UPSC Current Affairs 8th July 2026

India-Indonesia bilateral relations

• India and Indonesia strengthened their Comprehensive Strategic Partnership through expanded cooperation in defence, maritime security, critical minerals, digital infrastructure, space and agriculture. 
• Despite growing strategic convergence, trade imbalance, palm oil dependence, China’s economic dominance and geopolitical differences remain key challenges requiring deeper economic integration and practical Indo-Pacific cooperation.
• Policy Evolution: Institutional relations progressed under India’s ‘Look East Policy’ (1991) and were structurally upgraded to the ‘Act East Policy’ (2014), culminating in the celebration of 75 years of diplomatic ties in 2024.

The Prime Minister of India  concluded a State Visit to Indonesia; he was conferred Indonesia’s highest national honour (35th international honour) , the Bintang Adipurna, becoming the second Indian Prime Minister after Jawaharlal Nehru to receive the country’s highest honour.

The State Visit of the Prime Minister of India to Indonesia from July 6–8, 2026, marked a significant milestone in the Comprehensive Strategic Partnership between the two nations. Following bilateral talks in Jakarta, the two leaders oversaw the signing of 14 key agreements covering a broad spectrum of cooperation.

Below are the key outcomes categorized by sector:

1. Defence and Maritime Security

• Missile Exports: A landmark contract was signed for the supply of BrahMos supersonic cruise missile systems (two batteries) and the Astra air-to-air missile system, making Indonesia a key export partner for Indian-made defence technology.
• Maritime Infrastructure: The two nations agreed to the joint development of Sabang Port at the northern tip of Sumatra, enhancing India’s strategic reach near the Strait of Malacca.
• Intelligence & Coordination: Indonesia will deploy a Liaison Officer to the Information Fusion Centre for the Indian Ocean Region (IFC-IOR) in Gurugram, India, to boost real-time maritime domain awareness.
• Operational Security: The MoU on Maritime Safety and Security Cooperation was renewed, with a new implementation arrangement between the Indian Coast Guard and the Indonesian Coast Guard (Bakamla RI).

2. Critical Minerals and Industrial Cooperation

• Steel Manufacturing: A strategic joint venture was established between the Steel Authority of India (SAIL) and PT Krakatau Steel to set up a high-capacity stainless-steel slab manufacturing facility in Indonesia.
• Supply Chain Resilience: A new MoU was signed to cooperate on the extraction and technology of the steel and mineral supply chain, with a specific focus on critical minerals like nickel, copper, bauxite, and tin.
• Advanced Tech: An agreement was reached for the joint development of Rare Earth Magnets, essential for EVs and advanced electronics.

3. Technology, Space, and Education

• Digital Public Infrastructure (DPI): The launch of the Indonesia Open Network (ION), modeled after India’s ONDC, to boost the participation of Indonesian MSMEs in the digital economy.
• Space Cooperation: The framework agreement for peaceful exploration and use of outer space was formally extended.
• Academic Expansion: An agreement was signed to establish a branch campus of the Indian Institute of Management (IIM) Bangalore at the Singhasari Special Economic Zone in East Java.

4. Health, Agriculture, and Governance

• Regulatory Harmonization: An MoU between India’s CDSCO and Indonesia’s BPOM to harmonize medical product regulations, alongside an agreement on health workforce collaboration and skill enhancement.
• Food Security: A comprehensive MoU on Agriculture and the strategic supply of 100 tonnes of high-quality DWR 162 wheat seeds to Indonesia.
• Disaster Management: An institutional linkage established between the National Disaster Management Authorities of both countries for better crisis response and mitigation.
• Electoral Best Practices: An agreement between the Election Commission of India (ECI) and Indonesia’s General Elections Commission (KPU) to share expertise in managing large-scale democratic exercises.

5. Cultural Diplomacy

• Heritage Restoration: The two leaders inaugurated restoration and conservation works at the Prambanan Temple Complex in Yogyakarta, conducted with technical assistance from the Archaeological Survey of India (ASI).
• Commemorative Year: The two countries designated 2026–2027 as the “Tagore–Dewantara Year of India–Indonesia Cultural and Educational Diplomacy” to celebrate the centenary of Rabindranath Tagore’s visit to Indonesia.

Challenges in India-Indonesia Relations? 

• The “Quad” vs. ASEAN Centrality: Indonesia strictly adheres to its Bebas-Aktif (Independent and Active) foreign policy.
  • While India views the Quad as a vital security architecture for a free Indo-Pacific, Indonesia views minilateral groupings with high caution, fearing they provoke China and undermine “ASEAN Centrality.” 
• Hesitance on Anti-China Balancing: Despite purchasing the BrahMos system, Indonesia meticulously avoids any overt military alignment that could be construed as an anti-China bloc.
  • They prefer localized capacity building over India’s broader strategic balancing efforts against Beijing. 
  • Indonesia’s deep economic integration with China, particularly in infrastructure and nickel-based EV supply chains, overshadows India’s investment footprint and limits New Delhi’s ability to emerge as a major economic alternative. 
• Trade Imbalance and Palm Oil Vulnerability: Bilateral trade of around USD 28–30 billion remains heavily skewed in Indonesia’s favour, driven by India’s large imports of palm oil.
  • Indonesia’s diversion of palm oil towards domestic biofuels could tighten global edible oil supplies and fuel food inflation in India.  
• Protectionist Frictions: Conversely, Indian domestic industries (especially textiles) frequently raise alarms over the influx and alleged dumping of Indonesian products like Viscose Staple Fibre (VSF), leading to defensive trade posturing.  

Mains

Q. Indian Diaspora has an important role to play in South East Asian countries’ economy and society. Appraise the role of Indian Diaspora in South-East Asia in this context. (2017) 

Q. Explain the formation of thousands of islands in Indonesian and Philippines archipelagos. (2014)

INDIA’S UNSC CAMPAIGN BEGINS

India is officially set to launch its campaign for a non-permanent seat at the United Nations Security Council (UNSC) for the 2028–29 term. The campaign will be formally initiated by External Affairs Minister S. Jaishankar, who is scheduled to lead the diplomatic push during a visit to New York.

Key Aspects of the Bid

• Strategic Objective: The campaign is a reflection of India’s ongoing ambition to strengthen its role in global governance. Beyond securing a seat, India aims to leverage this platform to champion the interests of the Global South and push for meaningful, long-term structural reforms within the UNSC, including permanent membership expansion.
• The Competitive Landscape: India faces a direct contest for the Asia-Pacific seat from Tajikistan. This race is expected to be challenging; while India has garnered support from various nations (including Fiji, the United States, Austria, and Sri Lanka), Tajikistan reportedly has the backing of the 57-member Organisation of Islamic Cooperation (OIC) bloc.
• Diplomatic Mobilization: EAM Jaishankar has been conducting extensive outreach to countries in the Gulf, Caribbean, and other regions to build broad-based support. The upcoming Shanghai Cooperation Organisation (SCO) summit, where both India and Tajikistan will participate, is viewed as a significant forum for navigating these diplomatic ambitions.
• Evolving Dynamics: The competitive nature of such contests has been highlighted by recent trends, including the June 2026 election where Kyrgyzstan defeated the Philippines for a 2027–28 seat. This indicates that global realignments and bloc-based voting are playing a larger role in UNSC elections than in the past.

India’s Priorities at the UNSC

If elected, India intends to focus on several core areas that define its “responsible stakeholder” narrative:

• Global Governance & Reform: Advocating for the expansion of both permanent and non-permanent categories to better reflect contemporary geopolitical realities.
• Global South Issues: Prioritizing energy security, the stability of fertilizer and food supply chains, and development-oriented security.
• Multilateral Accountability: Addressing the misuse of the veto power and promoting greater transparency and consultation in Council decision-making processes.

Mains

Q. “The long-sustained image of India as a leader of the oppressed and marginalised nations has disappeared on account of its new-found role in the emerging global order.” Elaborate. (2019)

Q. Discuss the impediments India is facing in its pursuit of a permanent seat in the UN Security Council. (2015)

PRELIMS

Q. With reference to the “United Nations Credentials Committee”, consider the following statements: [2022]

1. It is a committee set up by the UN Security Council and works under its supervision.
2. It traditionally meets in March, June and September every year. 
3. It assesses the credentials of all UN members before submitting a report to the General Assembly for approval. 

Which of the statements given above is/are correct? 

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

Ans: (a) 

BHAVYA Industrial Parks Scheme

Recently, the Union Commerce and Industry Minister chaired the Board of Trade meeting in New Delhi and urged States to prioritise exports, fully utilise the BHAVYA Industrial Parks Scheme, and strengthen India’s export competitiveness through Centre-State-industry coordination. The Bharat Audyogik Vikas Yojana (BHAVYA) is a Central Sector Scheme of the Department for Promotion of Industry and Internal Trade (DPIIT) to develop 100 investment-ready, world-class industrial parks across India. 

• Financial Outlay: The scheme has a total outlay of around ₹33,660 crore and will be implemented over six years from 2026-27 to 2031-32. 
• Industrial Park Development: BHAVYA will support both greenfield and eligible brownfield industrial parks, with minimum land requirements of 100 acres for non-hilly states and 25 acres for hilly, Northeastern, Union Territory and smaller states. 
• Challenge-Based Selection: In the first phase, up to 50 industrial parks will be selected through a competitive process based on connectivity, site suitability, infrastructure quality, industrial ecosystem, policy support, digital readiness and sustainability. 
• Key Infrastructure Features: The parks will include plug-and-play facilities, multimodal logistics connectivity, reliable power and water supply, underground utilities, waste management, common effluent treatment plants, testing laboratories, worker housing, renewable energy systems and digital single-window systems. 

Impact of climate change on Indian Dairy

The recent study published in Scientific Reports highlights a critical vulnerability in India’s dairy sector, particularly in the trans-Gangetic plains (like Haryana), where climate-induced heat stress is directly undermining milk productivity.

Key Findings of the Study

• The “Heat Trap”: Milk yield drops significantly when temperatures exceed 38°C and relative humidity rises above 70%. This is especially problematic during the July–August monsoon overlap.
• PET as a Metric: Potential Evapotranspiration (PET) is identified as a key indicator of heat stress; for every unit increase in PET, milk yield drops by approximately 1.4 litres per buffalo per day.
• Economic Impact: Heat stress currently results in an annual national loss of 3.2 million tonnes of milk, valued at approximately ₹2,661 crore. Projections indicate this loss could escalate to 15 million tonnes by the 2050s without significant adaptation.
• Breed Vulnerability:
  • Buffaloes are the most vulnerable due to their dark skin and limited sweat glands.
  • Cross-bred cattle also suffer significantly due to high metabolic heat.
  • Indigenous breeds (e.g., Sahiwal, Gir, Hariana) demonstrate higher resilience due to better physiological heat dissipation mechanisms.

Implications for the Dairy Ecosystem

The decline in productivity poses a systemic threat across several dimensions:

• Economic & Livelihood Security: With 80 million smallholder farmers—70% of whom are women—relying on dairy, declining yields directly threaten household incomes and rural financial stability.
• Food & Nutritional Security: Milk is a primary source of high-quality protein for India’s largely vegetarian population. Reduced supply risks increasing retail prices, which could adversely affect the effectiveness of public nutrition programs like POSHAN Abhiyaan.
• Agricultural GVA: Since the livestock sector contributes roughly 30% of Agricultural GVA, productivity loss acts as a drag on overall agricultural growth.
• Environmental Feedback Loops: Farmers may be forced to increase herd sizes to compensate for lower yields, which in turn leads to increased methane emissions, overgrazing, and greater demand for limited fodder.

Government Initiatives & “White Revolution 2.0”

To mitigate these risks, the government is shifting focus toward a more resilient dairy architecture. Key ongoing initiatives include:

• National Programme for Dairy Development (NPDD): Strengthens organized milk procurement, infrastructure, and quality testing, with recent updates (2025–26) expanding support for climate-resilient processing in hilly and North-Eastern regions.
• Rashtriya Gokul Mission (RGM): Focuses on the conservation and genetic improvement of indigenous cattle breeds, which are naturally more heat-tolerant.
• Animal Husbandry Infrastructure Development Fund (AHIDF): Provides financial support for creating modern, climate-smart infrastructure like temperature-controlled sheds and water systems.
• Digital Integration: Programs like Bharat Pashudhan are being used for better disease surveillance and data-driven livestock management.

Pathways for a National Climate-Smart Strategy

Experts advocate for a transition toward “White Revolution 2.0,” characterized by:

1. Early-Warning Systems: Integrating THI (Temperature-Humidity Index) and PET data into regional agricultural forecasts to alert farmers before heatwaves.
2. Thermo-Tolerant Breeding: Prioritizing traits of indigenous breeds in breeding programs rather than focusing solely on high-yield, heat-sensitive cross-breeds.
3. Climate-Smart Infrastructure: Scaling subsidies for shaded sheds, misting systems, and natural canopy development through agroforestry.
4. Risk Financing: Implementing heat-index-based insurance products to protect smallholder farmers from income shocks caused by extreme weather.

Prelims 

Q. As per the NSSO 70th Round “Situation Assessment Survey of Agricultural Households”, consider the following statements: (2018)

1. Rajasthan has the highest percentage share of agricultural households among its rural households.   
2. Out of the total agricultural households in the country, a little over 60 percent belong to OBCs.  
3. In Kerala, a little over 60 percent of agricultural households reported to have received maximum income from sources other than agricultural activities.  

Which of the statements given above is/are correct?

(a) 2 and 3 only 

(b) 2 only

(c) 1 and 3 only 

(d) 1, 2 and 3 

Ans: (c)

Mains

Q. Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India. (2015)

World Bank Income Classification 2026-27

The World Bank’s Fiscal Year 2027 Country Income Classifications (released in July 2026) highlight a widening gap in regional growth trajectories. While several developing nations successfully climbed the income ladder, India remained steady in the Lower-Middle-Income bracket—a status it has maintained for nearly two decades.

1. Major Global Shifts in the FY27 Update

The global income landscape has changed dramatically over the last few decades. In 1987, nearly 30% of the world’s economies were classified as low-income; by 2026, that number plummeted to just 11%.

In the latest cycle, six nations successfully crossed into higher brackets:

2. The Current World Bank Brackets (FY27)

The World Bank updates its thresholds every July 1st. To eliminate short-term currency volatility, it uses the Atlas Method, which calculates Gross National Income (GNI) per capita using a three-year moving average of exchange rates, adjusted for global inflation via the Special Drawing Rights (SDR) deflator.

Important Distinction: GNI per capita measures the average economic output per person, but it is an operational tool for lending eligibility—not a complete measure of human development, health, or inequality.

• Low-Income: $\$1,175$ or less
• Lower-Middle-Income: $\$1,176$ – $\$4,635$ (Current category for India at $\$2,760$ GNI per capita)
• Upper-Middle-Income: $\$4,636$ – $\$14,375$ (Current category for Sri Lanka, Vietnam, Philippines)
• High-Income: More than $\$14,375$

3. Why India Remains in the Lower-Middle-Income Bracket

Despite being one of the world’s fastest-growing major economies, India’s transition to the “Upper-Middle” bracket is bottlenecked by deeply entrenched structural realities:

• The Population Denominator: India’s aggregate GDP growth is diluted when distributed across its massive 1.4+ billion population. To push GNI per capita past the $\$4,636$ upper-middle threshold, the economy requires decades of sustained, compounding growth.
• The Informality Trap: Close to 85% of India’s workforce operates in the informal sector, with a high concentration of low-productivity agricultural labor. This keeps average wages low and limits the expansion of a formal tax base.
• Intra-State Disparities: High-performing, industrialized states (like Tamil Nadu, Gujarat, and Maharashtra) possess per capita incomes that approach or match upper-middle-income levels. However, low-productivity, highly populous states (such as Bihar and Uttar Pradesh) pull down the national statistical average.
• Historical Baseline: India only graduated from the “Low-Income” category in 2009. Moving up a tier effectively requires doubling or tripling per capita earnings from that base, which is historically a multi-decade structural evolution.

4. Operational Implications of the Status

A country’s income classification dictates its financial relationship with international institutions:

• Lending Terms: Low-income nations rely on highly concessional grants from the International Development Association (IDA). Middle-income nations like India primarily borrow from the International Bank for Reconstruction and Development (IBRD) under less concessional, market-aligned terms.
• Global Aid & Trade: Donor nations use these brackets to allocate foreign assistance, while certain preferential trade schemes and climate finance frameworks prioritize funding based on lower-income vulnerability.