Relations

Civilizational Linkages (2,000+ Years)

Trade links between India and Jewish communities date back over two millennia, as recorded in ancient texts like the Talmud.

Jewish communities such as the Bene Israel (Maharashtra), Cochini Jews (Kerala), Baghdadi Jews (Mumbai/Kolkata), and Bnei Menashe (Northeast) lived in India without persecution.

Recognition and Diplomatic Relations

India formally recognised Israel on 17 September 1950, though full diplomatic relations were established only in 1992.

The delay reflected India’s West Asia policy balancing Arab interests, domestic considerations, and Cold War geopolitics.

Shared Military History

Over 4,000 Indian soldiers died in the West Asian theatre during World War I, including the famous Battle of Haifa (1918).

Lt Gen J.F.R. Jacob played a key role in the 1971 India-Pakistan War, reflecting Jewish contributions to Indian nation-building.

Strategic Partnership and Defence Cooperation

Strategic Partnership (2017 Onwards)

In 2017, India and Israel elevated ties to a Strategic Partnership, expanding cooperation in defence, agriculture, cybersecurity, and innovation.

Prime ministerial visits in 2017 and 2026 symbolised deep political trust.

Defence and Security Cooperation

Israel is among India’s top defence suppliers, particularly in missile systems, UAVs, radar, and surveillance technologies.

Joint cooperation enhances India’s capabilities in border security and counter-terror operations.

Counter-Terrorism Collaboration

Both countries follow a policy of zero tolerance toward terrorism.

Intelligence sharing and homeland security cooperation have strengthened after global terror incidents such as 26/11 (Mumbai) and October 7, 2023.

Economic and Technological Cooperation

Trade and Investment

Bilateral trade has grown significantly since 1992, especially in diamonds, chemicals, defence equipment, and technology.

The Bilateral Investment Treaty (2025) aims to provide predictability and investor confidence.

Innovation and Technology

Israel is globally recognised as a “Start-Up Nation”, leading in AI, cybersecurity, agri-tech, and water management.

India, as the fastest-growing major economy, offers scale and market opportunities.

Agricultural Cooperation

Israeli drip irrigation and desert farming technologies have transformed agriculture in Indian states such as Haryana and Gujarat.

Centres of Excellence under Indo-Israel Agricultural Projects promote sustainable farming practices.

West Asia Policy and Geopolitical Balance

Balancing Diplomacy

India maintains strong relations with Israel while also supporting the Palestinian cause and maintaining ties with Gulf nations.

India supports a two-state solution and UN-backed peace initiatives.

Abraham Accords and Regional Stability

The Abraham Accords (2020) normalised Israel’s relations with several Arab countries, creating new diplomatic possibilities.

India has welcomed regional normalisation efforts as conducive to economic connectivity.

I2U2 and Multilateral Engagement

India, Israel, UAE, and USA collaborate under the I2U2 grouping, focusing on infrastructure, food security, and technology.

The partnership contributes to Indo-Pacific and West Asian stability.

 Cultural and Civilizational Convergence

Shared Democratic Values

Both nations are democracies with independent judiciaries, vibrant media, and multi-party systems.

Commitment to rule of law and pluralism forms the normative foundation of ties.

Philosophical Parallels

Jewish concept of Tikkun Olam (healing the world) parallels India’s Vasudhaiva Kutumbakam (world as one family).

Ethical governance and moral responsibility are shared civilizational themes.

People-to-People Ties

Indian-origin Jews in Israel and Indian caregivers and professionals in Israel strengthen grassroots bonds.

Tourism, education exchange, and diaspora networks enhance mutual understanding.

Way Forward

India–Israel relations reflect a convergence of strategic interests, shared democratic values, and historical goodwill. Going forward:

Conclude the India–Israel FTA to boost trade diversification.

Expand cooperation in cybersecurity, AI, water security, and defence innovation.

Maintain diplomatic balance in West Asia by supporting peaceful dialogue and regional stability.

Strengthen multilateral frameworks such as I2U2 for global governance cooperation.

The India–Israel partnership is not merely bilateral; it contributes to counter-terrorism efforts, technological progress, and geopolitical stability, thereby strengthening the global democratic order.

EXPECTED QUESTIONS FOR UPSC CSE

Prelims MCQ

1. Consider the following regarding India–Israel relations:

India established full diplomatic relations with Israel in 1992.

Israel is among India’s top defence suppliers.

India does not support a two-state solution in West Asia.

Which of the statements are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: a

Descriptive Question

1. “India’s partnership with Israel reflects strategic pragmatism balanced with principled diplomacy.” Discuss. (150 Words, 10 Marks)

 

Article 3: Semiconductor Supply Chains and Rare Earth Geopolitics

Why in News: Global semiconductor and aerospace firms face shortages of critical rare earths like yttrium and scandium amid China–U.S. trade tensions ahead of a high-level bilateral summit.

Key Details

Shortages of yttrium and scandium, largely produced in China, are affecting U.S. semiconductor and aerospace supply chains.

Prices of yttrium have reportedly surged sharply, with exports to the U.S. falling significantly after Chinese controls.

The issue has strategic implications for 5G chips, jet engines, and defence technologies.

The matter is expected to feature in upcoming high-level U.S.–China diplomatic engagements.

Rare Earth Elements (REEs): Strategic Importance

Definition and Composition: Rare earth elements comprise a group of 17 metallic elements, including yttrium and scandium, essential for high-technology manufacturing despite being used in small quantities.

Critical Role in Modern Technology: REEs are indispensable for semiconductors, electric vehicles, wind turbines, defence electronics, and aerospace coatings, making them central to the digital economy.

High Value–Low Volume Nature: Even minute disruptions in supply can halt production of advanced technologies because substitutes are limited and processing is complex.

Strategic Mineral Classification: Many countries, including India and the U.S., classify REEs as critical minerals due to their importance for economic and national security.

China’s Dominance in Rare Earth Supply Chains

Near-Monopoly in Processing: China accounts for roughly 60–70% of global rare earth mining and about 85–90% of processing capacity, giving it significant leverage.

Export Controls as Geopolitical Tool: China has periodically imposed export restrictions on rare earths, using supply chains as economic statecraft in trade disputes.

Value Chain Advantage: Beyond mining, China dominates refining, separation, and magnet manufacturing, which are technologically intensive stages.

Global Dependence Risk: Heavy reliance on a single supplier exposes countries to supply shocks, price volatility, and strategic vulnerability.

Impact on Semiconductor and 5G Ecosystem

Risk to Next-Generation Chips: Scandium shortages threaten production of advanced 5G semiconductor components, potentially delaying telecom infrastructure rollout.

Aerospace and Defence Concerns: Yttrium-based thermal coatings are critical for jet engines and turbines, where heat resistance is essential for performance and safety.

Supply Chain Fragility: The semiconductor industry already faces geopolitical fragmentation and chip shortages, making rare earth constraints more disruptive.

Industry Response: Some firms have begun rationing materials and prioritising large clients, indicating tightening supply conditions.

Geopolitical Dimensions: U.S.–China Tech Rivalry

Technology as Strategic Competition: The rare earth issue reflects the broader U.S.–China competition in critical technologies, including AI, semiconductors, and telecom.

Trade Truce but Persistent Frictions: Although export curbs were partially eased, data indicate supplies to the U.S. remain constrained, highlighting trust deficits.

Weaponisation of Supply Chains: Control over critical minerals is increasingly viewed as a tool of geoeconomic influence, similar to energy geopolitics.

Diplomatic Engagement: The upcoming summit signals attempts to manage tensions, but structural competition in high technology is likely to persist.

Implications for India

Opportunity for Supply Diversification: Global efforts to reduce dependence on China open space for India to emerge as an alternative processing and manufacturing hub.

Domestic Resource Potential: India possesses rare earth reserves, particularly in monazite sands along coastal regions, though extraction and processing remain limited.

Semiconductor Mission Synergy: The India Semiconductor Mission (ISM) and Production Linked Incentive (PLI) schemes aim to build domestic chip capacity, which requires secure mineral supply chains.

Strategic Partnerships: India is part of initiatives like the Minerals Security Partnership (MSP) and Quad cooperation on critical technologies, enhancing resilience.

Policy Challenges

Environmental Concerns: Rare earth mining and processing generate radioactive waste and ecological damage, complicating rapid expansion.

Technological Barriers: Separation and refining technologies are complex and capital-intensive, requiring long-term investment and R&D.

Market Volatility: Prices of rare earths are highly volatile, discouraging private investment outside China.

Supply Chain Concentration: Building diversified supply chains requires coordination across mining, refining, and manufacturing ecosystems.

Way Forward

Diversify Global Supply Chains: Countries should reduce overdependence on a single supplier by promoting mining and processing in regions such as Australia, India, Africa, and Latin America. Strategic stockpiles of critical minerals can cushion short-term disruptions.

Strengthen Domestic Capabilities (India Focus): India must accelerate exploration of monazite and other rare earth reserves, expand processing capacity through agencies like IREL, and integrate mineral security with the India Semiconductor Mission.

Promote Recycling and Circular Economy: Investment in recovery of rare earths from electronic waste, magnets, and industrial scrap can create a secondary supply stream and reduce environmental pressure from fresh mining.

Deepen Strategic Partnerships: India should leverage platforms such as the Quad, Minerals Security Partnership, and bilateral agreements to secure technology transfer, joint ventures, and long-term mineral supply contracts.

Invest in R&D and Substitutes: Public–private investment in material science can help develop alternative materials, improve efficiency of rare earth use, and build indigenous separation technologies.

Ensure Sustainable Mining Practices: Environmental safeguards, community participation, and transparent regulation are essential to balance mineral extraction with ecological protection and social acceptance.

Conclusion

The emerging rare earth crunch underscores the growing strategic importance of critical mineral security in the technology age. Countries must diversify supply chains, invest in domestic processing, promote recycling, and deepen international cooperation. For India, this is both a warning and an opportunity to strengthen its semiconductor ambitions and position itself in resilient global value chains.

EXPECTED QUESTIONS FOR UPSC CSE

Prelims MCQ

1. Scandium and yttrium are important primarily because they are used in:
   (a) Food preservation
   (b) Semiconductor and aerospace technologies
   (c) Textile dyeing
   (d) Pharmaceutical antibiotics
   Answer:(b)

Descriptive Question

1. Evaluate India’s preparedness to leverage opportunities arising from the global diversification of critical mineral supply chains. (150 Words, 10 Marks)