UPSC Daily Current Affairs - 4th February 2026
Relevance:
GS Paper III: Environment, Conservation, Water Security, Disaster Management, Climate Change.
Important Keywords
For Prelims:
- Reciprocal Tariffs, Punitive Duties, Bilateral Trade Agreement (BTA), Friendshoring, Generalised System of Preferences (GSP), Sanitary and Phytosanitary (SPS) Standards, Initiative on Critical and Emerging Technology (iCET).
For Mains:
- Strategic trade partnerships in a multipolar world, Trade policy and geopolitical alignment, Strategic autonomy vs economic interdependence, Supply chain diversification, Energy security and trade diplomacy, Protectionism vs free trade.
Why in News?
- The United States has reduced tariffs on Indian goods to 18%, down from an effective rate of nearly 50% that included punitive duties.
- The move signals a de-escalation of trade tensions and reinforces India’s position as a key strategic partner of the US in the Indo-Pacific region.
- The agreement is viewed as part of a broader geopolitical and economic alignment amid shifting global supply chains.
Key Highlights of the India–US Trade Deal
Tariff Rationalisation
- The US lowered the reciprocal tariff from 25% to 18%.
- The additional 25% punitive duty imposed in August 2025 over India’s Russian oil purchases has been removed.
- Effective tariff burden reduced from ~50% to 18%, restoring export competitiveness.
India’s Commitments
- Energy Shift: India is expected to significantly reduce dependence on Russian crude and increase imports from the US and potentially Venezuela.
- Market Access: India may reduce tariffs and non-tariff barriers on American goods, possibly to near zero in select sectors.
- Large Procurement: India could purchase up to USD 500 billion worth of US energy, agriculture, coal, and technology products.
- Buy American Orientation: Stronger preference for US suppliers in large industrial and government procurements.
Background: Evolution of Tariffs
- “Tariff King” Narrative: The US has historically criticised India’s high import duties.
- Mid-2025: US imposed a 25% reciprocal tariff matching India’s average tariffs.
- August 2025: Another 25% punitive duty added due to India’s continued purchase of Russian oil.
- India’s Pre-Deal Measures:
- Duty reductions on select imports (e.g., heavy motorcycles, bourbon whisky)
- Passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, opening the nuclear sector to private participation.
- These steps helped thaw trade tensions.
India–US Trade Relations: Key Facts
- Bilateral trade (FY25): USD 132 billion (up from USD 119.71 billion in FY24)
- India’s trade surplus: USD 40.82 billion
- Major US exports to India:
- Mineral fuels and oils
- Nuclear reactors and machinery
- Electrical equipment
- Major Indian exports to the US:
- Electrical machinery
- Pharmaceuticals
- Gems and jewellery
- Iron and steel products
- The US is the 3rd largest investor in India with cumulative FDI of USD 70.65 billion (2000–2025).
Strategic Framework
- US–India COMPACT (2025): Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology.
- Mission 500: Target to expand bilateral trade to USD 500 billion by 2030.
- Negotiations underway for a Bilateral Trade Agreement (BTA).
Significance of Tariff Reduction
For India
- Boost to Exports: Textiles, pharmaceuticals, gems, and engineering goods gain competitiveness.
- Competitive Edge: Lower tariff than Vietnam and Bangladesh (~20%) and far below China (30–35%).
- Economic Stability: Reduces trade-war uncertainty, potentially stabilising the rupee and encouraging FDI.
- Friendshoring Opportunity: Positions India as an alternative manufacturing hub for supply chains shifting from China.
For the United States
- Energy Exports: India’s rising import dependence (88.2% in FY25) makes it a major long-term buyer.
- Nuclear & Defence Access: Enabled by the SHANTI Act, facilitating US participation in India’s nuclear sector.
- Technology Expansion: Supports collaboration under the Initiative on Critical and Emerging Technology (iCET).
- Digital Infrastructure: Tax holidays for foreign data centres benefit major US tech firms investing in AI infrastructure.
Challenges Associated with the Trade Deal
Strategic Autonomy Concerns
- Reducing Russian oil imports may strain India’s long-standing strategic partnership with Moscow.
- Tests India’s multi-alignment foreign policy.
Transactional Diplomacy
- Reciprocal tariff matching suggests a quid-pro-quo approach, where strategic concessions may require economic payback.
Risk of Chinese Retaliation
- China has warned of consequences as India strengthens US ties.
- India remains dependent on China for rare earths and pharmaceutical APIs, making supply chains vulnerable.
Regional Disadvantages
- Some competitors still enjoy benefits under the Generalised System of Preferences (GSP), withdrawn from India in 2019.
Domestic Economic Risks
- Opening dairy and poultry sectors to subsidised US imports could trigger farmer distress.
- Switching from discounted Russian oil may increase India’s current account deficit.
Regulatory Barriers
- US Sanitary and Phytosanitary (SPS) standards remain obstacles for Indian exports.
- Potential pressure to align intellectual property laws could raise healthcare costs.
Digital Trade Issues
- Debate over data localisation vs free flow of data continues.
- Possible friction with India’s data protection framework.
How India Can Leverage the Trade Pivot
- Balance Energy Security: Accelerate renewable energy, green hydrogen, and nuclear expansion.
- Diversify Export Markets: Fast-track FTAs with Gulf and East Asian nations to reduce overdependence on the US.
- Protect Domestic Sectors: Use product-specific safeguards instead of blanket tariff reductions.
- Strengthen Manufacturing: Move from assembly to deep manufacturing under Make in India.
- Promote Innovation: Collaborate in AI, semiconductors, and space technologies while retaining public-interest safeguards in pharmaceuticals.
- Support Farmers: Focus on value-added agricultural exports rather than raw commodities.
Conclusion
The reduction of US tariffs to 18% provides India with a crucial strategic window to enhance export competitiveness and attract global supply chains. However, the long-term success of this partnership depends on balancing economic gains with strategic autonomy, safeguarding domestic industries, and building a resilient manufacturing base aligned with the vision of Viksit Bharat.
UPSC PYQ
Q. Consider the following countries: (2018)
- Under Ramsar Convention, it is mandatory on the part of the Government of India to protect and conserve all the wetlands in the territory of India.
- The Wetlands (Conservation and Management) Rules, 2010 were framed by the Government of India based on the recommendations of Ramsar Convention.
- The Wetlands (Conservation and Management) Rules, 2010 also encompass the drainage area or catchment regions of the wetlands as determined by the authority.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Ans: (c)
Q. Consider the following statements regarding the India–US Trade Deal 2026:
- The United States reduced reciprocal tariffs on Indian goods to 18%.
- The punitive duty imposed due to India’s Russian oil imports has been removed.
- India has regained benefits under the Generalised System of Preferences (GSP) as part of the deal.
CARE MCQ
Q. Consider the following statements regarding the India–US Trade Deal 2026:
- The United States reduced reciprocal tariffs on Indian goods to 18%.
- The punitive duty imposed due to India’s Russian oil imports has been removed.
- India has regained benefits under the Generalised System of Preferences (GSP) as part of the deal.
Which of the statements given above is/are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: A
Explanation:
• Statement 1 – Correct: Tariffs were reduced to 18%.
• Statement 2 – Correct: Punitive duties were withdrawn.
• Statement 3 – Incorrect: India has not yet regained GSP benefits.
Relevance:
GS Paper II (Governance & Health Policy)
Important Keywords
For Prelims:
- Biopharma SHAKTI, Union Budget 2026–27, Biologics, Biosimilars, National Biopharma Mission (NBM), Innovate in India (i3), BIRAC, Department of Biotechnology (DBT), CDSCO, NIPERs, Genome India Programme, ZyCoV-D, Production Linked Incentive (PLI) Scheme,
For Mains:
- Global Biopharma Hub, Pharmaceutical Value Chain Upgradation, Health Security, Innovation-driven Growth, Regulatory Credibility, Clinical Trial Ecosystem, Technology Transfer, Bio-entrepreneurship, Import Substitution, Supply Chain Resilience.
Why in News?
The Union Budget 2026–27 has announced Biopharma SHAKTI, a ₹10,000 crore initiative aimed at strengthening India’s biologics and biosimilars ecosystem, signalling a strategic shift from generic drug manufacturing to high-value, innovation-driven biopharmaceuticals.
Background: Why Biopharma Is Strategically Important
Biopharma refers to the development and manufacture of medicines using living biological systems such as human or animal cells, bacteria, fungi and microbes. Unlike traditional chemical drugs, biopharmaceuticals are complex, targeted, and high-value therapies.
Examples include:
- Vaccines
- Monoclonal antibodies
- Biosimilars
- Recombinant insulin
- Gene and cell therapies
- Therapeutic proteins
The global healthcare landscape is witnessing:
- Rising non-communicable diseases (cancer, diabetes, autoimmune disorders)
- Increased reliance on biologics and biosimilars
- Rapid expansion of the $1.1 trillion global pharmaceutical market
This makes biopharma central to health security, economic growth, innovation, and strategic autonomy.
Union Budget 2026–27: Biopharma SHAKTI Initiative
Key Budget Announcements
Biopharma SHAKTI
- Outlay: ₹10,000 crore (5 years)
- Objective: Strengthen end-to-end ecosystem for biologics and biosimilars
- Reduce import dependence and enhance global supply chain integration
Human Resource Development
- Establishment of 3 new NIPERs
- Upgradation of 7 existing NIPERs
- Creation of specialised talent in biopharma R&D, manufacturing and regulation
Clinical Research Expansion
- Development of 1,000+ accredited clinical trial sites
- Enables large-scale, ethical, and globally compliant trials
Regulatory Strengthening
- Capacity enhancement of CDSCO with specialised scientific manpower
- Faster approvals aligned with global regulatory standards
Why This Matters
The Budget integrates manufacturing scale, skilled manpower, clinical research, and regulatory credibility into a single framework. This signals a clear intent to move India:
- From generic drug leadership
- To a high-quality, innovation-driven biopharma powerhouse
It strengthens domestic access to advanced therapies while positioning India as a trusted global supplier.
Government Initiatives to Strengthen India’s Biopharma Sector
National Biopharma Mission (NBM) – “Innovate in India (i3)”
Launched in May 2017, the National Biopharma Mission (NBM) is a flagship initiative aimed at transforming India into a $100-billion global biotech industry and capturing 5% of the global pharmaceutical market.
- Outlay: ₹1,500 crore
- Funding: Co-funded by the World Bank
- Implementing Agency: Biotechnology Industry Research Assistance Council (BIRAC)
- Nodal Ministry: Department of Biotechnology
Focus Areas
- Vaccines (HPV, Dengue)
- Biosimilars (Cancer, Diabetes, Rheumatoid Arthritis)
- Bio-therapeutics
- Diagnostics and medical devices
Key Achievements
- 101 projects supported involving 150+ organisations and 30 MSMEs
- 1,000+ jobs created, including 304 scientists
- Establishment of clinical trial sites with a database of 8 lakh volunteers
- Integration with the Genome India Programme (10,000 genome sequencing)
- Support to development of ZyCoV-D, the world’s first DNA-based COVID-19 vaccine
NBM as a Catalyst of India’s Health Innovation Ecosystem
NBM has played a crucial role in translating scientific research into affordable healthcare solutions, nurturing a new generation of biotech entrepreneurs.
- Voxel Grids Innovations Pvt. Ltd. (Bengaluru)
- Developed India’s first indigenous MRI scanner comparable to global standards
- Funded ₹12.4 crore by BIRAC
- Deployed in cancer hospitals in Mumbai and Assam
- Levim Lifetech Pvt. Ltd. (Chennai)
- Developed India’s first biosimilar of Liraglutide for Type-2 diabetes
- Priced at one-third of imported versions
- 85% clinical trial costs supported under NBM
Additional outcomes:
- ~10,000 biotech start-ups supported since 2014
- 100+ bio-incubation centres established
- 7 Regional Technology Transfer Offices
- 850+ IP filings and 120 technology transfers
- 7,000+ professionals trained, including 45% women
- Voxel Grids Innovations Pvt. Ltd. (Bengaluru)
BIRAC-Led Biotech Innovation Support
Established in 2012, BIRAC acts as the innovation financing and incubation backbone of India’s biotech ecosystem.
Key Schemes
Biotechnology Ignition Grant (BIG):
- Up to ₹50 lakh for early-stage start-ups (1,000+ innovators supported)
SEED Fund:
- ₹30 lakh equity support for proof-of-concept
LEAP Fund:
- ₹100 lakh for commercialisation-ready technologies
जनCARE – Amrit Grand Challenge:
- 89 digital health innovations in AI, ML, telemedicine, blockchain
- Focus on Tier-II, Tier-III cities and rural areas
Manufacturing and Industrial Strengthening Measures
To reduce import dependence and strengthen domestic supply chains, the government has launched:
- Production Linked Incentive (PLI) Scheme for Pharmaceuticals
- Strengthening of Pharmaceutical Industry (SPI) Scheme
- Bulk Drug Parks Scheme
Key Objectives
- Boost manufacturing capacity
- Reduce dependence on imported APIs and intermediates
- Upgrade MSMEs to WHO-GMP standards
- Create common infrastructure in pharma clusters
- Improve export competitiveness and supply chain resilience
Promotion of Research and Innovation in Pharma-MedTech (PRIP)
Launched in 2023 with an outlay of ₹5,000 crore, the PRIP scheme aims to build an innovation-driven Pharma-MedTech ecosystem.
- Supports:
- New drugs and biosimilars
- Precision medicine
- Complex generics
- Advanced medical devices
- Promotes industry–academia collaboration
- Establishes Centres of Excellence at NIPERs
BioE3 Policy and Bio-RIDE Scheme
BioE3 Policy (Approved August 2024)
Biotechnology for Economy, Environment and Employment
Strategic Sectors
- Precision biotherapeutics
- Biobased chemicals and enzymes
- Functional foods and smart proteins
- Climate-resilient agriculture
- Carbon capture and utilisation
- Marine and space biotechnology
Bio-RIDE Scheme (Launched September 2024)
- Outlay: ₹9,197 crore (15th Finance Commission period)
- Merged DBT umbrella schemes
- Added Biomanufacturing and Biofoundry component
Three Pillars
- Biotechnology R&D
- Industrial & Entrepreneurship Development
- Biomanufacturing and Biofoundry
Conclusion
India’s biopharma strategy reflects a deliberate and integrated policy approach—linking research, innovation, manufacturing, entrepreneurship and regulation. As the country’s disease profile shifts toward chronic and non-communicable diseases, access to biologic therapies becomes central to both health outcomes and economic growth.
The Biopharma SHAKTI initiative announced in Union Budget 2026–27, with an outlay of ₹10,000 crore, builds upon this foundation by strengthening workforce capacity, clinical research infrastructure and regulatory efficiency. Together, these initiatives position India to emerge not just as the “pharmacy of the world”, but as a global biopharma innovation and manufacturing hub.
UPSC PYQ
Q. Biotechnological research is promoted through the development of Biotechnology Parks.
Which of the following is/are essential to bring technology to market? (CAPF 2024)
- Development of new product
- Entrepreneurship
- Technology incubation
-
- 1 only
- 1 and 2 only
- 1, 2 and 3
- 2 and 3 only
- Statement 1 – Correct Development of new products is the starting point of technology commercialisation. Without product development, research cannot translate into market outcomes.
- Statement 2 – Correct Entrepreneurship converts technological innovation into viable business ventures. It provides risk-taking ability, business models, and market orientation.
- Statement 3 – Correct Technology incubation bridges the gap between laboratory research and the market by providing infrastructure, mentorship, regulatory support, and seed funding.
CARE MCQ
Q. Consider the following statements regarding the National Biopharma Mission (NBM) – Innovate in India (i3):
- It was launched in 2017 to transform India into a leading global biotech industry.
- It is co-funded by the World Bank and implemented by BIRAC under the Department of Biotechnology.
- It focuses on developing vaccines, biotherapeutics, diagnostics and medical devices.
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
- Statement 1 is correct: The National Biopharma Mission was launched in May 2017 with the objective of transforming India into a leading global biotech industry.
- Statement 2 is correct: The mission is co-funded by the World Bank and implemented by BIRAC under the Department of Biotechnology (DBT).
- Statement 3 is correct: The mission focuses on vaccines, biotherapeutics, diagnostics, and medical devices to address the disease burden and improve affordability and access.
