Current Affairs – January 21, 2026

{GS2 – Polity} ECI Convenes Global Meet IICDEM 2026 **

• Context (DD): The Election Commission of India (ECI) is hosting the inaugural India International Conference on Democracy and Election Management (IICDEM) 2026 in New Delhi.

About IICDEM 2026

• Event Profile: 3-day global conference on democracy and election management, focused on sharing best practices among Election Management Bodies (EMBs) at Bharat Mandapam, New Delhi.
• Organised By: India International Institute of Democracy and Election Management (IIIDEM) under the aegis of Election Commission of India (ECI).

Key Focus Areas

• Voter Roll Integrity: Showcasing Special Intensive Revision (SIR) of electoral rolls as a credible reform.
• Election Technology: Discussions around technology interventions, including modern practices.

Election Commission of India (ECI)

• Article 324: ECI has superintendence, direction and control of electoral rolls and elections to Parliament, State legislatures, President and Vice-President.
• Part XV: Elections are covered under Part XV of the Constitution (Articles 324–329).
• Composition: The ECI is a multi-member body composed of a Chief Election Commissioner and two other Election Commissioners, appointed by the President of India for six-year terms or until age 65.
• CEC Removal: CEC can be removed like a Supreme Court judge, protecting autonomy.
• EC Removal: Election Commissioners can be removed only on the recommendation of the CEC.

{GS2 – IR} India and the EU are Set to Sign a Trade Agreement

• Context (TH): European Commission President Ursula von der Leyen said the European Union and India are close to finalising a historic trade agreement.

• Deal Scale: The proposed agreement will cover two billion people and nearly 25% of global GDP.
• Chief Guest: The announcement precedes von der Leyen’s scheduled visit to New Delhi as the Chief Guest at India’s 77th Republic Day.
• India-EU Summit: The conclusion of FTA negotiations is expected to be announced at the 16th India-EU Summit on January 27.

India-EU Trade Relations

• Trade Position: The European Union (EU) is India’s largest trading partner in goods, with bilateral trade exceeding $135 billion in 2024-25.
• Export Basket: India’s major exports are textiles, pharmaceuticals, chemicals, and electronics.
• Import Basket: Capital-intensive goods like nuclear reactors, aircraft, heavy machinery, and medical instruments are the main imports.
• FDI Source: The EU accounts for around 17% of India’s total foreign direct investment (FDI) inflows.
• Tariff Access: India benefits from the Generalised Scheme of Preferences (GSP), which offers reduced tariffs on selected Indian goods.
• Trade Challenge: The Carbon Border Adjustment Mechanism (CBAM) poses compliance challenges for Indian carbon-intensive exports.

Read More> India-Europe Strategic Partnership

{GS2 – IR} Trump Cites Diego Garcia to Justify Greenland Claim **

• Context (IE): President Donald Trump cited Diego Garcia as a cautionary example to justify his renewed efforts to acquire Greenland.

About Chagos Islands and Diego Garcia

• Chagos is a group of 58 islands in the central Indian Ocean, located about 500 km south of the Maldives and 1,600 km southwest of India.
• It forms the southernmost part of the Chagos–Laccadive Ridge, a submerged mountain chain.
• Diego Garcia is the largest and southernmost island of the group; it is a V-shaped coral atoll with a deep-water lagoon.

Significance of Diego Garcia

• Military Hub: It hosts a major joint US–UK military base that serves as a critical hub for operations across the Middle East, Africa, and South Asia.
• Maritime Surveillance: It supports monitoring of key chokepoints, such as the Strait of Malacca and the Bab el-Mandeb, and helps counter China’s influence in the Indian Ocean Region (IOR).

Historical and Legal Context

• BIOT Formation: In 1965, three years before Mauritius’s independence, the UK detached the Chagos Islands from Mauritius, creating the British Indian Ocean Territory (BIOT).
• Military Base: In 1966, the UK leased Diego Garcia to the United States for a long-term military base.
• Forced Displacement: The UK forcibly expelled the entire indigenous population (Chagossians) to Mauritius and Seychelles to clear the islands.
• Mauritius’s Claim: Mauritius has claimed sovereignty over the island since independence, arguing that the detachment violated UN decolonisation principles.
• ICJ Opinion: In 2019, the International Court of Justice ruled that Mauritius’ decolonisation was incomplete and the UK’s administration illegal.
• UN Resolution 2019: The UN General Assembly demanded the UK’s withdrawal from the Chagos Islands within six months.
• 2025 Agreement: The UK agreed to transfer sovereignty of the Chagos Islands to Mauritius; it retained control over Diego Garcia under a 99-year lease, paying an annual fee.
• India’s Stand: India has consistently supported Mauritius’ claim as a necessary step toward decolonisation in the Global South.

Key Reasons for the UK Ceding Sovereignty

• International Pressure: The 2019 ICJ opinion and UNGA resolution held the UK administration illegal and a violation of the right to self-determination.
• Military Base Security: Sovereignty transfer with a 99-year lease for Diego Garcia legally insulated the joint UK–US base from future litigation.
• Diplomatic Reset: The move supports the UK’s post-Brexit “Global Britain” identity by shedding its colonial image and improving ties with the Global South.
• Financial Gain: Paying an annual fee is cheaper and less risky than maintaining an internationally contested colonial possession.

Trump’s Arguments and Comparison Rationale

• Strategic Justification: Trump argued that acquiring strategic territories is necessary to reduce reliance on alliances like the UK for defence.
• Rival Signalling: He claimed that China and Russia would interpret the deal as ‘Western weakness’, extending the logic to Arctic geopolitics.
• Sovereignty Logic: He dismissed long-term leases as insecure, arguing that only full US sovereignty over Greenland ensures permanent security.
• Alliance Pressure: The comparison sought to pressure Denmark and other NATO allies to align with US security priorities.

Read More > Renewed U.S. Interest in Acquiring Greenland | UK Handed Over Chagos Islands to Mauritius

{GS3 – IE} Supreme Court Rules that GAAR Can Override Tax Treaties

• Context (IE): The Supreme Court of India held that capital gains arising from Tiger Global’s 2018 Flipkart stake sale to Walmart are taxable in India.

• Treaty Claim: US-based Tiger Global claimed an exemption under the India-Mauritius DTAA by routing investments through Mauritius-based entities.
• Lack Substance: The Court held that the Mauritius entities were conduit structures lacking genuine commercial substance; real decision-making was exercised from the United States.

Legal Implications of the Supreme Court Ruling

• Substance Over Form: The company’s economic reality takes precedence over its legal structure to detect and penalise tax evasion.
• TRC Role: A Tax Residency Certificate (TRC) is required to claim treaty benefits; however, it alone does not establish eligibility for tax exemption.
• GAAR Override: General Anti-Avoidance Rules (GAAR) prevail over tax treaties (DTAAs) when an arrangement is primarily designed to avoid tax.
• Business Substance: Foreign investors must demonstrate active business operations and decision-making authority in the treaty country to claim tax benefits.
• Grandfathering Scope: Investments made before April 2017 (the effective date for GAAR) can be scrutinised if the structure is a sham or a colourable device.
• Indirect Transfers: Taxation now applies to the sale of offshore shares if their value is derived mainly from Indian assets.

Positive Consequences of the Ruling

• Revenue Augmentation: Taxing high-value offshore transactions increases government revenue from cross-border investments.
• Global Alignment: India’s tax framework now aligns with OECD standards to curb Base Erosion and Profit Shifting.
• Market Integrity: Deterring treaty shopping and round-tripping encourages cleaner, more transparent capital inflows into India.
• Level Playing Field: Eliminating treaty-based tax advantages creates fair competition between foreign investors and domestic businesses.

Negative Consequences of the Ruling

• Investor Uncertainty: Fear of retrospective scrutiny may temporarily weaken global investor confidence in India.
• Compliance Burden: Foreign funds will face higher costs to set up offices and hire staff to demonstrate genuine commercial substance.
• Startup Impact: Taxing exit profits may deepen the ongoing funding slowdown for Indian startups.
• Litigation Risk: Subjective assessments of commercial substance increase the risk of official discretion and disputes.

Read More > Double Taxation Avoidance Agreement (DTAA)

{GS3 – Envi} Sacred Groves in the Northern Western Ghats

• Context (DTE): A new study comparing four forest protection regimes in the Konkan–Northern Western Ghats finds that sacred groves face the highest human disturbance.

Key Findings of the Study

• High Disturbance: Sacred groves recorded the highest Combined Disturbance Index (CDI) ~47.75, indicating maximum cumulative human pressure.
• Private Forests: Private forests (coffee plantations/silviculture, etc.) had CDI ~34.5, showing high degradation among non-state regimes.
• State Protection: Reserve Forests CDI ~31.5 and Protected Areas CDI ~17.5, showing stronger control.
• Landscape Richness: Researchers recorded 3,360 woody plants from 148 species and 43 families.
• Shared Biodiversity: ~ 50% species were shared across all four regimes, showing ecological overlap.

Why Sacred Groves are Facing Higher Pressure?

• Urbanisation Spillover: Expansion of settlements and roads increases fragmentation of groves.
• Cultural Erosion: Decline of taboos and nature-worship norms weakens community enforcement.
• Livestock & Fuel Dependence: Grazing & lopping for fodder & firewood gradually damage the canopy.
• Festival/Tourism Load: Study counts festivals & tourism as a disturbance driver; E.g., Kodagu’s “Devara Kadu Habba” (Sacred Grove Festival) draws visitors and increases trampling inside groves.

Way Forward

• Mosaic Governance: Manage landscapes as a mixed protection system (sacred groves + reserve forests + protected areas + private forests) with regime-specific disturbance control.
• Community Revival: Rebuild local conservation norms through Gram Sabha & community bodies.
• Disturbance Zoning: Create entry/path regulation, seasonal caps on festivals, and no-construction buffer zones; E.g., notified “eco-sensitive micro-zones” around groves.
• Fire Management: Install early warning and a joint fire-preparedness model with the Forest Department.

{GS3 – Agri} Himachal Pradesh Demands 100% Import Duties on Foreign Apples **

• Context (IE): Himachal Pradesh Chief Minister requested a 100% import duty on foreign apples to protect local growers.

• Seasonal Ban: The state sought a complete ban on apple imports during the peak domestic harvest season from July to November.
• Policy Trigger: The demand follows the recent tariff cut on New Zealand apples from 50% to 25% under a Free Trade Agreement (FTA).
• Price Impact: Cheaper off-season imports are driving down prices for domestic inventory.

Apple Production in India

• Global Rank: India is the world’s fifth-largest apple producer, after China, the European Union (treated as a single bloc), the United States, and Turkey.
• Production Volume: Apple output rose by 6% in 2024-25, reaching 2.5 million metric tonnes.
• Regional Share: Jammu and Kashmir accounts for 70% of the output, followed by Himachal Pradesh at 20% and Uttarakhand at 10%.
• Productivity Gap: Indian apple yields average 6-8 tonnes per hectare, well below the global average of 40-60 tonnes.
• Import Dependence: India imports around 0.6 million metric tonnes annually.
  • Source Countries: Turkey and Iran supply lower-cost apples, whereas New Zealand and Chile supply counter-seasonal varieties.
• Cultivation Shift: Farmers are shifting from traditional varieties like Royal Delicious to high-density Gala and Fuji plantations.
• Key Challenges: Rising temperatures, erratic snowfall, inadequate cold-chain infrastructure, etc.

Read More About > Apple Cultivation

{GS3 – S&T} ‘Kill Switch’ and ‘Cyber Insurance’ Solutions for Digital Arrests **

• Context (IE): The Ministry of Home Affairs is considering ‘kill switches’ and ‘cyber insurance’ to counter rapidly rising “digital arrest” scams.

About Kill Switch

• About: Kill switch is a single-point emergency button embedded in banking or UPI applications for instant user protection.
• Mechanism: Once activated, it immediately freezes all outgoing transactions from linked bank accounts, credit cards, and digital wallets.
• Objective: It halts real-time fund transfers when victims are under psychological stress.

About Cyber Insurance

• About: Cyber insurance, also called Cyber Sachet, serves as a post-incident recovery tool after a successful digital fraud.
• Coverage Gap: Traditional insurance policies often exclude losses arising from victims being manipulated into authorising fraudulent transfers.
• Risk Pooling: RBI has proposed a fraud insurance pool, similar to terrorism pools, to distribute risk throughout the banking system.

Read More > Digital Arrest

{Prelims – Geo} Sela Lake *

• Context (TT): Two tourists from Kerala recently drowned after the frozen surface of Sela Lake cracked under their weight.

• Sela Lake, also known as Paradise Lake, is a high-altitude glacial lake in Tawang district, Arunachal Pradesh, that remains frozen in winter.
• The lake lies at about 13,700 feet (4,170 metres), near the summit of Sela Pass.
• It is revered by local Monpa tribes and Buddhist monks as one of 101 sacred lakes.
• The lake is the source of the Nuranang River, a tributary of the Tawang River system.

{Prelims – IR} World Economic Forum

• Context (TOI): India is engaging with major global powers at the 2026 World Economic Forum (WEF) Annual Meeting in Davos.

• The WEF is an international non-profit organisation that brings together governments, businesses, and civil society to discuss global challenges.
• It was founded in 1971 to facilitate public–private cooperation in enhancing the global condition.
• The forum convenes the Annual Meeting to address major global issues and priorities for the year.
• Key Reports: Major publications include the Global Risks Report, Global Gender Gap Report, Global Competitiveness Report, and Energy Transition Index.

{Prelims – Eco} RBI Recommends Connecting CBDCs of BRICS Nations

• Context (ET): The Reserve Bank of India suggested connecting the Central Bank Digital Currencies (CBDCs) of BRICS nations to facilitate direct cross-border transactions.

• Direct Payments: The linkage would allow users to pay foreign merchants directly without first converting funds into US dollars.
• Faster Payments: The proposal aims to make trade and tourism payments faster and cheaper by removing intermediary correspondent banks.
• Trapped Funds: Countries can use bilateral currency swaps to net-off trade imbalances and prevent the accumulation of idle “trapped” funds.
• Possible Roadblocks: The proposal faces risks from
  • Punitive US economic measures for bypassing the dollar
  • Potential Chinese Yuan dominance due to advanced infrastructure
  • Difficulty in agreeing on common cybersecurity standards

Read More> De-dollarisation | Internationalisation of Rupee

{Prelims – Eco} Department of Posts Revamps ATM Infrastructure

• Context (PIB): The Department of Posts announced a revamp of its ATM infrastructure, with over 800 ATMs now installed nationwide.

• The initiative aims to improve access to basic banking services in rural and underserved areas.

About ATMs in India

• Regulatory Authority: Reserve Bank of India (RBI) regulates ATM policy, while National Payments Corporation of India (NPCI) enables nationwide ATM interoperability.
• Major Types:
  • White Label ATMs: WLAs are owned and operated by non-bank entities and are licensed under the Payment and Settlement Systems Act, 2007, to expand rural banking access.
  • Brown Label ATMs: Under this model, third parties own the hardware and site, while sponsor banks handle branding and cash management.
  • Micro-ATMs: These handheld PoS devices are used by Business Correspondents to provide basic banking services through the Aadhaar-enabled Payment System in remote areas.
  • Cash Recycler Machines: These advanced ATMs reuse notes to accept deposits and dispense cash, lowering manual replenishment costs.

• ATM Landscape: Public sector banks operate the largest ATM network; bank-owned ATMs have declined while white-label ATMs expanded.

{Prelims – S&T} Japan’s Akatsuki Mission *

• Context (TOI): Japan officially terminated the Akatsuki mission after losing contact with the spacecraft for more than a year.

• Akatsuki, also known as PLANET-C or the Venus Climate Orbiter (VCO), was a mission by the Japan Aerospace Exploration Agency (JAXA) and the only active spacecraft orbiting Venus.
• Objective: It studied Venusian volcanism and atmospheric dynamics, particularly super-rotation.
  • Super-Rotation: Venusian winds circulate nearly 60 times faster than the planet’s slow rotation.
• Orbit: It operated in an elliptical near-equatorial orbit, enabling continuous monitoring of cloud movements and global atmospheric flows.
• Scientific Payload: The orbiter had five cameras across infrared, ultraviolet, and visible bands, plus an ultra-stable oscillator for 3D atmospheric radio-science mapping.
• Key Findings:
  • The mission discovered a massive 10,000 km bow-shaped wave in the upper atmosphere that remained stationary over a highland region.
  • Observations showed that Venus’s super-rotation is driven by solar heating and thermal tides.

{Prelims – Defence} Nagpur Ammunition Facility *

• Context (DDN): Defence Minister inaugurated a Medium Calibre Ammunition Manufacturing Facility at Solar Defence & Aerospace Limited (SDAL), Nagpur, Maharashtra.

• The Defence Minister also flagged off the first export tranche of Guided Pinaka rockets to Armenia.
• The facility is a fully automated plant designed to manufacture 30mm ammunition for the Indian Army and the Indian Navy’s weapon systems.
• Significance: It strengthens private-sector participation and advances India’s indigenous defence manufacturing, supporting Atmanirbhar Bharat.

Read More > DPM 2025