1) Revitalizing the India-US 123 Agreement: Pathway to Nuclear Collaboration and Energy Security

GS 2: International Relations: Realizing US-India 123 Civil Nuclear Agreement

Why is it in the news?

• As India and the US reaffirm their Energy Security Partnership, Washington’s role as a leading oil and gas supplier to India is in focus. While this deal is seen as a means to address trade imbalances, a far more strategic development is the commitment to fully realizing the US-India 123 Civil Nuclear Agreement.
• The renewed push aims to advance collaboration on American-designed nuclear reactors in India, incorporating large-scale localization and potential technology transfer.

Legislative Challenges in India

To facilitate the nuclear partnership, India’s government plans amendments to the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA):

• These changes aim to create bilateral arrangements in line with CLNDA, addressing civil liability concerns and enabling Indian and US industries to collaborate on nuclear reactor production.
• While Washington sought a legal commitment from New Delhi on easing liability provisions, India initially offered only an assurance.
• With reduced parliamentary strength, the Indian government faces challenges in securing the passage of these amendments, but a formal commitment in the Ministry of External Affairs’ statement suggests progress.

The US ‘810’ Roadblock

• India has sought a critical commitment from Washington—an exemption from the restrictive ‘810’ authorization under the US Atomic Energy Act of 1954. This regulation prevents US companies from manufacturing nuclear equipment or conducting nuclear design work outside the US.
• The 123 Agreement was meant to facilitate full civil nuclear cooperation, but the ‘810’ rule restricts India’s ability to manufacture nuclear components domestically. This exemption is crucial for India’s Small Modular Reactor (SMR) plans, as it wants to co-produce these reactors and components for its domestic needs.

Proposed Amendments to Indian Laws

• The changes to the 1962 Atomic Energy Act seek to expand private sector participation in nuclear power plant operations, allowing them to enter the SMR sector as operators.
• Currently, only state-owned NPCIL and joint ventures with public enterprises like NTPC and NALCO have this privilege. The 2010 Civil Liability for Nuclear Damage Act was originally designed to compensate victims in case of a nuclear accident and to allocate liability.
• However, foreign nuclear vendors such as GE-Hitachi, Westinghouse, and Framatome have viewed the act’s provisions as a barrier to investment due to the channelling of liability to equipment suppliers. Addressing these concerns is key to attracting foreign investment in India’s nuclear sector.

Small Modular Reactors and India’s Strategic Interest

• India is exploring collaborations with US-based Holtec International for SMR development, but the ‘810’ authorization remains a major hurdle. Towards the end of its tenure, the Biden administration initiated work on granting an authorization to Holtec, but progress was limited by time constraints.
• The new administration is expected to revisit this issue, which could unlock the commercial potential of the Indo-US civil nuclear deal nearly two decades after its inception.

Significance of SMRs for India

• SMRs, with a capacity of 30 MWe to 300 MWe per unit, are increasingly seen as a cost-effective and flexible solution for nuclear energy. India is positioning itself as a leader in the SMR space, integrating it into its clean energy transition and using it as a diplomatic tool.
• Globally, only two SMR projects—Russia’s Akademik Lomonosov and China’s HTR-PM—have reached commercial operations. Several Western firms, including Holtec International, Rolls-Royce, NuScale, Westinghouse, and GE-Hitachi, are in various stages of SMR certification.
• India’s push for SMRs aligns with its energy security goals and technological ambitions, making the success of the India-US 123 Agreement even more critical.

2) The India-US TRUST Initiative: Strengthening Critical Minerals and Pharma Supply Chains

GS 2: International Relations: Enhancing Critical Minerals Supply Chain

Why is it in the news?

• India and the United States have launched the Transforming Relationship Utilizing Strategic Technology (TRUST) initiative to foster cooperation in the recovery and processing of critical minerals, such as lithium and rare earth elements (REEs).
• This initiative aims to reduce barriers to technology transfer, address export controls, and enhance high-tech commerce.
• The initiative places a strong emphasis on creating robust supply chains for critical minerals, advanced materials, and pharmaceuticals, marking a key step in deepening bilateral engagement between the two countries.

Strategic Focus on Critical Minerals

• The TRUST initiative follows India’s induction into the US-led Minerals Security Finance Network in September 2023, which aims to enhance global critical mineral supply chains.
• By focusing on the recovery and processing of minerals like lithium and rare earth elements, the TRUST initiative aims to counter China’s dominance in these supply chains. It seeks to accelerate existing efforts by both nations, fostering deeper collaboration in sectors that rely heavily on critical minerals.

Boosting Innovation Across Sectors

• The TRUST initiative is expected to catalyse innovation across multiple sectors, including defence, artificial intelligence (AI), semiconductors, quantum computing, biotechnology, energy, and space.
• Further, the collaboration between governments, academia, and the private sector will drive advancements in these critical fields. Additionally, the creation of strong supply chains for pharmaceuticals is a significant focus, particularly concerning active pharmaceutical ingredients (APIs), which rely on minerals like lithium, magnesium, and zinc.
• India is the world’s second-largest manufacturer of APIs, and the TRUST initiative aims to enhance this sector’s resilience and competitiveness.

Enhancing India’s Pharmaceutical Sector

• The pharmaceutical sector is a key area of cooperation within the TRUST initiative. In 2023, India’s pharmaceutical exports to the US accounted for 21.9% of the $20 billion in final consumer goods exported.
• However, this sector faces vulnerability from potential tariffs, such as those that could be imposed by the Trump administration. Strengthening supply chains for critical minerals used in pharma production will help safeguard this vital sector against future challenges.

Building on National Programmes

• The TRUST initiative builds on significant national programmes launched by both countries to advance the critical minerals sector. In 2020, the US Energy Act authorized $675 million for the Critical Minerals and Materials (CMM) programme to diversify and expand supply chains.
• Additionally, the US introduced the Battery and Critical Mineral Recycling programme in 2024, with grants worth $125 million for R&D to promote battery recycling.
• In India, the National Critical Minerals Mission was approved in January with a budget of Rs 16,300 crore over seven years, which includes substantial funding for exploration and recycling of critical minerals. These national programmes align with the TRUST initiative to deepen cooperation in the sector.

Challenges and Opportunities for Collaboration

• While the TRUST initiative provides an avenue for deeper cooperation, it falls short of granting Indian companies tax benefits from the US Inflation Reduction Act (IRA), which were extended to Japan in 2023.
• However, the bilateral nature of the initiative presents significant opportunities for collaboration in critical minerals and advanced materials.
• The initiative also builds on the Minerals Security Finance Network (MSFN), which aims to bring together development finance institutions (DFIs) and export credit agencies (ECAs) from participating nations to catalyse investment in critical minerals supply chains.

Importance of Critical Minerals for Strategic Sectors

• Critical minerals and rare earth elements are essential for industries such as defence, semiconductors, quantum computing, energy, and space. These materials are used in high-performance magnets for missiles, fighter jets, and radars, as well as in advanced batteries for energy storage and electric vehicles.
• Elements like gallium and indium are crucial for semiconductors and AI hardware, while REEs such as europium and terbium play a role in biotechnology and medical diagnostics.
• Rare earth magnets are vital for wind turbines, and space technology relies on lightweight, heat-resistant materials like scandium.

Geopolitical Context and National Security

• With China controlling nearly 70% of global REE production and much of the processing infrastructure, the diversification of critical mineral supply chains is critical for technological sovereignty and national security.
• Although India has some reserves, it remains dependent on imports, particularly for heavy rare earth elements.
• The TRUST initiative’s focus on critical minerals offers India an opportunity to strengthen its supply chains and reduce dependency on Chinese sources, enhancing both technological independence and national security.

3) India-U.S. Trade Deal: Implications for India

GS 2: International Relations: Enhancing India-U.S. trade ties

Why is it in the news?

• PM Narendra Modi and U.S. President Donald Trump have announced plans to negotiate a Bilateral Trade Agreement (BTA) this year. This agreement aims to be a mutually beneficial, multi-sector deal focused on specific goods rather than broad trade liberalization.
• As part of ‘Mission 500,’ both nations plan to double their trade volume from $200 billion to $500 billion by 2030. To facilitate negotiations, senior representatives from both sides will work towards increasing market access while reducing tariff and non-tariff barriers.

U.S. Tariffs and Trade Imbalances

• Despite the commitment to a trade deal, President Trump announced new reciprocal tariffs on all U.S. trading partners, including India. He argued that India’s tariff structure restricts access to American products, such as automobiles, calling it a “big problem.”
• Trump has already imposed 25% tariffs on aluminium and steel, impacting Indian exports. The U.S. aims to bridge the trade gap by increasing its energy exports to India, particularly in oil and gas.

Challenges in Previous Trade Negotiations

• India and the U.S. have attempted trade agreements before, but key obstacles remain. The Indo-Pacific Economic Framework for Prosperity (IPEF), a U.S.-led trade bloc including India, failed to agree on a trade pillar in 2022 due to the lack of tariff reductions or increased U.S. market access.
• Additionally, Trump previously revoked India’s access to the Generalized System of Preferences (GSP) program, which allowed duty-free entry for over $5 billion worth of Indian exports.

Political Sentiment in the U.S. Against Trade Concessions

• S. lawmakers have become more reluctant to grant foreign market access due to job losses in the industrial belt following China’s entry into the WTO.
• A 2017 study by the National Bureau of Economic Research found that rising import competition from China contributed to a rightward shift in U.S. political sentiment, ultimately benefiting Trump in the 2016 election.
• Experts suggest that under a BTA, India would likely be required to lower tariffs for American goods rather than the U.S. reciprocating, as American tariffs are already among the lowest globally.

Skepticism Over Trade Deals with the U.S.

• The Global Trade Research Institute (GTRI) argues that this may not be the best time for India to pursue a trade deal with the U.S., given the Trump administration’s history of disregarding Free Trade Agreements (FTAs).
• The U.S. imposed tariffs on Mexico and Canada on steel and aluminum despite the United States-Mexico-Canada Agreement (USMCA), raising concerns about the stability of agreements under the current regime.

India’s Trade Margins and Competitive Challenges

• India faces challenges in securing favourable trade margins due to its higher average tariff levels compared to competing nations. The country has signed fewer FTAs than its competitors, which has led to trade imbalances.
• A 2022 Delhi Policy Group report highlighted that ASEAN countries export more to India than they import due to tariff structures.
• Additionally, a 2023 IIM Ahmedabad report pointed out that India’s manufacturing sector remains weak, with exports dominated by low- to medium-tech products. This limits India’s competitiveness in global trade compared to low-cost producers in Asia.

Pressure on the U.S. to Reduce Trade Deficit

• Although India has lowered basic customs duties on several items, the U.S. continues to highlight tariff imbalances.
• According to the White House, India imposes an average tariff of 39% on agricultural goods compared to the U.S.’s 5% and maintains a 100% tariff on American motorcycles while the U.S. charges only 2.4% on Indian motorcycles.

Rising Trade Surplus with the U.S.

• India’s trade surplus with the U.S. has more than doubled in the past five years, increasing from $17.3 billion in 2019-20 to $35.33 billion in 2023-24.
• The surge is driven by exports of electronic and engineering goods, while traditional sectors like gems, jewellery, and textiles have remained relatively stable.

India’s Growing Energy Imports from the U.S.

• To address trade imbalances, India has significantly increased its energy imports from the U.S., reaching $15 billion last year. Foreign Secretary noted that this figure could rise to $25 billion in the near future, helping narrow the trade deficit.

Key Imports and Exports Between India and the U.S.

• In 2023-24, India’s imports from the U.S. grew at a slower pace than its exports. The top five imports from the U.S. accounted for 60% of total imports, with mineral fuels being the largest category.
• On the other hand, the top five export items comprised 67% of India’s total exports, with engineering goods leading the list.

Conclusion

• While India and the U.S. are working towards a trade deal, significant challenges remain, including tariff disparities, political opposition in the U.S., and India’s lower FTA engagement.
• India’s rising trade surplus and increasing energy imports from the U.S. could help balance the trade equation, but the overall success of a Bilateral Trade Agreement will depend on how both nations navigate these complexities.

4) PMDKY: Boosting Agricultural Productivity and Farmer Welfare

GS 3: Economy: Enhancing agricultural productivity

Why is it in the news?

• Finance Minister Nirmala Sitharaman announced the launch of the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY) during the Union Budget on February 1. The scheme aims to enhance agricultural productivity and provide targeted support to farmers.

Inspired by the Aspirational Districts Programme (ADP)

• PMDKY is modelled on the Aspirational Districts Programme (ADP), which was launched in January 2018 by PM Modi. The ADP aimed to transform 112 of the most underdeveloped districts using a framework based on Convergence, Collaboration, and Competition.
• The performance of districts was measured across 49 Key Performance Indicators under five socio-economic themes: Health & Nutrition, Education, Agriculture & Water Resources, Financial Inclusion & Skill Development, and Infrastructure.
• PMDKY follows a similar strategy to uplift agricultural performance in identified districts.

Coverage and Selection of Districts

PMDKY will focus on 100 districts, identified based on three key parameters:

• Low agricultural productivity
• Moderate cropping intensity
• Below-average credit availability
• Cropping intensity, which measures the efficiency of land use, will be a major consideration. The all-India cropping intensity was 155% in 2021-22, a significant rise from 111% in 1950-51, though it varies across states.

Objectives of PMDKY

The scheme aims to achieve five major objectives:

• Enhancing agricultural productivity through improved practices and technology.
• Promoting crop diversification and sustainable farming methods.
• Augmenting post-harvest storage at the panchayat and block levels to reduce wastage.
• Improving irrigation facilities to ensure better water availability.
• Facilitating access to farm credit, both short-term and long-term, for farmers.

According to the FM, the program is expected to benefit 1.7 crore farmers across India.

Funding and Implementation

• However, the Budget documents do not specify a separate allocation for PMDKY. Instead, funds will be drawn from existing schemes under the Ministry of Agriculture and Farmers’ Welfare and the Ministry of Fisheries, Animal Husbandry, and Dairying.
• The government may announce a specific allocation after formal approval by the Union Cabinet and before the scheme is rolled out on the ground.
• PMDKY is expected to provide holistic support to farmers by addressing key agricultural challenges and ensuring better financial and infrastructural resources, ultimately improving rural livelihoods.

5) Concerns and Implications of China’s Mega-Dam Project on the Brahmaputra River

GS 2: International Relations: Concerns over China’s mega dam project

Why is it in the news?

• China’s plan to build the world’s largest hydropower dam on the Brahmaputra River (Yarlung Tsangpo in Tibet) has sparked major concerns among downstream nations, particularly India and Bangladesh.

China’s Mega-Dam Project

• Capacity: Planned at 60 GW under China’s 14th Five-Year Plan (2021–2025), making it three times more powerful than the Three Gorges Dam.
• Objective: Reduce dependence on fossil fuels and progress towards carbon neutrality by 2060.
• Estimated Cost: Around $137 billion.
• Location: The dam is set to be constructed at the Great Bend of the Yarlung Tsangpo in Tibet’s Medog county.
• Previous Projects: China has already developed significant hydropower projects like the Three Gorges Dam (Yangtze) and Zangmu Dam (Yarlung Zangbo).

Potential Impacts of China’s Dam

Environmental and Ecological Risks

• Changes in Water Flow & Reduced Sediment Supply: The Brahmaputra carries nutrient-rich sediments that support agriculture in downstream regions. Dams trap these sediments, reducing soil fertility and harming farmers in India and Bangladesh.
• Higher Flood Risk: Sudden water releases from Chinese reservoirs could trigger flash floods in Assam and Arunachal Pradesh, as seen in past instances where unexpected water discharges caused severe damage.
• Threat to Biodiversity: Disruptions in water flow can harm aquatic life, including the endangered Gangetic dolphin, by altering breeding cycles and destroying habitats.
• Climate Change and Glacier Melt: The Tibetan Plateau, often called the “Third Pole,” plays a crucial role in global climate regulation. Increased damming and infrastructure projects in this ecologically sensitive area could worsen glacier melt and disrupt weather patterns.
• Seismic Hazards: The Himalayas are prone to earthquakes, and constructing a massive dam in a seismically active zone raises the risk of disasters like landslides and structural failures.

Geopolitical and Strategic Concerns

• India’s Water Security at Risk: Since the Brahmaputra is vital for agriculture and drinking water, India fears China could manipulate water flow, either by withholding it during droughts or releasing excess water to cause floods.
• Legal Challenges: International laws, such as the UN Convention on Non-Navigational Uses of International Watercourses (1997), stress fair and reasonable use of transboundary rivers. However, China is not a signatory, giving it unilateral control over these waters.
• Limited Bilateral Mechanisms: Although China and India have had an Expert Level Mechanism (ELM) since 2006 for hydrological data sharing, there is no legally binding treaty regulating water use.
• Regional Tensions: Other nations like Vietnam, Cambodia, and Thailand have faced similar issues with China’s upstream dams on the Mekong River, raising concerns about Beijing’s water management policies.
• Economic and Social Consequences: Large dams often displace local communities, disrupt irrigation systems, and deplete fish stocks, threatening food security and livelihoods in India and Bangladesh.

India’s Response and Strategic Measures

Enhancing Domestic Water Infrastructure:

• India is accelerating dam and hydropower development in Arunachal Pradesh, including the proposed Siang Upper Multipurpose Project (SUMP), to strengthen water security and energy production.

Diplomatic and Regional Cooperation:

• India is working closely with Bangladesh and other South Asian nations to build a collaborative approach for managing shared water resources.

Advanced Monitoring and Early Warning Systems:

• Using satellite surveillance and improved flood prediction models, India is enhancing its ability to track Chinese water activities and respond to potential risks.

Legal and International Strategies:

• India could push for stronger regional agreements on transboundary water management and seek international arbitration in case of disputes over river flows.

Conclusion

• China’s mega-dam on the Brahmaputra presents serious environmental, strategic, and economic challenges for India and Bangladesh.
• While India is adopting multiple measures, including infrastructure development, diplomatic engagement, and advanced monitoring, a long-term solution requires a binding regional agreement to ensure equitable water use and mitigate risks.

6) NTPC Wins Forward Faster Sustainability Award 2025 for Water Resilience

GS 3: Economy: NTPC’s Contribution towards sustainability

Why is it in the news?

• NTPC Ltd., India’s largest integrated power utility, has been awarded the Forward Faster Sustainability Award 2025 in the Water Resilience category.
• The award was presented at a ceremony organized by the UN Global Compact Network India (UN GCNI) in Chennai on 13th February 2025.

More about the news

• The Forward Faster Sustainability Awards recognize organizations that have made significant contributions toward sustainability and corporate responsibility, aligning with the United Nations Sustainable Development Goals (SDGs).
• NTPC follows the Reduce, Reuse & Recycle principles to optimize water usage. It has implemented advanced wastewater treatment plants and achieved 100% sweet water self-sufficiency at Ratnagiri Gas and Power Private Limited (RGPPL), setting industry benchmarks in water conservation.
• Additionally, the company is actively involved in community water access projects, restoration of local water bodies, and awareness campaigns on conservation, further strengthening its water resilience initiatives.

About NTPC’s Contributions

• As India’s largest power utility, NTPC contributes nearly one-fourth of the country’s electricity requirements. It has an installed capacity of over 77 GW, with an additional 29.5 GW under construction, including 9.6 GW of renewable energy.
• The company has set a target of 60 GW renewable energy capacity by 2032 to drive India’s clean energy transition.
• NTPC operates a diverse mix of thermal, hydro, solar, and wind power plants to ensure reliable, affordable, and sustainable electricity. The company continues to adopt best practices, foster innovation, and integrate clean energy technologies to build a greener future.
• Beyond power generation, NTPC is expanding into e-mobility, battery storage, pumped hydro storage, waste-to-energy, nuclear power, and green hydrogen solutions. These initiatives align with its long-term vision of energy sustainability and environmental stewardship.