Daily Current Affairs and News Analysis 27-08-2025

Advancing Defense Framework: India and the US are working on a new 10-year defense framework to boost defense production, cooperation, and industrial ties. This signifies a commitment to deepening military partnership and technology sharing.

Strengthening Trade and Energy Security: Discussions included enhancing trade and investment, civil-nuclear cooperation, and critical minerals exploration, indicating a focus on economic and energy interdependence.

Reaffirming Indo-Pacific Commitment via Quad: Both nations reaffirmed their dedication to a secure, strong, and prosperous Indo-Pacific region through the Quad. This is particularly timely as India prepares to host the 2025 Quad Leaders Summit, highlighting the alliance’s strategic importance.

First Bilateral Contact Amidst Tariffs: This dialogue served as the first official communication after recent US tariffs on Indian goods, signifying a diplomatic effort to manage tensions and maintain bilateral engagement despite economic disputes.

COMPACT Framework Advancement: Cooperation will be strengthened under the US-India COMPACT framework, aimed at accelerating military partnership, commerce, and technology for the future.

Why in News: Parliamentary Standing Committee highlights escalating cyber threats and calls for better public awareness, cyber safety, and digital security due to increased internet use and online transactions.

Key Cyber Threats:

• Financial Frauds: Surge in phishing, ransomware, identity theft, UPI, and online banking scams (1.91 million complaints in 2024).
• Ransomware & Malware: Targeting hospitals, government, and private enterprises (e.g., AIIMS Delhi attack).
• Critical Infrastructure Vulnerability: Risks to power grids, telecom, nuclear facilities from cyber sabotage (e.g., Kudankulam attack).
• Data Breaches: Large-scale personal data leaks from government and private sectors (e.g., Air India breach).
• Deepfakes & Misinformation: Threatening social cohesion and elections through AI-generated fake content.
• Dark Web: Exploited for radicalization, illegal trade, and terror financing.

Factors Undermining Framework:

• Inadequate Laws: Existing laws like IT Act, 2000, lack provisions for AI/deepfake threats; DPDP Act, 2023 needs strong enforcement.
• Skilled Professional Shortage: Significant gap in cybersecurity experts (need 1 million, have less than half).
• Rapid Digitalization & Low Awareness: Increased threats alongside low cyber hygiene and limited digital literacy, especially in rural areas.
• Weak Critical Infrastructure Protection: Outdated protocols, reliance on imported equipment.
• Fragmented Agency Coordination: Limited cooperation between agencies like CERT-In and NCIIPC.

Strengthening Measures:

• Strengthen Legal Framework: Update IT Act for AI/deepfakes; enforce DPDP Act.
• Institutional Reforms: Mandate cybersecurity audits, establish district-level units.
• Secure Critical Infrastructure: Enforce 2FA, encryption, real-time monitoring, Zero-Trust Architecture.
• Promote Indigenous Solutions: Support “Make in India” tools and AI-based threat detection startups.
• Improve Cyber Hygiene: Launch nationwide literacy campaigns in regional languages; integrate cybersecurity in education.

Why in News: RBI affirmed the successful performance of the Flexible Inflation Targeting (FIT) framework in maintaining price stability, with inflation remaining low and stable since its introduction.

What is FIT:

• Adopted in 2016 based on Urjit Patel Committee recommendations.
• Aimed to improve monetary policy credibility after high inflation post-Global Financial Crisis.
• Targets CPI inflation at 4% with a ±2% tolerance band (2%-6%).
• Allows short-term deviations to manage supply shocks and economic crises, prioritizing growth during downturns while returning to the target medium-term.

Performance:

• Successes: Achieved disinflation (average 4.9% post-FIT vs 6.8% pre-FIT), anchored expectations, increased transparency via MPC, and provided policy flexibility during crises.
• Challenges: Faced exogenous shocks (pandemic, conflicts), an outdated CPI base year, and periodic dissent/interference within the MPC.

Key Debates:

• Headline vs. Core Inflation:
  • Headline: More representative, global norm, aligns with household experience.
  • Core: More stable, better reflects demand pressures, avoids reacting to supply shocks.
• Point Target vs. Range-Only:
  • Point Target (4% with band): Clear anchor for expectations, promotes clarity and accountability.
  • Range-Only: Greater flexibility, acknowledges forecasting limits, avoids over-tightening.

Way Forward:

• Revise CPI base year.
• Retain core FIT tenets and adaptability.
• Strengthen policy credibility through consistency.
• Address food-energy shocks via complementary supply-side management.

India-EAEU FTA Negotiations Launched: India and the Eurasian Economic Union (EAEU) signed the Terms of Reference (ToR) to start negotiations for a Free Trade Agreement (FTA).

• Why in News: This development follows stalled trade talks with the US and rising US tariff threats, signaling India’s move towards trade diversification.

EAEU Overview: An international organization for regional economic integration, established in 2015, comprising Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and the Russian Federation. Its aim is free movement of goods, services, capital, and labor.

Significance for India:

• Market Access: Provides access to a USD 6.5 trillion market, boosting Indian exports (textiles, pharmaceuticals, engineering, electronics) and benefiting MSMEs.
• Trade Diversification: Reduces dependence on US/EU markets amid tariff disputes and strengthens the India-EAEU economic partnership, with bilateral trade reaching USD 69 billion in 2024.
• Energy Security: Offers access to abundant natural resources and energy vital for India’s growth.
• Connectivity Boost: Complements initiatives like the International North-South Transport Corridor (INSTC) and Chennai–Vladivostok Corridor.

Challenges:

• Trade Deficit: Significant trade deficit with Russia.
• Geopolitical Sensitivity: Potential alarm to NATO/Western allies due to the Russia-led deal and sanctions.
• Domestic Industry Concerns: Risk of cheap imports impacting Indian producers.
• Low FTA Utilization: India’s existing FTAs are underutilized.
• Non-Tariff Barriers: Bureaucratic delays and complex customs procedures.
• SPS Standards: Strict sanitary and phytosanitary standards hindering agricultural exports.
• Dollar Dependency: Reliance on the US dollar for trade, with limited local currency mechanisms.

Extreme heat is a growing global health risk for workers: Climate change is causing more frequent and intense heatwaves (40-50°C+), impacting workers indoors and out.

• Why it’s news: This highlights a tangible, present danger from climate change affecting a significant portion of the workforce.

Productivity and health are severely impacted: Worker productivity drops by 2-3% for every degree above 20°C. Heat stress leads to heatstroke, dehydration, kidney, and neurological disorders.

• Why it’s news: Quantifies the economic and physical toll of heat on workers, showing a direct link between heat and decreased output/health issues.

Millions of workers are at risk: Over 2.4 billion workers globally face excessive heat, resulting in 22.85 million occupational injuries annually. Heat stress is now spreading beyond traditional hot regions.

• Why it’s news: Emphasizes the sheer scale of the problem and its expanding reach, affecting a vast number of individuals and causing widespread injuries.

Vulnerable populations are disproportionately affected: Manual laborers (agriculture, construction, fisheries), older adults, low-income groups, and children/elderly in developing nations are at higher risk.

• Why it’s news: Identifies specific groups that need immediate attention and targeted support, highlighting an issue of inequality exacerbated by climate change.

Urgent policy and practical solutions are needed: Recommendations include developing occupational heat-health policies, raising awareness, co-creating strategies, and implementing affordable, sustainable solutions.

• Why it’s news: Provides actionable steps for governments, employers, and workers, indicating a clear path forward to mitigate the risks.

Aligns with UN Sustainable Development Goals: The report supports SDG 3 (Good Health and Well-being), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

• Why it’s news: Frames the issue within a global framework for development, underscoring its importance for broader societal progress.

India partners with World Food Programme (WFP) to supply fortified rice: A Letter of Intent signed signifies India’s commitment to using its agricultural surplus to support vulnerable populations globally, addressing food and nutritional needs in crisis zones.

• Why in News: This collaboration directly aids in fighting global hunger by leveraging India’s resources for humanitarian distribution.

India’s role as a major global producer and exporter: India is a food-surplus nation and a leading producer of milk, pulses, spices, and grains, exporting various products to support global nutrition.

Champion of food security solutions: India shares agricultural technology and seeds, implements domestic programs like the National Food Security Act and POSHAN Abhiyaan as replicable models, and provides humanitarian food aid to crisis-hit countries.

Advocacy in international forums: India champions developing nations’ rights in WTO negotiations, particularly concerning public stockholding for food security.

Promotion of climate-resilient agriculture: India promotes millets as a sustainable solution to global hunger, aligning with climate-smart practices.

Key Challenges & Solutions:

• Food Wastage: Improve storage and transportation, invest in cold chains.
• Climate Change Vulnerability: Implement climate-resilient agriculture schemes, promote crop diversification, and expand drip irrigation.
• Nutritional Challenges: Fortify foods with micronutrients, implement supplementation programs.
• Public Distribution System (PDS) Issues: Enhance digital tracking, transform fair price shops, and strengthen the One Nation One Ration Card plan.

Contribution to SDGs: India’s efforts directly contribute to SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production).