Current Affairs – April 28, 2026

{GS2 – Governance} Need for a Rules-Based Fuel Pricing Mechanism in India

• Context (IE): India’s hybrid fuel-pricing system faces pressure from rising crude prices, rupee weakness, and Middle East tensions, needing a clear, rules-based framework.

Evolution of India’s Petrol Pricing System

• Administered Pricing Mechanism: The government set prices under the APM (1975–2002) based on costs, guaranteed returns, subsidies, and an “Oil Pool Account”.
• Partial Liberalisation: APM was dismantled in 2002, and Trade Parity Pricing (TPP) started in 2006 to set the base price paid by oil companies to refineries.
• Deregulation Phase: India deregulated petrol prices in 2010 and diesel prices in 2014, moving towards a market-linked pricing model.
• Dynamic pricing: A system of daily price revisions began in 2017 to reflect global crude changes and currency exchange rate movements.

Key Issues in India’s Dynamic Pricing System

• OMC Burden: Public-sector Oil Marketing Companies (OMCs) freeze prices during periods of volatility or elections, resulting in large under-recoveries.
• Price Opacity: Consumers cannot clearly track crude cost, taxes, margins, and exchange-rate effects in pump prices.
• Fiscal Uncertainty: Sudden tax changes and delayed price revisions distort market signals and public finance planning.
• Uneven Gains: Falling crude prices often lead to higher taxes and corporate margins, while consumers receive limited price relief.

Need for a Rules-Based Framework

• Import Risk: India imports 85–90% of its crude oil, leaving fuel prices highly vulnerable to global shocks.
• Fiscal Burden: Every $10 global crude price rise widens India’s Current Account Deficit (CAD) by about 0.5% of GDP.
• Inflation Push: A 10% global oil price hike adds about 0.7–1% to India’s baseline wholesale inflation.
• Tax Dependence: Central and state taxes account for 50–60% of retail fuel prices, making pump-price cuts fiscally difficult.

Roadmap for Pricing Reforms

• New Framework: Adopt a Fuel Price Transparency Framework (FPTF) linking pump prices to crude costs and exchange rates, and use dynamic tax bands during crude price spikes.
• Public Disclosure: Disclose crude costs, taxes, margins, and currency impact to maintain public trust.
• GST Integration: Subsume petroleum products under GST to reduce cascading taxes, with the GST Council protecting state revenues.
• Supply Security: Secure long-term diversified crude contracts, boost domestic exploration, and expand EV and ethanol infrastructure to reduce fossil-fuel imports.

{GS2 – IR} India-New Zealand Signed Free Trade Agreement (FTA) **

• Context (IE): India and New Zealand formally signed a “once-in-a-generation” Free Trade Agreement (FTA) to double bilateral trade to $5 billion within five years.

About the India-New Zealand Free Trade Agreement

• Duty Elimination: New Zealand will eliminate customs duties on 100% of Indian exports immediately upon the agreement’s entry into force.
• India’s Offer: India has offered duty-free or reduced-tariff access on over 70% of tariff lines, covering ~95% of New Zealand’s export value.
• Rules of Origin: Products must undergo “substantial transformation” (typically 35% to 40% value addition) in the exporting country to qualify for FTA benefits.
• Agricultural Exclusions: Dairy products and sensitive agricultural goods like pulses, onions, and sugar are fully excluded to protect domestic farmers.
• Tariff Concessions: India halved the premium-apple duty to 25% and zeroed the kiwifruit duty under ascending quotas of up to 45,000 (apple) and 15,000 MT (kiwi) over six years.
  • Access Window: Preferential access for apples and kiwifruit is restricted to the off-season to protect Indian growers during peak harvest.
• Investment Pledge: New Zealand has committed to invest $20 billion in Foreign Direct Investment (FDI) in India over the next 15 years.
• Work Visa: A dedicated visa pathway will allow up to 5,000 Indian professionals to work in New Zealand for up to 3 years.
• Student Rights: Numerical caps on Indian student visas in New Zealand are removed under the FTA.
• AYUSH Recognition: New Zealand has officially recognised AYUSH systems for easier trade in traditional medicine and wellness services.
• Agriculture Cooperation: An Agricultural Productivity Partnership will be established to enhance Indian yields in apples, kiwifruit, and honey using New Zealand technology.

Overview of India-New Zealand Bilateral Relations

• Trade Volume: Bilateral trade reached $2.4 billion in 2024, with India maintaining a trade surplus.
  • Export Basket: Pharmaceuticals, machinery, textiles, motor vehicles
  • Import Basket: Wool, scrap iron, wood products, edible fruits
• Defence Framework: A Defence Cooperation MoU was signed in 2025 to institutionalise military training, joint exercises, and defence dialogues.
• Indian Diaspora: 300,000 people of Indian origin constitute 5% of New Zealand’s total population.
• Strategic Convergence: New Zealand joined the Indo-Pacific Oceans Initiative (IPOI) in 2025 and supports India’s permanent membership in the UN Security Council.
• Key Divergence: Pro-Khalistan activities, China-centric trade exposure, Russia-Ukraine divergence, and rising anti-India sentiment.

Read More> India-New Zealand Relations: Convergences & Challenges

{GS2 – IR} China–Pakistan Space Nexus and India’s Security Concerns

• Context (TH): The deepening space partnership between China and Pakistan has evolved into a “Space Silk Road,” posing significant security challenges for India

About Pakistan-China Space Cooperation

• EO Satellite: China launched Pakistan’s indigenous Earth observation satellite, PRSC-EO3, from the Taiyuan Satellite Launch Centre.
• Human Spaceflight: Two Pakistani astronauts began training in Beijing for a scheduled mission to the Tian-gong Space Station.
• Lunar CubeSat: China’s Chang’e-6 mission carried Pakistan’s first lunar CubeSat, ICUBE-Q, to the far side of the Moon in 2024.
• BDS Adoption: Pakistan was the first foreign country to adopt China’s BeiDou Navigation Satellite System (BDS) as a GPS alternative.
• Communication Satellite: China launched PakSat-MM1 under the Digital Pakistan initiative to provide broadband and 5G coverage to remote regions.
• Indigenous Manufacturing: The joint Pakistan Space Centre project aims to shift the country from buying satellites to building them domestically by 2040.

Implication of China-Pakistan Space Cooperation for India

• Surveillance Parity: High-resolution satellites like PRSC-EO3 provide Pakistan with near-real-time monitoring of Indian military movements, eroding India’s traditional reconnaissance advantage.
• Precision Strikes: Full access to the military-grade BeiDou signal allows Pakistani missiles and drones to achieve high-precision targeting.
• Two-Front Threat: Integration of Chinese and Pakistani space assets forces India to prepare for a coordinated, multi-domain space threat on both borders.
• Regional Leadership: China’s space-backed diplomacy challenges ISRO’s regional leadership by drawing South Asian neighbours into a Beijing-led technological ecosystem.
• Orbital Awareness: Advanced radar systems like the SLC-18 allow Pakistan to track Indian satellites and predict overpass windows to hide ground-level activities.

{GS3 – IE} RBI Introduces Expected Credit Loss Framework for Credit Risk Management *

• Context (TH): RBI amended the Income Recognition, Asset Classification, and Provisioning (IRACP) framework, shifting the banking sector toward a forward-looking risk-management model.

Key Changes Introduced

• ECL Framework: RBI replaced the legacy Incurred Loss (IL) model with a risk-based, three-stage Expected Credit Loss (ECL) framework.
  1. Low-Risk: For loans with no significant increase in credit risk, banks must make provisions for potential defaults over the next 12 months.
  2. Elevated-Risk: For assets where credit risk has risen significantly, banks are to provision for losses over the loan’s entire lifetime.
  3. Impaired Assets: For loans 90 days overdue or otherwise credit-impaired, banks must maintain full lifetime loss provisions.
• EIR Method: Loss allowances must be calculated using the Effective Interest Rate (EIR) method, which factors in all fees and transaction costs.
• Borrower Tagging: If a borrower defaults on one loan, all other credit facilities of that borrower in the same bank are automatically classified as NPAs.
• NPA Automation: All banks must implement automated batch-processing systems for NPA identification to ensure transparency.
• Foreclosure Ban: Banks are prohibited from charging prepayment or foreclosure penalties on floating-rate loans to individuals and micro-enterprises.
• Agent Certification: All recovery personnel must be certified by the Indian Institute of Banking and Finance (IIBF) to ensure ethical conduct.

India’s Current NPA Landscape

• Gross NPA: India’s GNPA ratio for Scheduled Commercial Banks dropped to a multi-decade low of 2.1% as of late 2025.
• Net NPA: Actual losses after provisioning have declined to approximately 0.5%.
• Slippage Ratio: The fresh slippage ratio declined to 1.4%, indicating higher quality in new lending.
• Agri NPA: Agricultural loans continue to show higher relative stress, with an NPA ratio of 5.7%.
• Retail NPA: Retail loans remain the most resilient sector, with an NPA ratio of roughly 1%.
• RBI Projection: Gross NPA GNPA ratio is projected to improve further to 1.9% by March 2027.

Read More> RBI’s Prompt Corrective Action (PCA) Framework

{GS3 – Envi} Grassroots Biodiversity Project Launched in Meghalaya and Tamil Nadu **

• Context (TP): MoEFCC, in collaboration with the National Biodiversity Authority (NBA), launched the ‘Strengthening Institutional Capacities for Securing Biodiversity Conservation Commitments’ scheme.

• It is a joint initiative of the Government of India, the Global Environment Facility (GEF), and the United Nations Development Programme (UNDP) designed to decentralise biodiversity governance.
• Objective: The project aims to “green” Gram Panchayat Development Plans (GPDPs) by integrating community-owned and locally funded biodiversity conservation strategies.
• Finance: It is supported by a $4.88 million grant from GEF for a five-year implementation period (2025-2030)
• Nodal Agency: National Biodiversity Authority (NBA) serves as the nodal agency, with technical and implementation support provided by UNDP India.
• Mechanism: It utilises a landscape-based approach to strengthen Panchayati Raj Institutions (PRIs) and Biodiversity Management Committees (BMCs) at the grassroots level.
• Innovative Financing: The initiative promotes Access and Benefit Sharing (ABS), CSR co-financing, and green micro-enterprises to create sustainable conservation funding.
• Mainstreaming Biodiversity: The project aligns local actions with the Updated National Biodiversity Strategy and Action Plan (NBSAP) 2024-2030 and the global 30×30 target.
• Landscape Approach: It will be implemented across two pilot ecological zones: the Sathyamangalam landscape (Tamil Nadu) and the Garo Hills landscape (Meghalaya).

{GS3 – S&T} India’s Space Ecosystem Expands as Private Investment Crosses $600 Million **

• Context (DDN): India is establishing space laboratories at universities, amid rising private participation in India’s space ecosystem.

Landscape of Private Participation in India’s Space Economy

• Investment: Private investment in India’s space sector crossed $600 million over five years.
• Startup Surge: Active space startups rose from single digits in 2019 to over 400 by early 2026.
• Value Chain: Private enterprises now operate beyond components, covering launch vehicles, satellite constellations, payloads, and ground infrastructure.
• Private Rocket: India launched Vikram-S, first fully private rocket, under Mission Prarambh in 2022.

Need for Private Participation in India’s Space Economy

• Global Edge: Private agility supports faster innovation, cost-effective scaling, and competition with global aerospace firms like SpaceX.
• Capacity Addition: Private participation expands infrastructure through Earth Observation (EO) satellites, shared satellite buses, and public-private partnerships.
• Service Reach: Private firms can expand satellite broadband, remote sensing, and navigation services in underserved and remote regions.
• Capital Mobilisation: India’s $44 billion by 2033 space economy target needs venture capital, global investment, and private risk-taking capacity.

Key Initiatives and Push for Private Space Participation

• Indian Space Policy 2023: Enables private participation through a predictable regulatory framework for non-governmental entities across the value chain.
• Institutional Support: Indian National Space Promotion and Authorisation Centre (IN-SPACe) authorises private space activities, while NewSpace India Limited (NSIL) promotes commercialisation.
• FDI Liberalisation: Revised Foreign Direct Investment rules allow 74% automatic route in satellites and 49% in launch systems.
• Startup Support: A ₹1,000 crore venture capital fund by SIDBI, Technology Adoption Fund, and SpaceTech Innovation Network (SpIN) supports space startups.
• Procurement Shift: Public-private partnerships (PPPs) are moving toward procurement through privately led EO satellite constellations.

Read More > India’s Space Economy

{Prelims – Eco} MoSPI Proposes Index to Track Service Sector Output *

• Context (IE | PIB): Ministry of Statistics and Programme Implementation (MoSPI) proposed an Index of Service Production (ISP) to track formal service-sector output.

• ISP aims to provide a reliable monthly service volume indicator to complement the Index of Industrial Production (IIP) and bridge data gaps.
• Data Sources: It will use monthly aggregated data from the Goods and Services Tax Network (GSTN), administrative records, and the ASISSE.
• Base Year: It proposes 2024-25 as the base year to reflect current economic and consumption patterns.
• Sector Mapping: The index will classify service activities under the National Industrial Classification (NIC) 2008 framework for global comparability.
• Price Correction: Nominal data will be deflated using indicators like Wholesale Price Index (WPI) and Consumer Price Index (CPI) to measure real volume growth.
• Significance: Services contribute over half of India’s GDP, making output tracking useful for policymaking, national accounting, and monetary policy.
• Key Limitations: It excludes the informal sector and temporarily omits health and education, missing nearly one-third of services Gross Value Added (GVA).

{Prelims – S&T} India’s First Private Orbital Launch Vehicle Vikram-1 *

• Context (IE): Vikram-1 payload cover has been sent to Satish Dhawan Space Centre, Sriharikota, for India’s first private orbital launch later this year.

• Vikram-1, developed by Skyroot Aerospace, is India’s first privately developed orbital launch vehicle.
• It is a multi-stage small-lift launch vehicle designed for cost-effective, rapid, on-demand commercial satellite deployment.
• It uses lightweight all-carbon composite structures to reduce mass and improve launch efficiency.
• The rocket uses 3D-printed engines and indigenous ultra-low-shock pneumatic separation systems.
• Propulsion: It has four stages, comprising three solid-fuel Kalam engines and a liquid-hypergolic Raman upper stage.
• Payload: Vikram-1 can place up to 480 kg into Low Earth Orbit (LEO) and up to 290 kg into Sun-Synchronous Orbit (SSO).

{Prelims – S&T} Astronomers Mapped Hidden Vela Supercluster *

• Context (TOI): Astronomers created the first 3D map of the Vela Supercluster (VSCL), which remains heavily obscured by the Milky Way’s dense interstellar dust.

• Scientists used the MeerKAT telescope to observe the VSCL through the Zone of Avoidance, a dense blind spot created by our galaxy.

About Vela Supercluster (VSCL)

• VSCL is one of the most massive galactic structures, located nearly 800 million light-years away.
• It is nicknamed ‘Vela-Banzi’, meaning “revealing widely” in isiXhosa, one of South Africa’s languages.
• It spans nearly 300 million light-years with at least 20 galaxy clusters, each holding hundreds to thousands of galaxies.
• It has an estimated mass of 30 quadrillion suns and is more massive than Laniākea, the supercluster containing the Milky Way.
• Structure: Recent studies reveal two dense cores within the supercluster, moving towards each other.
• Significance: Its gravitational pull explains the movement of the Milky Way and nearby galaxies.

{Prelims – In News} B’nei Menashe Tribal Community

• Context (IE): Israel relocated the first major group of B’nei Menashe from India to Tel Aviv as part of its ‘Operation Wings of Dawn’.

• B’nei Menashe, meaning “Children of Manasseh,” are an ethno-religious community living in the Indian states of Manipur and Mizoram.
• Lineage: They claim descent from one of the ‘Ten Lost Tribes’ of Israel.

• Ethnicity: The community mainly comprises people from the Chin, Kuki, and Mizo ethnic groups.

• Religious Belief: Originally practitioners of an ancestral tribal religion, many converted to Christianity and later adopted Judaism in the 20^th century.
• Official Recognition: Israel formally recognised them as “descendants of Israel” in 2005, allowing migration under the nation’s Law of Return.
• Relocation Program: ‘Operation Wings of Dawn’ aims to relocate the remaining 6,000–7,000 B’nei Menashe members from Northeast India to Israel by 2030.