UPSC Daily Current Affairs 5th March 2026
Relevance: GS Paper 2 (International Relations—Bilateral Agreements); GS Paper 3 (Energy Security, Infrastructure)
Why in News?
During the visit of Canadian Prime Minister Mark Carney to India, the Department of Atomic Energy (DAE) signed an agreement with the Canadian company Cameco. Under this deal, Cameco will supply 22 million pounds (about 10,000 tonnes) of uranium between 2027 and 2035. The contract is valued at $1.9 billion (2.6 billion Canadian dollars).
Background and Context
India and Canada share a very long relationship in the nuclear sector. In the 1950s, they collaborated on India’s second nuclear reactor, CIRUS (Canada India Reactor Utility Service), and in the 1960s on the Rajasthan Atomic Power Project (RAPPs). The current deal with Cameco, which previously supplied uranium in 2020-21, marks a return to normalcy in bilateral relations that were recently troubled. Additionally, just two weeks prior, India finalised a similar deal with Kazakhstan’s state-owned company Kazatomprom.
Key Developments
- Massive Supply Chain: The deal secures 10,000 tonnes of uranium for India over nearly a decade.
- Rapid Expansion Target: These contracts are critical for India’s plan to increase its nuclear power capacity by more than 10 times, moving from the current 9 GW to 100 GW by 2047.
- Diversification of Sources: India is now sourcing uranium from at least four major countries:
- Uzbekistan,
- Kazakhstan,
- Canada, and
- Russia (which has a lifetime supply commitment for Kudankulam, Tamil Nadu).
Core Issues Involved
The primary issue is India’s dependence on imported uranium. Currently, more than 70 per cent of India’s uranium requirements are met through imports. While India has deposits, it lacks high-grade ore, forcing reliance on global markets to power its reactors.
Causes / Reasons for Import Dependence
- Low-Quality Domestic Ore: Indian uranium deposits have a very low concentration of 0.02 to 0.45 per cent, compared to the global average of 1 to 2 per cent.
- High Canadian Ore Quality: By contrast, some Canadian mines boast ore concentrations as high as 15 per cent.
- High Extraction Cost: Because of the poor quality, mining and processing domestic uranium costs much more than buying imported fuel.
Why this Agreement Matters:
Political:
- Improves Bilateral Ties: The deal marks a return to normalcy in India-Canada relations, which had been extremely troubled recently.
- Strategic Diversification: India is safely expanding its supply lines by sourcing fuel from multiple countries (Canada, Kazakhstan, Uzbekistan, and Russia).
Economic:
- Powers Massive Expansion: It ensures a steady fuel supply for India’s massive goal to increase nuclear power capacity from 9 GW to 100 GW by 2047.
- Cost Efficiency: Importing high-grade uranium (up to 15% concentration) is much cheaper than mining India’s low-grade domestic ore.
Technological / Institutional:
- Buys Time for Thorium: A guaranteed supply of imported uranium keeps current reactors running. This gives Indian scientists the time needed to slowly develop the three-stage nuclear programme and special reactors that will eventually run on thorium.
- Protects Domestic Reserves: By importing fuel for power plants, India can safely reserve its limited domestic uranium for its weapons programme and as a cushion against supply disruptions.
Government Response / Policy Measures
- Capacity Expansion: Aiming to increase nuclear energy capacity from 9 GW to 100 GW by 2047.
- Import Diversification: Securing long-term fuel contracts with multiple nations (Canada, Kazakhstan, Uzbekistan, and Russia).
- Domestic Production: Ramping up local mining specifically for the weapons programme and emergency reserves.
- Widespread Exploration: Conducting searches for new uranium deposits across 15 Indian states and studying the feasibility of mining overseas.
- Advancing Technology: Pushing the Three-Stage Nuclear Programme forward by making a prototype fast-breeder reactor operational in Kalpakkam.
Challenges / Concerns
- Heavy Import Reliance: India depends on foreign countries for over 70 per cent of its current nuclear fuel needs.
- Low-Grade and Expensive Ore: Domestic uranium has a very low concentration (0.02 to 0.45 per cent), making local mining much more expensive than importing high-grade fuel.
- Inadequate Domestic Supply: Even with increased mining, domestic fuel is expected to meet a maximum of only 30 per cent of future nuclear power needs.
- Slow Technological Progress: The transition to the Thorium-driven Three-Stage Nuclear Programme, conceptualized in the 1950s, has been extremely slow, keeping India stuck in the first stage.
Conclusion
The long-term uranium deals with Canada and Kazakhstan are essential stepping stones. They guarantee immediate energy security for the next decade while giving Indian scientists the necessary time to perfect the complex, thorium-based technology required for ultimate self-reliance.
Uranium Ore
1. Basic Chemical Properties
- Atomic Number: 92
- Atomic Weight (Mass): Approximately 238 u
- Symbol: U
2. Ores and Isotopes
- Primary Ore: Uraninite (commonly known as Pitchblende).
- Key Isotopes: * Uranium-238 (U-238): Makes up about 99.3% of natural uranium. It is not directly fissile but is “fertile” (can be converted into nuclear fuel).
- Uranium-235 (U-235): Makes up about 0.7%. It is fissile, meaning it is the actual fuel that sustains a nuclear chain reaction for power generation.
3. Uranium in India
- Ore Quality: India has very low-grade ore (0.02% to 0.45%) compared to the global average (1% to 2%).
- First Mine: Jaduguda in Jharkhand (opened in 1967).
- Major Reserves:
- Andhra Pradesh: Tummalapalle (holds one of the world’s largest reserves).
- Jharkhand: Jaduguda, Narwapahar, and Bhatin.
- Meghalaya: Domiasiat region.
- Rajasthan: Rohil region.
- Institutional Control: All mining and processing are managed exclusively by the Uranium Corporation of India Limited (UCIL), under the Department of Atomic Energy (DAE).
- Annual Consumption: India consumes about 1,500 to 2,000 tonnes of uranium every year (requirement was 1,884 tonnes in 2025).
UPSC PYQ
Q. Consider the following statements:(UPSC 2016)
Statement-I:
India, despite having uranium deposits, depends on coal for most of its electricity production.
Statement-II:
Uranium, enriched to the extent of at least 60%, is required for the production of electricity.
Which one of the following is correct in respect of the above statements?
A. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
B. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
C. Statement-I is correct but Statement-II is incorrect
D. Statement-I is incorrect but Statement-II is correct
Answer: C
Explanation:
- Statement-I is correct:
India possesses uranium deposits, mainly in states such as Jharkhand, Andhra Pradesh, Telangana, and Rajasthan. However, the reserves are limited and relatively low-grade, so India still relies heavily on coal for electricity generation. Coal accounts for the major share of India’s power production. - Statement-II is incorrect:
Nuclear power plants used for electricity generation generally require low enriched uranium (LEU) containing about 3–5% U-235.
Enrichment levels of 60% or higher are associated with highly enriched uranium, which is generally related to weapons-grade material, not normal electricity generation.
Conclusion:
Statement-I is correct, but Statement-II is incorrect.
Correct answer: C
CARE MCQ
Q) With reference to uranium resources and nuclear energy in India, consider the following statements:
- The quality of domestic uranium ore in India is significantly higher than the global average.
- Currently, more than 70 per cent of India’s uranium requirement is met through imports.
- The domestic production of uranium in India is concentrated mainly in Jharkhand and Andhra Pradesh.
- India’s three-stage nuclear programme is ultimately driven chiefly by uranium.
Which of the statements given above are correct?
A. 1 and 4 only
B. 2 and 3 only
C. 1, 2 and 3 only
D. 2, 3 and 4 only
Answer: B
Explanation:
Statement 1 – Incorrect
- India’s uranium ore is low grade, typically around 0.02% to 0.45% uranium content.
- This is lower than the global average, which makes extraction more difficult and costly.
Statement 2 – Correct
- India imports a large share of uranium to meet the fuel requirements of its nuclear reactors.
- More than 70% of the requirement is met through imports from countries such as Kazakhstan, Canada, and Australia.
Statement 3 – Correct
- Most domestic uranium mining occurs in:
- Jharkhand (Jaduguda, Narwapahar, Turamdih)
- Andhra Pradesh (Tummalapalle mines).
Statement 4 – Incorrect
- India’s three-stage nuclear programme, designed by Homi J. Bhabha, ultimately aims to utilise thorium reserves, not uranium.
- Thorium is abundant in India, especially in monazite sands along the Kerala coast
Relevance: GS Paper 2 (Government Policies and Interventions); GS Paper 3 (Indian Economy, Growth, Development, Employment, and Investment Models).
Why in News?
The Government of India recently released a comprehensive report highlighting the success of its decade-long regulatory reforms aimed at improving the Ease of Doing Business (EoDB). The data shows a massive 27% increase in active registered companies, growing from 1.55 lakh in 2020–21 to 1.98 lakh in 2025–26.
Background and Context
Over the past decade, India has strategically focused on becoming an emerging global business powerhouse. The government launched an ambitious reform program to remove redundant compliances, streamline procedures, and shift towards a trust-based governance model. This is reflected in the RBI’s Business Expectations Index, which has consistently stayed above the neutral benchmark of 100 through FY 2024-25 and Q2 of FY 2025-26, indicating highly positive industry sentiment.
Government’s Strategic Focus on Ease of Doing Business:
The transformation of the business environment rests on four critical pillars:
- Institutional Reforms: Building ecosystems for startups and MSMEs.
- Regulatory Simplification: Reducing the “Compliance Burden.”
- Financial & Tax Reforms: Ensuring tax certainty and credit flow.
- Trade Facilitation: Modernizing customs and digital trade.
1. Institutional Support for Businesses
The government has created structured mechanisms to help businesses access capital and protect their operations.- Start-up Ecosystem: Under the Start-Up India initiative, eligible companies receive recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This provides them with tax incentives and fast-tracked Intellectual Property Rights (IPR) processing. By February 2026, India had over 2.16 lakh DPIIT-recognised start-ups.
- Credit Access for MSMEs: Credit Guarantee Schemes provide collateral-free loans to smaller businesses. For example, the Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE) provides support up to ₹10 crore, while the scheme for start-ups covers up to ₹20 crore.
- Digital Loan Approvals: Public sector banks have adopted a Credit Assessment Model (CAM). This system uses digital data to automatically evaluate and approve loans for Micro, Small, and Medium Enterprises (MSMEs), speeding up the funding process.
- Insurance Sector Reforms: The Sabka Bima, Sabki Raksha Act, 2025 increased the Foreign Direct Investment (FDI) limit in insurance to 100%. It also reduced the capital requirement for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, ensuring businesses have better access to risk protection.
2. Streamlining Rules and Decriminalisation
A major focus of the reforms has been to reduce the fear of severe legal action for minor business mistakes, promoting a system of trust.- The Jan Vishwas Act: This legislation changes the punishment for minor, technical rule violations from criminal penalties (jail time) to financial fines. The Jan Vishwas Act, 2023 decriminalised 183 provisions. The 2025 Bill proposes to amend 355 more provisions, reflecting the principle of “Minimum Government, Maximum Governance”.
- Reducing Compliance Burden: Through the Regulatory Compliance Burden (RCB) initiative, the government has eliminated over 47,000 unnecessary compliances across various departments to save time for business owners.
- Consolidating Financial Rules: The Reserve Bank of India (RBI) combined over 9,000 different circulars into 238 clear Master Directions. Similarly, the Securities Markets Code (SMC), 2025 merged three older laws (including the SEBI Act) to govern the stock markets more efficiently.
3. Trade Facilitation and Taxation
Simplifying how businesses pay taxes and trade across borders is essential for economic growth.
- Trust-Based Customs: The government introduced the Authorised Economic Operator (AEO) system for trusted importers. It allows a deferred duty payment mechanism (‘Clear First-Pay later’). The Union Budget 2026-27 extended this payment period from 15 days to 30 days for Tier 2 and Tier 3 AEOs, which facilitates just-in-time manufacturing.
- Minimum Alternate Tax (MAT): MAT ensures that profitable companies pay a baseline tax. Recent reforms reduced the MAT rate from 15% to 14% and exempted non-residents who opt for presumptive taxation.
- GST 2.0: The Goods and Services Tax was upgraded to a simpler two-rate structure. This reform corrected the inverted duty structure (where raw materials are taxed higher than the final product) in sectors like textiles. Due to simpler rules, registered GST taxpayers increased to over 1.6 crore by January 2026.
- Foreign Investment: Individuals outside India can now invest up to 10% in listed Indian companies through the Portfolio Investment Scheme (PIS), up from the previous 5%.
4. Labour Laws and Corporate Insolvency
Clear rules regarding hiring workers and managing business failures are crucial for industrial stability.
- Labour Codes: The government combined 29 central labour laws into four simplified Labour Codes. These codes introduce a single electronic registration system and increase the threshold for retrenchment (firing workers) or factory closure to establishments with 300 workers, giving factories more operational flexibility without needing prior government approval.
- Insolvency and Bankruptcy Code (IBC), 2016: The IBC provides a time-bound process to resolve failing companies (corporate debtors). If a company cannot be rescued, its assets are sold to repay banks. By September 2025, creditors had recovered ₹3.99 lakh crore, which is about 170% of the liquidation value of those companies. This strengthens the overall credit ecosystem.
5. Quality Standards for Manufacturing
- Quality Control Orders (QCOs): To make Indian products globally competitive and safe for consumers, the government issues QCOs. By December 2025, mandatory quality standards covered 723 products, ensuring early detection of defects and restricting the sale of sub-standard goods.
Challenges in implementation reforms:
- State-Level Execution: Uneven adoption of central reforms (such as the four Labour Codes and the RCB+ initiative) by state governments delays true ease of doing business across the country.
- Digital Divide for MSMEs: Small businesses face hurdles in rapidly adapting to new, technology-heavy platforms like the Customs Integrated System (CIS) and the Credit Assessment Model (CAM).
- Transition Friction: Merging old laws into new frameworks, such as the consolidated Securities Markets Code (SMC), 2025, creates temporary compliance confusion for companies.
- Balancing Quality and Capacity: Enforcing strict standards through the rapid expansion of Quality Control Orders (QCOs) (now covering 723 products) puts heavy compliance pressure on smaller manufacturers.
- Insurance Penetration: Despite allowing 100% FDI, a massive “protection gap” still exists in extending insurance coverage to rural areas and the unorganized sector.
- Taxation Anomalies: Continuous monitoring is required to ensure the inverted duty structure (where raw materials are taxed higher than finished goods) is fully resolved under GST 2.0.
Way Forward
- State-Level Execution: Ensure all State governments actively adopt Central reforms (like the Labour Codes and RCB+) for uniform business rules across India.
- Digital Handholding: Provide targeted training to help small MSMEs adapt to new technology platforms like the Customs Integrated System (CIS) and the Credit Assessment Model (CAM).
- Balanced Regulation: Maintain continuous dialogue with industry bodies before implementing new Quality Control Orders (QCOs) to ensure they do not harm MSME production.
- Capacity Building: Strengthen institutional capacity to smoothly transition businesses into the newly consolidated laws, such as the Securities Markets Code 2025 and GST 2.0.
Conclusion:
India’s transformation into a global business powerhouse is anchored in structural reforms across taxation, finance, labour, and trade. By prioritizing trust-based governance, decriminalization, and digital integration, India is not just enhancing the Ease of Doing Business, but successfully shaping a resilient and future-ready economy.
UPSC PYQ
Which one of the following is not a sub-index of the Ease of Doing Business Index prepared by the World Bank?(UPSC 2019)
A. Maintenance of law and order
B. Paying taxes
C. Registering property
D. Dealing with construction permits
Answer: A
Explanation
The Ease of Doing Business Index measured how easy it is to start and operate a business in different countries. It was based on several sub-indicators related to business regulations.
Important sub-indices included:
- Starting a business
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency
Option A – Maintenance of law and order
- This is not a component of the Ease of Doing Business Index.
- The index focuses on regulatory and procedural aspects of business operations, not general law-and-order conditions.
CARE MCQ
The ‘Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025’ introduces which of the following key reforms?
A. It restricts Foreign Direct Investment (FDI) in the insurance sector to 74% to protect domestic companies.
B. It increases the Foreign Direct Investment (FDI) limit in the insurance sector to 100%.
C. It lowers the IRDAI approval threshold for share transfers from 5% to 1%.
D. It increases the Net Owned Fund requirement for foreign reinsurers to ₹5,000 crore.
Answer: B
Explanation
The Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Act, 2025 aims to expand insurance coverage and strengthen the insurance sector in India.
Option A – Incorrect
- The reform does not restrict FDI to 74%.
- Instead, it expands foreign investment limits.
Option B – Correct
- The Act proposes to increase the FDI limit to 100% in the insurance sector.
- The objective is to bring greater capital inflows, improve insurance penetration, and bridge the protection gap in India.
Option C – Incorrect
- The Act does not reduce the IRDAI approval threshold for share transfers to 1%.
Option D – Incorrect
- There is no provision increasing the Net Owned Fund requirement for foreign reinsurers to ₹5,000 crore.
