Domestic defence production reaches record level of Rs 1.27 lakh crore

Defense Minister has announced the 'Aero India' conclave in Bengaluru. During this announcement, he said that defense exports have increased 30 times in the last decade (see infographic).

• Aero India is Asia's largest air show.

• The theme of the current conclave is 'BRIDGE (Building Resilience geo International Defence and Global Engagement)'.

Importance of Defence Indigenisation for India

• Increase in sovereign military capability: Domestic production enables India to avoid global sanctions like the United States' CAATSA. Also, keeps the country's important missiles and equipment safe.

• Preparedness for modern warfare: For example, the scheme Acing Development of Innovative Technologies with iDEX (ADITI) has been launched to develop advanced technologies in the country. The scheme aims to develop about 30 critical deep-tech and strategic technologies within the proposed time frame. It is known that India lacks such technologies.

• India as a one-time security provider: For example, Brahmos missile has been exported to the Philippines. This has increased India's strategic presence in the Indian Ocean region.

• Economic growth: It creates employment opportunities, promotes innovation and attracts investment.

Initiatives launched for indigenisation of defence sector

• Policies and schemes: Defence Production and Export Promotion Policy, 'Make in India', notification of 'Positive Indigenisation List', Innovations for Defence Excellence (iDEX) etc.

• Global cooperation: FDI limits have been increased. 74% FDI is allowed through automatic route and 100% through government route. As a result, there is a possibility of access to modern technology etc.

• Others: Ordnance Factory Board

Corporatisation has been done, defence industrial corridors are being built, SRIJAN portal has been launched etc.

India's rapidly growing defence production sector

Defence Budget

• Rs. 6.21 lakh crore in 2024-25, up from Rs. 2.53 lakh crore in 2013-14
• Defence exports Rs. 21,083 crore in 2023-24 from Rs. 1,941 crore in 2014-15.

Domestic Defence Production

• Rs. 1.27 lakh crore in FY 2023-24, up 174% from Rs. 46,429 crore in 2014-15
• Target: Rs. 3 lakh crore by 2029

Top Export Destinations

United States. France. Armenia

Historic achievement

"Voots manufactured in Vihar have been incorporated in Russian army equipment, highlighting India's growing reputation for high-quality defence production.

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India launches 'EFTA Desk' to strengthen trade and investment ties with EFTA member countries

The EFTA Desk will actually act as the main contact point for businesses with the countries of the European Free Trade Association (EFTA). This desk will provide market information, resolve problems and assist in expanding business.

• main points of TEPA

The EFTA Desk is a key component of the 'India-EFTA Free Trade Agreement (TEPA)'. The TEPA trade agreement was concluded between India and EFTA in 2024.

• First binding free trade agreement (FTA): The agreement promises to generate $100 billion in investment and 1 million direct employment opportunities over the next 15 years.

• Tariff reduction: EFTA has eliminated 92.2% of tariff lines. It is surprising that tariffs have been eliminated on 92.2% of goods exported to EFTA countries. This will benefit 99.6% of India's exports.

• Market access: 100 percent of non-agricultural products have been provided unhindered access to the EFTA market. At the same time, tariff concessions have been given in the market access of processed agricultural products (PAP).

Expanding access to service products: EFTA has provided the following facilities in the trade of service sector:

• Mode I: Delivery of services in digital form.

• Mode 3: Commercial presence i.e. permission to Indian companies to open their branches in EFTA countries.

• Mode 4: Providing temporary migration facility to Indian workers engaged in service sector in EFTA countries.

• Intellectual Property Rights (IPR): This agreement has provisions for strong protection of IPR. These provisions are in line with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

• Recognition of professionals: Indian professionals in fields such as nursing, chartered accountancy and architecture will be recognized in EFTA countries.

• Rules of Origin and Trade Remedies: Clear provisions have been made to ensure smooth trade and protect the interests of domestic producers.

 • Under 'Rules of Origin', only products originating from the countries involved in the agreement will get the benefit of this agreement.

• Under Trade Remedies, steps will be taken to provide protection to domestic producers from imports

Challenges related to TEPA

• India's generic drug industry may be harmed due to strict rules on intellectual property rights.

• There is a trade imbalance between India and EFTA countries. High import of gold from Switzerland is a major reason for this. In such a situation, the Indian government will have to keep a close watch on the implementation of this agreement.

• It is worth noting that this free trade agreement has been concluded after 16 years of long negotiations. This shows that there have been more differences between the two sides. These differences can pose a challenge in the future.

About the European Free Trade Association (EFTA)

• EFTA was formed in 1960. It is an inter-governmental organization of Iceland, Liechtenstein, Norway and Switzerland.

• Its objective is to promote free trade and economic integration.

• Switzerland is India's largest trading partner country among the EFTA countries. It is followed by Norway.

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India issues new Harmonized System (HS) codes for 1 tang rice

(1975) has been amended to provide HS codes for GI recognized rice varieties.

The special notification will allow the export of GI tagged rice without any hindrance.

About HS

• GI is a global product classification system developed by the World Customs Organization (WCO).

Under HS, various categories are classified and a unique six-digit code is provided for goods.

• Countries are allowed to add GI codes after identification, so that more classification can be done.

Updates:

• The Harmonized System is administered by the International Convention on the Harmonized Commodity Description and Coding System.

The HS Committee, composed of member countries, monitors the Harmonized System classification system and also updates it every 5-6 years.

Widely used:

• It classifies about 98% of international trade.

• It includes more than 5,000 commodity groups.

• It has been adopted by more than 200 countries.

Advantages of the Harmonized System (HS):

• This common coding system helps countries organize and track products in global trade.

• Used by governments, international organizations for internal regulation, trade policies, etc.

It is widely used by the governments and private organizations.

• It reduces the cost of international trade and promotes economic research.

About World Customs Organization (WCO)

• Headquarters: Located in Brussels (Belgium).

• Origin: WCO was established in 1952 as the Customs Co-operation Council (CCC).

• Role: It is an independent inter-governmental body. Its objective is to enhance the effectiveness and efficiency of customs administrations.

• Focus: It focuses exclusively on customs matters. Its functions include ensuring simplification and harmonization of customs procedures; developing global standards; safeguarding trade supply chains and facilitating international trade; etc.

• Members: WCO represents 186 members (including India).

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Srijanam

India's first indigenous automated biomedical waste treatment rig was launched at AIIMS (New Delhi). The rig is named 'Srijanam'.

• The device has been developed by CSIR-NIIST (National Institute of Interdisciplinary Science and Technology), Thiruvananthapuram.

The 'Srijanam' rig is designed to decontaminate pathogenic biomedical waste, without relying on expensive and energy-intensive incinerators.

About Biomedical Waste

• Definition: Biomedical waste includes waste generated from diagnosis, treatment, vaccination, research, or biological production/testing in healthcare settings.

• Problems related to biomedical waste in India: According to CPCB, 2023, '743 tonnes of biomedical waste is generated in India every day. It needs safe and efficient disposal.

• Regulation: The Bio-Medical Waste Management Rules, 2016 mandates proper segregation, treatment and disposal.

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Promoting Smart Power and Renewable Energy in India (ASPIRE) Programme

India and the United Kingdom launched the second phase of the bilateral ASPIRE programme as part of the 4th India-United Kingdom Energy Dialogue.

About ASPIRE

• It is a bilateral initiative aimed at promoting clean energy transition and sustainable development in India.

Key focuses under the second phase of ASPIRE:

• Round the clock power supply: Provide technical support to ensure uninterrupted power.

• Renewable energy expansion: Strengthen India's clean energy initiatives.

• Industrial efficiency and decarbonisation: Promote energy efficiency and reduce carbon emissions.

• The programme is implemented in partnership with the Ministry of Power and New and Renewable Energy of India.

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NITI Aayog releases report Expanding Quality Higher Education through States and State Public Universities

This report is the first policy document of its kind in the higher education sector, focusing specifically on States and State Public Universities (SPUs).

Key aspects of State Public Universities (SPUs)

• SPUs and their affiliated institutions have more than 80% of the total enrollment of the students.

• Establishment: They are established by the Acts of the respective states. They are governed and funded by the state governments.

Criteria

Challenges highlighted

Quality

Poor research infrastructure and low spending on R&D, outdated curriculum and shortage of faculty.

Limited funding to meet capital expenditure and operational expenditure, lack of autonomy in fee fixation, etc.

Grants

Limited funding to meet capital expenditure and operational expenditure, lack of autonomy in fee setting, etc.

For example, expenditure on education by states as a percentage of GDP has declined between 2005-06 and 2019-20.

Employability

Outdated curriculum and lack of collaboration between educational and industry.

High cost of accreditation, lack of administrative autonomy, opaqueness in appointment of teachers, etc.

For example, only 38 SPUS have been able to make it to the top 100 institutions (university category) in NIRF 2024.

Internationalization

Selection criteria needs to be revised. Inadequately funded research limits global reach.

Key recommendations

Research: National research policy should be developed.

Teaching methodology: Curriculum should be updated regularly and teaching effectiveness should be assessed.

• • Increase investment in education to 6% of GDP; R&D spending to 2% of GDP.

Diversify revenue through self-financing programmes, alumni engagement, corporate social responsibility (CSR) and public-private partnership (PPP) models.

• • Promote internships, joint ventures, skills training and entrepreneurship.

Make accreditation costs affordable, grant autonomy to SPUS, and improve regulatory framework.

Identify and prioritise existing SPUS with appropriate infrastructure for international students.

• • Review existing model curricula to identify areas that require adjustments to align with international standards.

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