SRVAs and Internationalization of Rupee

Source: BL

Why in News?

The Reserve Bank of India (RBI) has allowed non-residents holding Special Rupee Vostro Accounts (SRVAs) to invest surplus balances in government securities, while also removing prior approval for banks to open SRVAs, these steps aimed at boosting rupee trade and internationalising the Indian Rupee.

What are Special Rupee Vostro Accounts (SRVAs)?

• About: SRVAs are accounts opened by foreign entities with Indian banks. They facilitate settlement of international trade transactions in Indian Rupees. 
  • SRVAs introduced in 2022, the mechanism allows exporters and importers to invoice and settle trade directly in rupees. 
• RBI Measures to Promote Rupee through SRVAs: Non-resident entities with SRVAs can now invest their rupee surplus balances in Central government securities (G-secs) and Treasury Bills. 
  • Earlier authorised dealer (AD) banks required RBI’s prior approval before opening SRVAs for overseas correspondent banks. Now AD banks can open SRVAs independently without seeking RBI permission. 
    • This aims to quicken the operationalisation of rupee-based trade settlements. 
• Significance: Promotes internationalisation of the Indian Rupee. Reduces dependence on hard currencies like the US dollar in bilateral trade. 
  • Encourages surplus rupee funds to be productively deployed in Indian government securities. 

What is Internationalization of Rupee? 

• About: Internationalization of the rupee refers to promoting its usage in cross-border trade, investments, and financial transactions without mandatory conversion to a dominant foreign currency like the USD. 
• Benefits: 
  • Reduces Vulnerability: Less reliance on foreign currencies like the dollar shields the economy from global crises and currency shortages. 
    • Settling trade in INR lowers hedging costs and protects businesses from currency volatility, boosting competitiveness. 
  • Eases Forex Reserve Pressure: Reduces the need to hold large USD/EUR reserves, freeing resources for other priorities. 
  • Enables Deficit Financing: Global acceptance of INR allows the government to raise funds abroad through rupee-denominated bonds. 
  • Strengthens Markets: More foreign demand for INR assets deepens Indian bond and equity markets, attracting long-term capital. 
• Negative Impacts: Increases exposure to global volatility and complicates monetary management. 
  • Large foreign participation could destabilize equity or debt markets if not regulated properly. 

What are the Challenges in the Internationalisation of Rupee? 

• Limited Global Acceptance: INR is not fully convertible on the capital account, which restricts its usage in global financial markets. 
  • The absence of INR in major platforms like CLS (Continuous Linked Settlement) limits settlement efficiency. 
• INR Liquidity Constraints Abroad: Lack of readily available INR liquidity in overseas financial systems hampers the ease of settlement in INR. 
• Regulatory and Documentation Complexities: Stringent KYC norms, inconsistent across RBI and SEBI, act as a deterrent for foreign portfolio investors (FPIs). 
• Insufficient Trade Invoicing in INR: A major portion of India’s external trade is still invoiced and settled in USD or other convertible currencies. 
• Lack of INR-based Payment Infrastructure Globally: Limited integration of UPI, Real Time Gross Settlement System (RTGS), and RuPay with foreign payment systems restricts cross-border transactions. 
• Geopolitical and Currency Dominance: The USD's dominance as the global reserve and trade currency poses a structural limitation. 
  • Countries may hesitate to adopt INR unless India becomes a major trading and financial hub.

What are RBI’s Recommendations for  Internationalisation of Rupee? 

• Boost Cross‑Border Settlement Mechanisms: Develop and standardize Local Currency Settlement (LCS) frameworks supported by sufficient INR liquidity, to reduce dependency on USD. 
• Strengthening Financial Market Infrastructure: Build a global 24×5 INR forex market, enabling interbank trades via overseas branches and extended CCIL platform hours. 
  • Facilitate G‑sec inclusion in indices like JPMorgan, to attract stable passive flows. 
• Simplify KYC and Onboarding: Harmonize KYC norms across RBI, SEBI, and global custodians. Accept  digital signatures, and scanned documents with Society for Worldwide Interbank Financial Telecommunication (SWIFT) confirmations to reduce processing delays. 
• Include INR in IMF’s SDR Basket: Position INR as a global reserve currency by aiming for inclusion in the International Monetary Fund (IMF) Special Drawing Rights basket.

Drishti Mains Question: Internationalisation of the rupee reduces dollar dependence but risks external shocks. How can India strike a balance between ambition and stability?

 

WTO and the Future of Multilateral Trade

Source:FE

Why in News?

The escalation of unilateral tariff measures by the US has renewed global discussions on the efficacy and future of the World Trade Organization (WTO), raising concerns over the diminishing role of the multilateral trading system in addressing trade disputes and ensuring fair competition. 

What Role does the WTO Play in Shaping Global Trade Dynamics?

• About: Established in 1995 under the Marrakesh Agreement (1994), following the Uruguay Round of negotiations (1986-94). It succeeded the GATT. 
  • Headquartered in Geneva, Switzerland.  
  • It covers trade in goods, services, and intellectual property (vs. GATT’s focus on goods). 
  • It has 166 members( representing 98% of world trade). India has been a WTO member since January 1995 and a member of GATT since July 1948. 
  • Key agreements of the WTO are TRIMS (Trade-Related Investment Measures),  TRIPS (Trade-Related Aspects of Intellectual Property Rights), and AoA (Agreement on Agriculture).  
• Role: 
  • Rule-Making & Negotiation Platform: Provides a multilateral forum to negotiate trade agreements (e.g., Trade Facilitation Agreement 2013) 
  • Trade Liberalization & Predictability: Calls for reducing tariffs/barriers, promotes Most-Favored-Nation principle, and builds a stable, rules-based global trading environment. 
  • Transparency & Monitoring: Ensures accountability through Trade Policy Reviews and mandatory notifications of subsidies, tariffs, and regulations. 
  • Capacity Building & Technical Assistance: Supports weaker economies in integrating into global trade (e.g., WTO Aid-for-Trade initiative, capacity programs for Least Developed Countries). 
  • Balancing Trade & Development Goals: Attempts to align trade with sustainable development, food security, and climate goals (e.g., fisheries subsidies linked to SDG 14). 
  • Preventing Protectionism & Promoting Cooperation: Acts as a global trade referee, especially during crises (e.g., during Covid-19, WTO monitored export restrictions on medical supplies).

What Factors are Limiting the WTO’s Effectiveness in Fostering Multilateral Trade? 

• Dispute Settlement Paralysis: The WTO’s Appellate Body has been non-functional since 2019, undermining credibility of the multilateral dispute settlement system and encouraging “appeals into the void.” 
  • The US has been blocking the appointment of new judges since 2017 on grounds of judicial activism. 
• Negotiation Deadlock: The Doha Development Round (2001), aimed at fairer trade for developing nations, collapsed over agriculture, subsidies, and market access, exposing deep North–South divide in multilateral trade negotiations. 
• Rise of Regional Trade: Proliferation of Free Trade Agreements (FTAs),  bilateral pacts, and regional blocs (EU, ASEAN) weakens the WTO’s multilateral vision by fragmenting global trade into smaller preferential arrangements. 
• Rise of Protectionism: Increasing use of General Agreement on Tariffs and Trade (GATT) Article XXI (security exception) to impose unilateral tariffs, as in the US–China trade war, erodes faith in multilateral trade rules. 
  • US–China tensions, Russia–Ukraine conflict, and mega regional trade deals (Regional Comprehensive Economic Partnership) further marginalise the WTO, threatening its role as the central pillar of multilateralism in trade. 
• Gaps in Addressing Evolving Trade Dimensions: WTO struggles to address new issues like digital trade, e-commerce, climate-linked trade barriers, and green technologies, making it less relevant in today’s multilateral trade governance. 
  • For example, a 1998 moratorium on customs duties on e-commerce, while continually extended, remains a temporary measure, with no permanent rules agreed upon. 
• Development Disparities and the Self-Designation Problem: The WTO’s Special and Differential Treatment (S&DT) allows developing nations trade flexibility, but the absence of a clear definition of “developing country” lets advanced economies like China self-designate and claim such benefits, causing disputes. 

What Reforms are Crucial for Strengthening the WTO’s Role in an Evolving Trade Landscape? 

• Revitalize Rule-Based Dispute Resolution: Revive the Appellate Body by addressing US concerns, setting strict timelines, and respecting domestic policy space. 
• Rebuilding Trust through Transparency: Enhance the Trade Policy Review Mechanism (TPRM) of WTO to analyze spillover effects of national policies. 
  • Encourage members to share data and undertake joint assessments to build a common understanding of impacts. 
• Partnership with Other Institutions: Strengthen cooperation with IMF, World Bank, UNCTAD, and climate bodies to integrate trade with finance, development, and sustainability goals. 
• Institutionalize Reform Mechanisms: Create a permanent WTO Reform Council with rotating leadership, ensuring reform momentum is sustained beyond individual ministerial meetings. 
• Towards Equitable Globalization: WTO must evolve into a guardian of equitable globalization with rules on digital trade, cross-border data, industrial policy, and green subsidies. 

What Role can India Play in Strengthening Multilateral Trade Governance? 

• Champion of the Global South: India can act as a voice for developing and least-developed countries in WTO negotiations, ensuring their concerns on food security, subsidies, and fair market access are addressed. 
• Balancing Between Protectionism and Liberalization: India can advocate for calibrated liberalization that respects developmental needs while resisting unilateral tariff hikes and protectionist tendencies of major economies. 
• Promoter of Sustainable and Inclusive Trade: India can call to link trade with SDGs by advocating climate-just frameworks, resisting green protectionism (like EU CBAM), and showcasing India’s Mission LiFE and renewable energy models. 
• Showcasing as a Model Economy: With its growing manufacturing capacity (PLI schemes), digital economy (UPI), and services sector strength, India can project itself as an example of balancing development with global integration. 

Conclusion 

Multilateral trade frameworks remain the cornerstone of global economic stability by fostering cooperation, predictability, and equitable growth among nations. In this context, the WTO remains irreplaceable as the strongest platform for rules-based global trade. With timely reforms and renewed cooperation, it can evolve to meet new-age trade realities and reassert itself as the anchor of multilateralism. 

Drishti Mains Question: Multilateralism in trade is increasingly being challenged in light of the declining role of the World Trade Organization. Suggest measures to revive multilateralism in global trade.

100 Years of the Kakori Train Action

Source: HT 

Why in News? 

The Kakori Train Action, which took place in August 1925 near Kakori village close to Lucknow, holds a significant place in India’s freedom struggle. 

What was the Kakori Train Action? 

• About: On 9^th August 1925, Indian revolutionaries carried out the Kakori train action on the Number 8 Down train from Shahjahanpur to Lucknow, aiming to seize British government funds to support the freedom struggle. 
• Background: After the Jallianwala Bagh Massacre (1919) and suspension of Non-Cooperation Movement (1922), young nationalists formed Hindustan Republican Association (HRA) (1924) to fund revolutionary activities by seizing British treasury money transported by train. 
• Personalities Involved: It was carried out by revolutionaries like Ram Prasad Bismil, Ashfaqullah Khan, Rajendra Lahiri, Keshav Chakraborty, Mukundi Lal, Banwari Lal, and Chandrashekhar Azad (member of HRA). 
• British Response: British crackdown after the Kakori robbery led to arrests of many, of whom 17 were jailed, four transported for life and four—Bismil, Ashfaqullah, Roshan Singh and Rajendra Lahiri were hanged. Kakori proved to be a setback. 
  • Chandrashekhar Azad was one of the few revolutionaries who managed to escape police charges.

Key Sports Related Bills Passed in Parliament

Source: TH

Parliament has passed 2 key legislations, the National Sports Governance Bill, 2025 and the National Anti-Doping (Amendment) Bill, 2025 aimed at reforming sports governance and strengthening anti-doping measures in India.

National Sports Governance Bill, 2025 

• Empowers the central government to establish the National Sports Board (NSB) and establishes National Olympic Committee, National Paralympic Committee, and Sports Federations for each designated sport. 
  • The NSB can recognise, suspend, or cancel sports bodies (incl. BCCI), conduct inquiries, frame Code of Ethics & Safe Sports Policy, regulate elections via National Sports Election Panel, and ensure international compliance. 
• Mandates national/regional sports federations (affiliated with international bodies) to have a General Body, 15-member Executive Committee (at least 2 outstanding sportspersons & 4 women), and Ethics, Dispute Resolution, Athletes Committees. 
• Creates National Sports Tribunal (3-member; chaired by sitting or former Judge of the SC or the Chief Justice of a HC) with civil court powers for speedy disputes; excludes doping, internal disputes, and international event matters, with appeals to the Supreme Court. 
• Recognised bodies are public authorities under RTI Act, 2005 only if they receive government grants or financial assistance. They must maintain CAG-audited accounts, and obtain approval to use “India”/national insignia. 
• The Centre can frame rules, relax eligibility, and restrict national teams’ participation abroad for reasons of security, public order, or safety.

National Anti-Doping (Amendment) Bill, 2025 

• Amends National Anti-Doping Act, 2022 to strengthen the anti-doping framework in India, prohibiting doping (use of performance-enhancing substances) and aligning with UNESCO Convention against Doping in Sports. 
• Empowers the National Anti-Doping Agency (NADA) to implement anti-doping rules, conduct testing, and enforce regulations. 
• Establishes the National Board for Anti-Doping in Sports to oversee NADA, advise the central government, and access information from Disciplinary and Appeal Panels. 
• Specifies a clear list of anti-doping rule violations, ensuring robust enforcement, adjudication, and compliance. 

Read More:  National Sports Policy 2025, World Anti-Doping Report 2022.

Major Announcements on India’s 79th Independence Day

Source: HT  

On India’s 79^th Independence Day, Prime Minister announced key initiatives to drive the nation toward developed status by 2047. 

Major Announcements 

• PM Viksit Bharat Rozgar Yojana: It aims to create 3.5 crore jobs in two years. Newly employed youth will receive Rs 15,000 as support, benefiting around 3 crore individuals. It marks a key step from Swatantra Bharat to Samriddha Bharat. 
• Mission Sudarshan Chakra: Aims to develop an indigenous Iron Dome-like air defence system by 2035 to protect strategic and civilian sites, with capabilities to intercept and retaliate against enemy attacks. 
• Semiconductor: India to roll out its first Made-in-India semiconductor chip by the end of 2025. 
• National Deep Water Exploration Mission: The planned mission termed as “Samudra Manthan’ aims to explore offshore oil, gas, and mineral resources in mission mode. 
• GST and Task Force Reforms: Goods and Services Tax (GST) reforms to be launched by October 2025, with reduced taxes on essentials and relief for MSMEs and consumers. 
  • A dedicated Reform Task Force will drive economic growth, cut red tape, and modernise governance for a USD 10 trillion economy by 2047. 
• High-Powered Demography Mission:  Aims to tackle demographic imbalance from illegal migration in border areas, ensuring national security, unity, and citizens' rights. 
• Nuclear Energy Expansion: India plans to increase nuclear power capacity tenfold by 2047, with 10 new reactors currently under development. 
• Clean Energy Target Achieved: India has met its goal of 50% electricity capacity from non-fossil sources, five years ahead of the 2030 deadline.

Read more: Red Fort: Venue for the India’s Independence Day Celebration

Pradhan Mantri Viksit Bharat Rozgar Yojana

Source: PIB 

On the 79^th Independence Day, the Prime Minister unveiled the Pradhan Mantri Viksit Bharat Rozgar Yojana. The scheme will help formalize the workforce by providing social security coverage to crores of young men and women. 

• Target: Creation of 3.5 crore jobs by 2027, and offering incentives to first-time employees (Part A) and employers (Part B). 
• Part A – First-Time Employees: Targets first-time employees registered with Employees' Provident Fund Organisation (EPFO) and provides an EPF wage support of up to Rs 15,000, released in two installments. 
  • The first installment is paid after completing 6 months of service, second after 12 months with financial literacy programme completion. 
  • Eligibility: Employees earning salaries up to Rs 1 lakh qualify for the incentive. 
  • Savings Component: To promote the habit of saving, a portion of the incentive will be deposited in a savings instrument or fixed account, which the employee can withdraw after a specified period. 
• Part B – Incentives for Employers: Employers creating new jobs (salaries up to Rs 1 lakh) receive up to Rs 3,000/month per employee for 2 years. Incentives apply only for new jobs sustained for at least six months. 
  • In manufacturing, incentives extend to the 3^rd and 4th years, with Part B expected to create around 2.6 crore new jobs. 
• Incentive Payment Mechanism: 
  • Employees: Direct Benefit Transfer (DBT) via Aadhar Bridge Payment System (ABPS). 
  • Employers: Payments into Permanent Account Number (PAN)-linked accounts. 

Read more: Aatmanirbhar Bharat Rozgar Yojana (ABRY)

Overseas Citizen of India Scheme

Source: BT

The Home Ministry has expanded rules for cancelling Overseas Citizen of India (OCI) cards, allowing revocation if a holder is convicted with imprisonment of 2 years or more, or is charge-sheeted for offences punishable with 7 years or more. 

• This change is introduced under clause (da) of Section 7D of the Citizenship Act, 1955.

Overseas Citizen of India Scheme

• About: The OCI scheme was launched in August 2005 by amending the Citizenship Act, 1955 to allow registration of Persons of Indian Origin (PIOs).  
  • An OCI card is given to foreign passport holders of Indian origin and serves as a multiple-entry, multi-purpose, lifelong visa for visiting India.  
    • However, OCI does not grant dual citizenship. 
  • Cardholders are also exempt from registering with the local police, irrespective of their stay duration. 
  • Currently, there are over 4.5 million OCI cardholders, with the largest populations in the US, UK, Australia and Canada. 
• Eligibility:  Citizens of India on/after 26 January 1950, or were eligible for citizenship on that date their descendants, and spouses (married for ≥2 years). 
  • Individuals who are or have been citizens of Pakistan or Bangladesh are specifically excluded from the Overseas Citizenship of India (OCI) scheme. 
• Restrictions:  
  • No political rights (cannot vote, contest elections, or hold constitutional posts such as President, Vice President, Judge, etc), unlike Non-Resident Indians.  
  • No right to public employment under Article 16 & not eligible for Indian government services, except as specially notified. 
  • Special permits are required for research, missionary/journalistic work, mountaineering, and visits to protected/restricted areas. 
• Revocation:  
  • Fraud or Misrepresentation: OCI cards obtained through false information, concealment, or fraud can be canceled. 
  • Disaffection to Constitution: Actions or statements against the Constitution of India may lead to cancellation. 
  • Wartime Assistance to Enemy: Involvement in aiding the enemy during any war involving India can revoke the card. 
  • Serious Criminal Offenses: 
    • Sentenced to ≥2 years imprisonment. 
    • Named in a chargesheet for offenses punishable with ≥7 years imprisonment. 
  • Actions Prejudicial to India’s Interests: Cancellation possible if deemed necessary for sovereignty, integrity, security, foreign relations, or public interest.

Overseas Citizen of India Cardholder V/s Non-Resident Indian

Aspect	Overseas Citizen of India Cardholder	Non-Resident Indian (NRI)
Legal Status	A person registered as Overseas Citizen of India (OCI) Cardholder under Section 7A of the Citizenship Act, 1955.	An Indian citizen who resides outside of India for a specified period (typically more than 182 days in a financial year).
Visa Requirement	The OCI card serves as a multiple-entry, lifelong visa.	Not required as they hold an Indian passport.
Political Rights	Does not have the right to vote in Indian elections.	Has the right to vote in Indian elections, but must be physically present in their constituency to cast the vote.
Scope of Allowed Activities	All activities except activities like research, missionary work, mountaineering, journalism, and visiting restricted areas, that need special permission from Indian authorities.	All activities

Read More: Overseas Citizenship of India Scheme