Current Affairs – December 31, 2025

{GS2 – IR} UAE–Saudi Rift in Yemen

Context (HT): The United Arab Emirates announced the withdrawal of its troops from Saudi Arabia following Saudi airstrikes on Mukalla port in Yemen.

Escalation among anti-Houthi actors complicates prospects for a unified political settlement.

What Happened in Mukalla?

Port Strike: Saudi Arabia bombed Mukalla port (Southern Yemen) after a shipment arrived from the UAE’s Fujairah, alleging it carried weapons for southern separatists.
Denial: UAE stated the shipment contained vehicles for its own forces, rejecting claims of arms supply.

Actors and Alignments in Southern Yemen

Southern Transitional Council (STC): UAE-backed group seeking southern Yemen’s sovereignty since 2017, recently expanding control in Hadramout and Mahra.
Yemeni Military Bloc: Opposes STC and is aligned with the Hadramout Tribal Alliance, which is supported and backed by Saudi Arabia.

Reasons Behind UAE Withdrawal

Operational Safety: The UAE cited concerns over the safety of its personnel amid rising airstrikes.
Counterterror Focus: Abu Dhabi reiterated that its Yemen presence is limited to counterterrorism.
Political Signalling: Withdrawal reinforces that Yemen’s governance must be decided internally.

About Yemen

Geographical Location: Yemen lies at the south-western tip of the Arabian Peninsula, bordering Saudi Arabia, Oman, the Red Sea and the Gulf of Aden.
Strategic Position: Controls access near the Bab-el-Mandeb Strait, a vital maritime chokepoint linking the Red Sea with the Indian Ocean.
Capital Status: Sana’a is the constitutional capital, but it remains under Houthi control.
Civil War: Conflict began in 2014 when rebels seized Sana’a, leading to Saudi-led intervention in 2015.
Major Ports: Aden, Hodeidah, Mukalla and Mocha, which are critical to the economy.
River System: Yemen has no perennial rivers; instead, it has seasonal riverbeds called wadis. Important wadis include Wadi Hadramawt and Wadi Zabid, which support agriculture and settlements.
Marib Dam: The Marib Dam, an ancient structure, is crucial for irrigation and water security.

{GS2 – IR} United States–Venezuela Tensions over Oil Sanctions and Maritime Interdictions

Context (TH): Relations between the United States and Venezuela have sharply escalated after the U.S. seized Venezuelan oil tankers and imposed a naval quarantine on oil shipments.

Why Trump Is Targeting Venezuela?

Strategic And Economic Factors

Energy Security: Venezuela holds the world’s largest proven oil reserves (~303 billion barrels), and control over these reserves can reduce U.S. reliance on West Asian energy.
Sanctions Fatigue: Despite years of sanctions, the Maduro regime has survived, prompting Washington to explore harder coercive tools like Maritime Chokehold to disrupt its primary revenue source.

Geopolitical Rivalry

Countering Rivals: Venezuela has deepened ties with China, Russia, Iran, and Cuba, including oil-backed loans, arms purchases, and security cooperation.
Cold War Revival: The Caribbean is being treated again as a sphere of strategic control for the U.S.

Regime Change Objective

Domestic Opposition Support: Sections of Venezuela’s opposition openly back stronger U.S. action, reinforcing Washington’s regime-change calculus.
Official Justification: The U.S. frames its actions as counter-narcotics operations and national security enforcement, providing political and legal justification for interventionist policies

About Venezuela

Location: Venezuela is situated on the northern coast of South America.
Borders: It borders the Caribbean Sea and the Atlantic Ocean to the north, Guyana to the east, Brazil to the south, and Colombia to the southwest and west.
Geographical Features: The Andes, the expansive grassland plains (Llanos), the Guiana Highlands, and the Caribbean coast. It hosts the world’s highest waterfall, Angel Falls.
Major Water Body: Orinoco River (drains into the Atlantic Ocean), Rio Negro (drains into the Amazon River), Lake Maracaibo (the largest lake in South America) and Lake Guri.

{GS3 – IE} Small-Value Digital Payment Surge

Context (TH): In the rising digital payments ecosystem in India, the share of small value payments is seen growing faster, according to a report by the Reserve Bank of India (RBI).

Key Highlights from the RBI Report

Trends in Digital Payments

Digital payments grew 17.9% in value and now form 97.6% of total costs, while cheques fell to 2.4%.
Digital payment volumes expanded by 35%, far outpacing value growth due to small-ticket transactions.
Average retail digital transaction value declined to ₹3,830 from ₹4,382, signalling daily-use adoption.
UPI accounts for the largest share of transaction volume, while RTGS dominates high-value payments.
Debit card usage declined, while credit card transactions continued to rise in recent periods.

ATM Usage and Infrastructure Trends

Digital payments reduced cash withdrawals; E.g., total ATMs declined moderately in 2024–25.
Reduction driven mainly by a fall in off-site ATMs, despite growth in on-site ATMs.
Public sector banks hold the largest share of ATMs with a more even population-wise distribution.

Types of ATMs

On-Site ATMs: Located within bank branches, mainly in urban and semi-urban centres.
Off-Site ATMs: Standalone machines outside branches.
White-Label ATMs: Owned by non-bank entities, with nearly 80% located in rural & semi-urban areas.
Brown-Label ATMs: Infrastructure owned by service providers but operations managed by banks.

Risks Posed by AI Adoption in the Financial Sector

Model Explainability: Black-box AI models risk flawed credit decisions at scale.
Data Drift: Changing borrower behaviour can reduce model accuracy over time.
Ethical Risks: Data privacy breaches and algorithmic bias pose systemic concerns.

Microfinance Stress Signals

Credit Contraction: Microfinance lending contracted across most lender categories by end-March 2025.
Portfolio Stress: Rising stress observed across regulated entities, excluding NBFC-MFIs.

Reasons for the Rise in Small-Value Digital Payments

UPI Convenience: UPI handles a major share of digital payment transactions, with UPI processing ~85% of all digital volumes in 2025, reflecting strong user preference for instant digital micro-payments.
Merchant Acceptance: UPI’s ubiquity extends to point-of-sale and QR payments, with digital payments comprising 99.8% of total payment transactions by volume, indicating wide merchant adoption.
Smartphone Access: In India, ~ 85 % of households possessed at least one smartphone. Approximately 86.3% of households in India have internet access. (Telecom Survey, 2025).

{GS3 – Envi} India’s Clean Energy Achievements in 2025 **

Context (DDN | IE): India achieved significant gains in clean energy capacity in 2025 but requires structural reforms to secure Aatmanirbharta and long-term energy security.

Overview of the Clean Energy Capacity in India

Global Rank: India ranks fourth in total installed renewable capacity, at 253.96 GW, with over 23% year-on-year growth.
Capacity Expansion: In 2025, India added a record 44.51 GW by November, nearly double the 25 GW added in 2024.
Non-Fossil Sources: Non-fossil sources accounted for 51.5% of installed power capacity, achieving the COP26 target five years early.
Solar Growth: Solar capacity increased by 34.98 GW to 132.85 GW by November 2025, reflecting a year-on-year growth of 41%.
Wind Growth: Wind capacity increased by 5.82 GW to 53.99 GW by November 2025, recording a 12.5% year-on-year growth.
FDI Inflows: Clean energy attracted $3.4 billion in FDI during the first nine months of FY 2025, accounting for over 80% of power-sector inflows.

India’s Advantage for Clean Energy

Solar Abundance: With around 300 sunny days annually and high solar insolation, India has a theoretical solar potential exceeding 750 GW.
Cost Efficiency: Competitive auctions have driven solar and wind tariffs to record lows, making renewables in India among the cheapest globally.
Hydrogen Market: Replacing the 5 million tonnes of grey hydrogen already consumed would create an instant domestic market for green hydrogen.
Strategic Geography: A 7,500 km coastline has immense offshore wind potential, and Rajasthan and Gujarat’s plains are ideal for solar-wind hybrid projects.
China Alternative: With vertical integration, India can emerge as a China-plus-one manufacturing hub for renewables.

India’s Challenges with Clean Energy

DISCOM Stress: Delayed payments from financially weak state DISCOMs cause liquidity constraints for renewable developers.
PPA Renegotiation: Attempts by some state governments to renegotiate Power Purchase Agreements (PPAs) after the auction undermine the sanctity of contracts and investor confidence.
Grid Bottlenecks: Nearly 60 GW of renewable projects remain stranded due to inadequate transmission infrastructure.
High Capital Cost: The cost of renewable financing in India is about 80% higher than in developed countries, mainly due to perceived risks.
Hydrogen Cost: Green hydrogen currently costs $4-5 per kg, far higher than grey hydrogen based on fossil fuels.

Way Forward

Vertical Integration: Expand domestic production of polysilicon and wafers to reduce dependence on Chinese upstream components.
Contract Sanctity: Introduce a legal framework to prevent unilateral renegotiation of Power Purchase Agreements by states.
Grid Expansion: Build transmission infrastructure ahead of generation capacity to prevent stranded renewable assets.
Payment Security: Strengthen payment security mechanisms to protect developers against DISCOM defaults and high financing costs.
Energy Storage: Accelerate deployment of battery energy storage and pumped hydro to manage renewable intermittency.

Read More> Steps Taken by MoNRE

{GS3 – S&T} White Paper on Democratising AI Infrastructure **

Context (TH): The Office of the Principal Scientific Adviser (PSA) released a white paper titled “Democratising Access to AI Infrastructure” to guide inclusive AI growth.

It highlights the need for affordable access to foundational AI resources to prevent the concentration of power among a few global firms and urban centres.

Key Highlights of the White Paper

Access Equity: Treating AI infrastructure as a Digital Public Good (DPG) to lower entry barriers for startups, researchers, and universities.
- The IndiaAI Mission has established a national GPU pool accessible through the IndiaAI Compute Portal, offering over 38,000 GPUs at subsidised rates.
Capacity Building: Expanding AI data centres to bridge the existing capacity gap; India generates nearly 20% of global data but hosts only about 3% of data-centre capacity.
Inclusive Innovation: Integrating AI with Digital Public Infrastructure (DPI), such as Aadhaar and UPI.
- Platforms such as IndiaAIKosh can act as shared repositories for datasets and tools, aiding the development of inclusive AI solutions like Bhashini.
Energy Sustainability: Integrating new data centres with green energy grids, as expanding data centres could consume nearly 3% of India’s electricity by 2030.
Urban De-concentration: Reducing concentration in metro cities by incentivising AI data centres through Public–Private Partnerships (PPP) in Tier-2 and Tier-3 cities.

{GS3 – S&T} Defence Procurement Contracts *

Context (TH): The Ministry of Defence signed ₹4,666 crore worth of contracts to procure CQB Carbines for the Army and Navy and Heavyweight Torpedoes for the Navy, boosting force modernisation.

About CQB Carbines

Weapon Type: Close Quarter Battle Carbines designed for short-range, high-intensity combat in urban and confined environments.
Quantity Procured: Over 4.25 lakh carbines to replace legacy small arms across Army and Navy units.
Manufacturers: Indigenously produced by Bharat Forge Ltd and PLR Systems Pvt Ltd.
Compact Design: Short barrel and lightweight build improve manoeuvrability in urban warfare.
High Firepower: High rate of fire increases effectiveness in close-contact engagements.

About Heavyweight Torpedoes

Weapon Category: Heavyweight torpedoes designed for submarine-based underwater warfare.
Platform Integration: To be integrated with Kalvari Class (Project-75) submarines of the Indian Navy.
Supplier: Procured from WASS Submarine Systems S.R.L., Italy, along with associated equipment.
Combat Capability: Advanced guidance and propulsion systems enhance submarine strike effectiveness.

Project-75 (Kalvari Class Submarines)

Programme Aim: Indian Navy programme to induct six diesel-electric attack submarines.
Design Origin: Scorpène-class design developed by the French firm Naval Group.
Construction Partner: Built at Mazagon Dock Shipbuilders Limited (MDL), Mumbai.
Follow-On Plan: Project-75 is complemented by Project-75I, which aims to induct submarines with Air Independent Propulsion (AIP) systems.

{Prelims – A&C} Piprahwa Relics *

Context (PIB): The Union Ministry of Culture is organising the “Lotus Light: Relics of the Awakened One” cultural exposition showcasing the Piprahwa Relics in New Delhi.

About Piprahwa Relics

The Piprahwa Relics were discovered in 1898 at Piprahwa Stupa (Uttar Pradesh) by British engineer William C. Peppe; the site is widely identified with ancient Kapilavastu, Buddha’s homeland.
The relics include bone fragments, crystal and steatite caskets, gold ornaments and gemstones; a Brahmi inscription attributes them to Buddha’s Sakya clan, dating them to the 3^rd century BCE.
Under the Indian Treasure Trove Act, 1878, the British Crown claimed the relics; Buddha’s bone relics were gifted to King Rama V of Siam, while most gems went to the Indian Museum, Kolkata.
Archaeological Survey of India (ASI) excavations (1971-77) uncovered an additional 22 bone relics in steatite caskets, now preserved at the National Museum, New Delhi.
In 2025, relics held by the Peppé family surfaced at a Hong Kong auction and were repatriated to India.

{Prelims – Eco} Gig Worker Protest Against Ultra-Fast Delivery Models

Context (TOI): Gig worker unions have organised a nationwide strike demanding the removal of ultra-fast delivery models and the restoration of the earlier payout structure.

Key Challenges Faced by Gig Delivery Workers

Market Pressure: Ultra-fast delivery drives a $3.34-billion quick-commerce market while transferring operational risks onto workers.
Road Safety: Two-wheelers account for nearly 45% of India’s road fatalities, worsened by time-compressed delivery targets.
Income Erosion: Average per-order payouts in quick commerce declined by up to 40% between 2024 and 2025.
Mental Health: Platform pressure and income uncertainty caused anxiety and related stress in 98.5% of surveyed workers.

About Gig Economy

It is a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs.
A gig worker is a person who performs work or participates in a work arrangement and earns income from such activities outside of traditional employer-employee relationships.
About 12 million workers in India were engaged in the gig economy in 2024–25.
Skill Composition: About 47% of gig workers are medium-skilled, while low- and high-skilled occupations are rising.

Read More > Gig Economy

{Prelims – Eco} India Has Become the Fourth-Largest Economy *

Context (TH): India has become the world’s 4^th largest economy, surpassing Japan in nominal GDP.

GDP Size: India’s nominal GDP is $4.18 trillion, placing it behind the U.S, China, and Germany.
Growth: It remains the fastest-growing major economy, with 8.2% real GDP growth in Q2 of FY2025.
Growth Drivers: Economic growth is fuelled by robust domestic demand, steady private consumption, and a services-led growth model.
Future Rank: India is projected to overtake Germany by 2027, with its GDP potentially reaching $7.3 trillion by 2030.
Long Vision: Under the ‘Viksit Bharat 2047’, India aims to reach high-income (developed) status by 2047, requiring a GNI per capita of over $14,005.

Current Macroeconomic Overview of India

GDP (PPP): India ranked 3^rd on a Purchasing Power Parity basis, with a GDP of $17.71 trillion.
GDP Per Capita: India’s per capita nominal GDP of $2,820 places it 136th worldwide.
Sector Mix: The service sector contributed 55% to GDP, with industry at 27.6% & agriculture at 17.7%.
Labour: The unemployment rate fell to 4.7% in November 2025, the lowest in the current series.
Forex Reserves: Reserve stood at $688 billion in September 2025, ranking 4^th highest globally.
Debt Position: India recorded external debt of $747 billion in June 2025, with an external debt-to-GDP ratio of 18.9%.

{Prelims – Infra} Railways Completes Electrification in the Western Ghats

Context (IE): Indian Railways completed the electrification of the challenging 55-km stretch in the Western Ghats.
This completes the electrification of the Bengaluru–Mangaluru rail route, connecting inland regions to the New Mangalore Port.
India has completed electrification of about 99% of its broad-gauge railway network.
Global Comparison: Switzerland is the only major country with 100% railway electrification; India remains ahead of China, Japan and Russia in electrifying its railway networks.

The Western Ghats is a 1,600-km-long continuous mountain chain along India’s western coast; it is a UNESCO World Heritage Site (WHS) and one of 36 global biodiversity hotspots.

Read More > India’s Railway Sector | Western Ghats

{Prelims – Species} Madhya Pradesh Recorded Its Highest Tiger Death in 2025

Context (IE): In 2025, Madhya Pradesh reported 55 tiger deaths, the highest annual toll since Project Tiger began in 1973.

National Share: It accounted for over 30% of India’s total tiger fatalities, the highest among all states.
Death Causes: Out of 55 deaths, about 11 were unnatural, while the remainder resulted from natural causes, including old age or territorial disputes.
- 8 tiger deaths were linked to illegal electric fencing installed by villagers to protect crops.

Tiger Mortality in India

National Toll: India recorded 162 tiger deaths in 2025, a 30% increase over the previous year.
Top States: Madhya Pradesh reported the most deaths, followed by Maharashtra and Uttarakhand.
Factors: 70% of tiger deaths were due to natural causes, while 30% were due to unnatural causes.
Spatial Spread: Around 42% of tiger deaths occurred outside the boundaries of notified Tiger Reserves
Electrocution: Electrocution accounted for 10% of total tiger mortality, making it a significant threat.
Investigation Rule: Under NTCA rules, every tiger death is presumed poaching until necropsy and forensic reports confirm natural causes.

{Prelims – Health} Nimesulide Ban *

Context (IT | CN): India has banned oral immediate-release nimesulide formulations above 100 mg to protect public health, citing serious safety risks.

Nimesulide is a non-steroidal anti-inflammatory drug (NSAID) used for pain and fever in adults. It has been widely sold under multiple brand names and fixed-dose combinations in India for decades.

Reasons Behind the Ban

Hepatic Risk: High-dose nimesulide is linked to liver toxicity, which can lead to acute liver failure.
Fatal Potential: Severe cases of hepatotoxicity have led to hospitalisation and deaths.
Safer Alternatives: Other NSAIDs with better safety profiles are available for similar indications.
Ecological Risk: Nimesulide was identified as a major continuing threat to vulture populations.

Regulatory And Legal Basis for the Ban

Statutory Power: Ban issued under Section 26A of the Drugs & Cosmetics Act, 1940, in public interest.
Expert Review: Recommendation came from the Drugs Technical Advisory Board & expert committees.
Scope of Ban: Applies only to oral immediate-release doses above 100 mg, not a total prohibition.

{Prelims – S&T} India’s First 3D Flex Aqueous Angiography for Glaucoma

Context (PIB): An Army Hospital in New Delhi has successfully performed India’s first 3D flex aqueous angiography with iStent, marking a major advancement in glaucoma treatment.

Key Details

3D flex aqueous angiography allows doctors to see the eye’s fluid drainage channels in real time, helping identify exactly where fluid outflow is blocked in glaucoma patients.
The technique was performed using a 3D operating microscope and Spectralis imaging system, enabling high-precision live imaging during the eye surgery.
It was combined with iStent, a tiny implant used in Minimally Invasive Glaucoma Surgery (MIGS), which helps improve fluid drainage and lower eye pressure safely.

About Glaucoma

It is a group of eye disorders involving progressive optic nerve damage, associated with persistently raised intra-ocular pressure (IOP) and irreversible vision loss.
It is caused by ageing, genetic predisposition, diabetes, prolonged steroid use and eye injury; symptoms appear late via gradual peripheral vision loss.
Treatment focuses on lowering IOP through eye drops, laser procedures, or surgery, with newer methods like MIGS improving safety and outcomes.
In India, glaucoma affects ~12 million people and causes ~12% of total blindness, with a high burden due to late diagnosis, low awareness, and limited routine screening.

Read More > Trachoma

{Prelims – In News} UN Chief Issues New Year Message in Hindi

Context (DD): The United Nations (UN) Secretary-General Antonio Guterres released a New Year’s message in Hindi, a first in the history of the UN.

He warned about misplaced global priorities in his message, urging world leaders to prioritise development spending over military expenditure.
Global military spending has risen to $2.7 trillion (10% more than last year), about 13 times the total global development aid and roughly equal to Africa’s GDP.

Read More > India’s Recent Role in the UN