Content

1. Pink Bollworm, Cotton Crisis And Implications For India
2. Gold Price Fall During Crisis – Changing Safe Haven Dynamics
3. India Exploring Local Currency Trade For Oil Imports
4. Living Will And End-of-Life Care In India
5. UDAN Scheme Revamp – Regional Connectivity And Viability Concerns
6. Punjab–Rajasthan Water Dispute – ₹1.44 Lakh Crore Claim
7. WTO Dispute Settlement Crisis And India’s Position

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Pink Bollworm, Cotton Crisis And Implications For India

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Introduction

• The resurgence of pink bollworm (Pectinophora gossypiella) has triggered a cotton productivity crisis in India, especially in north-western states like Haryana, Punjab, and Rajasthan.
• Once controlled by Bt cotton (early 2000s), the pest has developed resistance since ~2010s, leading to sharp yield decline and farmer losses.

Relevance  

GS I (Geography / Society)

• Cropping patterns and regional shifts (cotton → paddy in NW India)
• Agrarian distress and rural livelihood patterns
• Impact on women labour and migration

GS III (Agriculture / Economy / Environment)

• Agricultural productivity decline and pest resistance
• GM crops (Bt cotton) and technological limitations
• Climate-unsuitable cropping and groundwater depletion
• Agri-value chains and textile industry linkages

Practice Question

• “The pink bollworm crisis highlights structural weaknesses in India’s cotton economy.” Analyse.(250 Words)

Cotton In India – Key Facts

• India is among the largest cotton producers globally, but productivity remains low compared to countries like USA, China, Brazil.
• Cotton contributes to:
  • Textile industry (~45 million jobs)
  • Export earnings (~$12–15 billion annually)
  • Livelihoods of ~6 million farmers
• Production declined from 36.07 million bales (2019–20) to 29.72 million bales (2024–25) (~14.84% fall).

Pink Bollworm – Nature Of Crisis

• Pink bollworm is a major cotton pest that damages bolls internally, reducing yield and fibre quality.
• Bt cotton initially effective due to Bacillus thuringiensis toxin, but pest developed genetic resistance, reducing effectiveness.
• Yield impact:
  • Earlier: 10–12 quintals/acre
  • Current: ~3–4 quintals/acre in affected regions
• Continuous monocropping of Bt cotton and lack of refuge crops accelerated resistance development.

Impact On Farmers

• Cost of cultivation: ~₹40,000 per acre vs returns ~₹25,000, resulting in losses ~₹15,000 per acre.
• Market price often ₹1,000–₹1,600 below MSP, due to quality issues and weak procurement.
• Farmers face triple burden:
  • Pest infestation
  • Rising input costs
  • Price realisation failure

Regional Evidence (Haryana Case)

• Cotton area declined from 0.72 million ha (2019–20) to 0.40 million ha (2024–25).
• District-level losses up to ₹17,500 per acre reported (CCSHAU study).
• Yield volatility: 714 kg/ha (2019) → 264 kg/ha (2022) → ~534 kg/ha (2024).

Cropping Pattern Shift

• Farmers shifting from cotton to paddy, despite ecological unsuitability.
• Example: Sirsa district saw 55.18% increase in paddy area (2020–2024).
• This shift worsens groundwater depletion in already water-stressed regions of north-west India.

Policy And Institutional Issues

• MSP exists but procurement is weak, forcing farmers into distress sales.
• Crop insurance (PMFBY) suffers from delayed or denied payouts, reducing effectiveness.
• Incentives like:
  • ₹3,000/acre (desi cotton)
  • ₹8,000/acre (Mera Pani-Meri Virasat)
    have low uptake due to market and seed constraints.

Labour And Social Impact

• Cotton is labour-intensive, especially for manual picking, supporting rural employment.
• Decline in cotton reduces employment for women labourers, with seasonal income loss of ₹10,000–₹15,000.
• Shift to paddy increases reliance on migrant labour, displacing local workers and increasing distress migration.

Structural Issues In Cotton Economy

• Overdependence on single technology (Bt cotton) without continuous innovation.
• Weak R&D ecosystem for developing next-generation pest-resistant varieties.
• Lack of value chain integration (ginning, textiles, exports) reduces farmer share in final price.
• Limited availability of desi cotton seeds despite better resilience.

Broader Implications

• Threat to textile industry supply chain, increasing reliance on cotton imports.
• Undermines crop diversification and sustainability goals, especially in water-stressed regions.
• Reflects larger agrarian issue of price-cost imbalance and technological stagnation.
• Indicates limits of genetically modified crops without integrated pest management.

Way Forward

• Develop next-generation pest-resistant cotton varieties and strengthen public sector seed research.
• Promote Integrated Pest Management (IPM) and enforce refuge policy to delay resistance development.
• Strengthen MSP procurement mechanisms and ensure better price realisation.
• Improve insurance delivery (PMFBY) with timely payouts and transparency.
• Promote diversified cropping systems with assured markets to reduce monoculture risks.
• Expand cotton value chain (processing, textiles) to enhance farmer income share.

Prelims Pointers

• Pink bollworm: major cotton pest; affects bolls internally
• Bt cotton: introduced early 2000s using Bacillus thuringiensis
• Cotton production: 36.07 → 29.72 million bales
• Haryana cotton area: 0.72 → 0.40 million ha
• Scheme: Mera Pani-Meri Virasat (₹8,000/acre)

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Gold Price Fall During Crisis – Changing Safe Haven Dynamics

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Introduction

• Contrary to historical trends, gold prices fell sharply during the West Asian conflict (Feb 2026), declining from ~₹1.9 lakh to ~₹1.3 lakh per 10 grams in India.
• Traditionally a safe haven asset, gold usually rises during crises (e.g., 2008 crisis, COVID-19, Ukraine war 2022), but current behaviour reflects changing macro-financial dynamics.

Relevance

GS II (IR)

• Impact of global conflicts (West Asia) on financial markets
• Role of US dollar dominance in global economy

GS Paper III (Economy)

• Monetary policy: interest rates, inflation, bond markets
• Safe haven assets (gold, dollar, US Treasuries)
• External sector dynamics and capital flows
• Commodity price behaviour under crisis

Practice Question

• Why did gold fail to act as a safe haven during recent global crises? Analyse.(250 Words)

How Gold Typically Behaves In Crises ?

• Gold acts as a store of value when uncertainty rises, especially when financial markets, currencies, or institutions are unstable.
• It becomes attractive when interest rates fall, as gold does not yield returns, reducing its opportunity cost relative to bonds.
• A weak US dollar boosts gold demand globally, as gold becomes cheaper for non-dollar buyers, increasing prices.

What Changed In Current Crisis ?

• The West Asian conflict triggered a sharp rise in crude oil prices (> $120/barrel), creating inflationary pressures globally.
• Markets now expect interest rates to remain higher for longer, reversing earlier expectations of rate cuts by central banks.
• Higher expected interest rates increase returns on US Treasury bonds, making gold (a non-yielding asset) less attractive.

Role Of Dollar And Interest Rates

• Rising interest rate expectations led to capital inflows into US bonds, strengthening the US dollar.
• A stronger dollar makes gold more expensive globally, reducing demand and putting downward pressure on prices.
• Thus, key drivers of gold rallies (low rates + weak dollar) moved in the opposite direction simultaneously.

Liquidity And Market Dynamics

• Gold had already reached record highs (~₹1.8–1.9 lakh per 10 grams; >$5,000/ounce globally) before the conflict, creating scope for correction.
• Falling prices triggered automatic sell orders (stop-loss), causing a chain reaction of selling and accelerating price decline.
• Investors facing losses in equities sold gold to book profits and meet liquidity needs, reinforcing downward pressure.

Shift In Safe Haven Preference

• In the short run, the US dollar has re-emerged as the primary safe haven, especially during inflation-driven crises.
• Oil price rise increases global demand for dollars (since oil is dollar-denominated), further strengthening the currency.
• Despite diversification trends (dollar share in reserves: ~71% → <60%), the dollar remains dominant in global trade and reserves.

Why Gold Still Retains Importance ?

• Central banks continue to accumulate gold reserves, reflecting long-term confidence as a sanction-proof asset.
• After Russia asset freeze (2022), countries increased gold holdings as it is immune to financial sanctions.
• Gold ETF inflows in India remained positive for 10 consecutive months, indicating sustained investment demand.

Indian Context

• Gold imports fell 38% month-on-month (Feb 2026) but remained ~80% higher year-on-year, indicating underlying demand strength.
• Physical jewellery demand softened due to high prices, but investment demand via ETFs remained resilient.
• Gold continues to play a key role in household savings, inflation hedge, and cultural asset in India.

Key Economic Insight

• Current episode highlights that gold behaves differently depending on type of crisis:
  • Financial crisis → gold rises
  • Inflation + high interest rates → gold may fall
• Indicates shift from “uncertainty-driven demand” to “interest rate-driven valuation” in global financial markets.

What Lies Ahead ?

• If oil prices stabilise, inflation concerns may ease, leading to rate cuts → favourable for gold.
• If conflict intensifies and inflation persists, stagflation scenario may emerge, which historically supports gold prices.
• Long-term outlook remains bullish, with corrections seen as part of cyclical market adjustments.

Prelims Pointers

• Gold priced in US dollars globally
• Relationship:
  • Interest rates ↑ → Gold ↓
  • Dollar ↑ → Gold ↓
• Safe haven assets: Gold, US dollar, US Treasury bonds
• Stagflation: High inflation + low growth

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India Exploring Local Currency Trade For Oil Imports

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Introduction

• India is exploring local currency trade with GCC countries to reduce dependence on the US dollar for oil imports, which constitute nearly 80% of total crude imports.
• The move is driven by surging oil prices ($69 → $123/barrel) and rupee depreciation (₹91.3 → ₹94.1/$), increasing India’s import burden.

Relevance

GS II (IR)

• India–GCC relations and energy diplomacy
• De-dollarisation and global financial geopolitics
• Strategic balancing between US and emerging blocs

GS Paper III (Economy)

• Current Account Deficit (CAD) and exchange rate
• External sector vulnerability and forex management
• Rupee internationalisation
• Trade settlement mechanisms and currency risks

Practice Question

• Analyse the implications of local currency trade for India’s energy security and external stability.(250 Words)

Key Context And Data

• GCC countries account for ~49% of India’s oil imports, while Russia contributes ~30.4% (Apr 2025–Jan 2026).
• India’s crude basket price rose to $123.15/barrel, significantly increasing import bills and widening current account deficit pressures.
• Each currency conversion costs ~1–2% per transaction, leading to cumulative costs of ~5–6% in multi-stage conversions.

Why India Is Moving Towards Local Currency Trade ?

• Rupee depreciation increases cost of dollar-denominated imports, making oil more expensive and worsening inflation and fiscal pressures.
• High oil prices amplify import costs, creating a double shock: price effect + exchange rate effect.
• Local currency trade reduces transaction costs, exchange rate risks, and dependency on dollar liquidity.

Economic Implications

• Potential savings of 5–6% on high-value oil transactions can significantly reduce India’s import bill and fiscal stress.
• Helps stabilise current account deficit (CAD) by lowering outflow of foreign exchange reserves.
• Reduces exposure to currency volatility, improving predictability in trade payments.

Strategic And Geopolitical Implications

• Indicates gradual move towards de-dollarisation in trade, aligning with global trends of currency diversification.
• Strengthens economic ties with GCC countries, which are India’s key energy partners.
• However, may attract US pressure, as the US has historically opposed alternatives to the dollar in global trade.

Existing Precedents

• India already uses local currencies and dirham-based payments for Russian oil imports.
• Similar arrangements have been explored with countries like UAE (rupee-dirham trade mechanism).

Benefits Of Local Currency Mechanism

• Reduces currency conversion costs (1–2% per stage), especially in multi-currency transactions.
• Enhances trade settlement efficiency and speed, avoiding multiple intermediary conversions.
• Promotes internationalisation of the rupee and strengthens India’s financial sovereignty.

Challenges And Risks

• Limited acceptance of rupee internationally, especially among oil-exporting nations with dollar-linked economies.
• Risk of geopolitical backlash, particularly from the US, including potential tariff or trade pressures.
• Currency volatility and lack of deep financial markets for rupee settlement may limit scalability.
• GCC economies are heavily dollar-pegged, making transition to alternative currencies complex.

Way Forward

• Develop bilateral currency swap agreements and settlement mechanisms with GCC countries.
• Strengthen rupee internationalisation through trade invoicing, financial markets, and reserve currency usage.
• Build robust payment infrastructure (like UPI cross-border, digital currency frameworks) for seamless transactions.
• Maintain a balanced approach, ensuring diversification without disrupting strategic ties with the US.

Prelims Pointers

• India imports ~85% of crude oil needs
• GCC share: ~49%; Russia: ~30.4%
• Oil priced in US dollars globally
• Indian crude basket: $123.15/barrel (2026)
• Currency conversion cost: ~1–2% per stage

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Living Will And End-of-Life Care In India 

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Introduction

• A living will (advance directive) is a legal document specifying an individual’s preferences regarding life-sustaining treatment in terminal or irreversible conditions, ensuring dignity in end-of-life care.
• Recognised by the Supreme Court in Common Cause vs Union of India (2018), it upholds patient autonomy and right to die with dignity under Article 21.

Relevance  

GS Paper I (Society)

• Changing attitudes towards death, dignity, and autonomy
• Family structures and decision-making

GS Paper II (Polity / Governance)

• Article 21: Right to life with dignity
• Supreme Court judgments (Common Cause case)
• Healthcare governance and palliative care policy

GS Paper III (Social Sector)

• Healthcare infrastructure and palliative care systems
• Cost of healthcare and end-of-life expenditure

Practice Question

• Discuss the ethical and legal dimensions of living wills in India.(250 Words)

What Is A Living Will ?

• It allows individuals to decide in advance whether to accept or refuse life-support interventions such as ventilators, CPR, artificial feeding, or ICU care in irreversible conditions.
• Applies only when a person is terminally ill or in irreversible states (e.g., persistent vegetative state, metastatic cancer), not for routine or curable illnesses.
• Requires signature of the individual, two witnesses, and attestation by a notary/gazetted officer, with recent simplification removing magistrate requirement.

Why It Is Important ?

• Prevents unnecessary prolongation of suffering, especially in cases with no hope of recovery.
• Reduces emotional burden on families, who otherwise face difficult decisions amid conflict, guilt, and uncertainty.
• Ensures doctors respect patient preferences, rather than defaulting to aggressive life-prolonging treatments.
• Studies show it does not affect survival, but reduces unnecessary interventions and healthcare costs.

Current Reality In India

• Most end-of-life decisions are family-driven or doctor-driven, often leading to continued ICU care even in terminal cases.
• Lack of awareness leads to patients spending final days on life support, disconnected from family, with poor quality of life.
• Palliative care access remains limited, despite guidelines by Indian Association of Palliative Care (IAPC) and Indian Society of Critical Care Medicine (ISCCM).

Ethical And Social Issues

• Reflects tension between sanctity of life vs quality of life in medical ethics.
• Challenges patriarchal and family-centric decision-making, shifting focus to individual autonomy.
• Cultural reluctance to discuss death leads to lack of preparedness and planning.
• Risk of misuse or misunderstanding if clear guidelines and safeguards are not followed.

Key Judicial Developments

• Common Cause (2018): Legalised passive euthanasia and recognised living wills.
• Recent SC rulings (e.g., Harish Rana case 2026) clarified that withdrawal of artificial feeding/medical support can be allowed under medical supervision.
• Simplified procedure: removed requirement of judicial magistrate approval, making implementation easier.

Practical Aspects

• Living will can specify preferences such as:
  • No ventilator support
  • No artificial feeding
  • No CPR
  • Preference for palliative/comfort care
• It is flexible and revisable, allowing individuals to update preferences over time.
• Requires prior discussion with family members and treating doctors to avoid future disputes.

Challenges

• Low awareness and social taboo around death planning.
• Limited integration into hospital protocols and medical practice.
• Absence of strong palliative care infrastructure, especially in rural India.
• Fear among doctors of legal liability and ethical dilemmas.

Way Forward

• Increase public awareness campaigns on living wills and end-of-life planning.
• Integrate advance directives into digital health records (Ayushman Bharat Digital Mission).
• Strengthen palliative care services and include them in primary healthcare.
• Provide legal clarity and standardised templates for easy adoption.
• Train healthcare professionals in end-of-life communication and ethical decision-making.

Prelims Pointers

• Living will = Advance directive
• Recognised in 2018 SC judgment (Common Cause case)
• Applies only to terminal/irreversible conditions
• Requires 2 witnesses + notary/gazetted officer
• Linked to Article 21 (right to dignity)

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UDAN Scheme Revamp – Regional Connectivity And Viability Concerns

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Introduction

• The government has revamped the UDAN (Ude Desh ka Aam Nagrik) scheme with an outlay of ₹28,840 crore, marking a ~6-fold increase from the earlier ₹4,500 crore allocation (2017).
• The reform aims to address low route viability and high discontinuation rates, shifting focus from infrastructure creation to sustained operational support.

Relevance

GS II (Governance)

• Public policy design and subsidy frameworks
• Role of government in regional development
• Centre–state coordination in infrastructure

GS III (Economy / Infrastructure)

• Aviation sector development
• Viability Gap Funding (VGF)
• Infrastructure financing and regional growth
• Tourism and logistics connectivity

Practice Question

• Critically evaluate the performance of UDAN scheme and recent reforms.(250 Words)

Key Changes In UDAN Revamp

• Subsidy period extended from 3 years to 5 years for regional routes to improve long-term sustainability.
• Funding mechanism shifted from RCS levy (airfare-based) to direct budgetary support (exchequer-funded), reducing burden on passengers.
• ₹10,043 crore allocated specifically for Viability Gap Funding (VGF) to airlines over 10 years.

Performance Of Earlier UDAN Scheme

• Out of 663 routes launched (since 2017), 327 routes discontinued (~49%), indicating poor sustainability.
• Only 7–10% of routes remained viable after subsidy withdrawal (CAG findings).
• Of 95 revived airports, 15 became non-operational, highlighting underutilisation of infrastructure.

Infrastructure And Expansion Plans

• 100 airports to be redeveloped from unused airstrips with ₹12,159 crore outlay over 8 years.
• Support for operations and maintenance (O&M):
  • ₹3.06 crore per airport
  • ₹90 lakh per heliport/water aerodrome
  • Total ₹2,577 crore for ~441 aerodromes
• Development of 200 helipads at ₹15 crore each (total ₹3,661 crore) to improve last-mile connectivity in remote areas.

Operational Mechanism

• Airlines bid for routes under UDAN; selected airlines receive VGF subsidy.
• In return, airlines must cap fares at ₹2,500 per hour of flight for 50% of seats, ensuring affordability.

Key Issues Highlighted

• Commercial unviability of Tier-2 and Tier-3 routes due to low passenger demand and high operational costs.
• Over-reliance on short-term subsidies (earlier 3 years) failed to create self-sustaining routes.
• Infrastructure created without adequate traffic demand assessment led to idle airports.

Economic Implications

• Higher subsidy burden shifts cost to government finances, increasing fiscal expenditure.
• However, improved connectivity can boost regional economies, tourism, trade, and employment generation.
• Reduces regional imbalance in aviation access, aligning with inclusive growth objectives.

Governance And Policy Shift

• Transition from infrastructure-centric approach → viability-centric approach.
• Recognition that regional aviation requires long-term state support, not short-term market correction.
• Direct exchequer funding improves transparency and predictability compared to indirect levy mechanism.

Strategic Importance

• Enhances connectivity to remote, hilly, and underserved regions, improving national integration.
• Supports multi-modal connectivity vision under PM Gati Shakti.
• Boosts defence and emergency access in border and strategic areas via helipads and small airports.

Challenges

• Risk of continued dependency on subsidies, without achieving long-term route viability.
• Potential inefficiencies in route selection and demand forecasting.
• Limited airline participation due to thin profit margins in regional aviation.
• High operational costs (fuel, maintenance) may still deter sustainability despite extended subsidies.

Way Forward

• Improve route selection using data-driven demand forecasting to ensure viability.
• Encourage smaller aircraft and regional carriers suited for low-demand routes.
• Integrate UDAN with tourism circuits, cargo logistics, and regional economic planning.
• Strengthen state government participation and incentives for last-mile connectivity.
• Gradually move towards hybrid funding models combining public support and private viability.

Prelims Pointers

• UDAN launched: 2017
• Fare cap: ₹2,500 per hour (50% seats)
• Revamp outlay: ₹28,840 crore
• Routes launched: 663; ~327 discontinued
• Subsidy: Viability Gap Funding (VGF)

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Punjab–Rajasthan Water Dispute – ₹1.44 Lakh Crore Claim

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Introduction

• Punjab CM has demanded ₹1.44 lakh crore from Rajasthan for use of ~18,000 cusecs water since 1960, reviving a long-standing dispute over Ravi-Beas river waters.
• Issue combines colonial-era agreements, post-Independence allocations, and present water scarcity, making it a complex inter-state dispute.

Relevance

GS I (Geography)

• River systems (Ravi–Beas) and water distribution
• Water scarcity and regional imbalances

GS II (Polity / Governance)

• Inter-state water disputes (Article 131)
• Federalism and river water sharing
• Role of tribunals and Supreme Court

Practice Question

• Analyse the legal and constitutional dimensions of inter-state water disputes in India.(250 Words)

Historical Background

• 1920s Agreement (Bikaner–Punjab):
  • Maharaja Ganga Singh secured water from Sutlej (Gang Canal).
  • Rajasthan (Bikaner) paid royalty/usage charges linked to irrigated land.
• Payments continued till ~1960, after which the system was discontinued.

Post-Independence Shift

• Indus Waters Treaty (1960):
  • India got full control over Ravi, Beas, Sutlej (Eastern rivers).
  • Water reallocation became an internal matter, not commercial.
• Development of Harike Barrage + Rajasthan Canal (Indira Gandhi Canal) enabled large-scale diversion to Rajasthan.
• Royalty-based payment system ended; water treated as inter-state allocation.

1981 Water Sharing Agreement

• Tripartite agreement (Punjab, Haryana, Rajasthan) fixed total availability at 17.17 MAF.
• Allocation:
  • Rajasthan: 8.6 MAF (largest share)
  • Punjab & Haryana shared remaining
• Rajasthan’s entitlement formalised despite being a non-riparian state.

Origin, Course And Features

• Beas River originates from Beas Kund near Rohtang Pass (Himachal Pradesh, ~4,000 m) and flows through Himachal Pradesh and Punjab, joining Sutlej at Harike Barrage.
• Ravi River originates in Chamba (Himachal Pradesh) near Rohtang region, flows through Punjab, and enters Pakistan to join Chenab.
• Both are part of the Indus River System and classified as Eastern Rivers under Indus Waters Treaty (1960), giving India full usage rights.

Legal Developments

• Punjab Termination of Agreements Act (2004) attempted to scrap water-sharing agreements.
• However, it protected “existing utilisation”, so Rajasthan’s supply continued.
• Supreme Court (2016) ruled that a state cannot unilaterally terminate inter-state agreements, restoring legal validity of earlier arrangements.

Punjab’s Current Argument

• Based on riparian principle:
  • States through which rivers flow should have primary rights over water.
• Rajasthan is a non-riparian state (not in Ravi-Beas basin), yet has largest share.
• Punjab argues that historical diversion has imposed economic and ecological cost, now quantified as ₹1.44 lakh crore.

Changing Ground Realities

• Water availability assumptions (“surplus waters”) used in 1981 have weakened due to:
  • Climate variability
  • Increased demand
  • Over-extraction
• Punjab groundwater extraction: 156.36% of annual recharge (highest in India) vs national average ~60.63%.
• Canal irrigation in Punjab increased from ~26.5% (2022) to ~78% (2025), indicating rising internal demand.

Rajasthan’s Position

• Relies on Indira Gandhi Canal system for irrigation in Thar desert region.
• Water supports agriculture, livelihoods, and desert development, making reallocation politically and economically sensitive.

Key Issues

• Conflict between riparian rights vs national redistribution for regional equity.
• Historical allocations remain fixed despite changing hydrological realities.
• Lack of updated basin-level water assessment and adaptive allocation mechanism.
• Political dimension: water disputes linked to federal tensions and regional identity.

Why Issue Has Resurfaced Now ?

• Severe groundwater depletion in Punjab and sustainability concerns.
• Increasing focus on water security and river basin management at national level.
• Quantifying claim (₹1.44 lakh crore) converts political grievance into negotiation leverage.

Possible Legal And Institutional Routes

• Punjab may approach Supreme Court (Article 131 – inter-state disputes).
• Issue can be revisited through Ravi-Beas Tribunal (pending for decades).
• Any resolution requires Centre-mediated negotiation among states.

Challenges

• Revisiting allocations may trigger chain reaction of inter-state disputes across India.
• Balancing equity (desert irrigation) vs rights (riparian states) is politically sensitive.
• Lack of consensus on actual water availability (MAF estimates outdated).

Way Forward

• Conduct fresh basin-level hydrological assessment based on current data.
• Move towards dynamic allocation mechanisms, not fixed historical quotas.
• Strengthen river basin authorities for integrated water management.
• Promote water-use efficiency (micro-irrigation, crop diversification) in both states.
• Encourage cooperative federalism through negotiated settlements rather than litigation.

Prelims Pointers

• Indus Waters Treaty (1960): Eastern rivers to India
• Ravi-Beas allocation (1981): Total 17.17 MAF
• Rajasthan share: 8.6 MAF
• Punjab groundwater extraction: 156.36%
• Article 131: SC jurisdiction in inter-state disputes

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WTO Dispute Settlement Crisis And India’s Position

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Introduction

• India has called for restoring a fully functional WTO dispute settlement system, highlighting paralysis since 2019 due to US blocking Appellate Body appointments.
• The issue was raised at the 14th WTO Ministerial Conference (MC14), Cameroon (2026), reflecting a deep crisis in global trade governance.

Relevance  

GS II (IR)

• WTO crisis and multilateralism
• India as voice of Global South
• Trade diplomacy and negotiations

GS III (Economy)

• Global trade governance
• Dispute settlement mechanism
• Digital trade and e-commerce issues
• Impact on developing economies

Practice Question

• Discuss the implications of WTO dispute settlement crisis on global trade governance.(250 Words)

Background Of The Crisis

• WTO’s dispute settlement system (DSS) was a two-tier mechanism:
  • Panel stage
  • Appellate Body (final authority)
• Since December 2019, the Appellate Body is non-functional due to insufficient judges (<3 required).
• Trigger: US opposition, citing concerns over judicial overreach and delays.

India’s Core Position

• Calls for automatic and binding dispute settlement restoration, ensuring predictability and rule-based trade order.
• Opposes “dysfunctional system” depriving members of effective redressal.
• Advocates reforms that preserve core WTO principles:
  • Non-discrimination
  • Consensus-based decision-making
  • Equity and inclusiveness

Key Reform Concerns

• Developed countries pushing for plurilateral agreements (outside consensus), risking fragmentation of WTO.
• India supports multilateral, consensus-driven approach, resisting dilution of developing country interests.
• Debate over moratorium on customs duties on e-commerce:
  • In place since 1998
  • Renewed every 2 years

India’s Stand On E-Commerce Moratorium

• India (with South Africa, Indonesia) seeks reconsideration/ending of moratorium.
• Argument:
  • Loss of tariff revenue
  • Constraint on policy space for digital industrialisation
• UNCTAD estimate:
  • Developing countries may lose ~$10 billion annually in tariff revenue.
• By 2025, digital services projected to form ~56% of global services exports, amplifying revenue loss concerns.

Economic Implications

• Weak dispute system reduces trust in global trade rules, increasing unilateralism.
• Benefits powerful economies, while developing countries lose enforcement capability.
• Digital trade rules without tariffs may deepen digital divide and limit domestic industry growth.

Strategic Dimensions

• Crisis reflects shift from multilateralism → power-based trade order.
• India positioning itself as voice of Global South, advocating fair rules.
• Aligns with broader push for reformed multilateral institutions (WTO, IMF, World Bank).

Challenges

• US resistance remains a major obstacle to restoring Appellate Body.
• Divergence between developed vs developing countries on digital trade, subsidies, and transparency.
• Rise of regional trade agreements (RTAs) reducing WTO centrality.

Way Forward

• Restore Appellate Body with reformed procedures addressing US concerns (timelines, mandate clarity).
• Strengthen consensus-based multilateralism, avoiding fragmentation via plurilaterals.
• Revisit e-commerce moratorium with balanced approach ensuring revenue + innovation.
• Enhance capacity of developing countries in dispute settlement and digital trade negotiations.

Prelims Pointers

• WTO Appellate Body non-functional since 2019
• MC14 held in Cameroon (2026)
• E-commerce moratorium: since 1998
• DSS requires minimum 3 judges
• India + South Africa oppose continuation of moratorium