Daily Current Affairs (DCA) 10 April, 2025

Daily Current Affairs Quiz
10 April, 2025

International Affairs

1. Global Trade War Escalates as China, EU Hit Back at Trump’s Tariffs

Context:

The global trade war intensified, as China and the European Union imposed new tariffs on US goods in retaliation to President Donald Trump’s sweeping 104% tariffs on Chinese imports, further destabilizing global markets and increasing the risk of a global recession.

Key Developments:

China Retaliates with Massive Tariff Hike

• China raised tariffs on US imports from 34% to 84%, affecting a wide range of goods.
• Beijing also imposed restrictions on 18 additional US companies, mostly in defense-related industries, bringing the total to over 60 punished US firms.
• Chinese President Xi Jinping vowed to deepen ties with neighboring countries and improve regional supply chains to counter US pressure.
• China’s currency (yuan) is under heavy downward pressure, but the central bank is acting to stabilize it.

European Union Responds

• The EU voted to impose a 25% tariff on selected US imports as part of its first round of countermeasures.
• The bloc faces US tariffs of 20% on most products, and higher duties on autos and steel.
• EU’s actions aim to defend multilateral trade norms and protect European industries.

Market Reaction & Economic Fallout

• Global stock markets plunged, wiping out trillions in market value.
• Oil prices dropped to four-year lows.
• Investors dumped US Treasuries and the dollar, signaling fading confidence in traditional safe havens.
• S&P 500 suffered its deepest loss since the 1950s.
• Global pharmaceutical stocks declined after Trump hinted at major new tariffs on drug imports.

Economic Risks & Consumer Impact

• JPMorgan Chase CEO Jamie Dimon warned the tariffs could lead to a recession and loan defaults.
• Economists project the tariffs will raise household costs in the US by thousands of dollars annually.
• A Reuters/Ipsos poll showed 75% of Americans expect prices to rise due to tariffs.

US Trade Strategy and Diplomacy

• US Treasury Secretary Scott Bessent stated that the administration could reach tariff agreements with allies such as Japan, South Korea, and Vietnam before confronting China as a bloc.
• Bessent will lead negotiations with over 70 countries to reduce tariffs.
• He emphasized that while markets are volatile, CEOs say the underlying US economy remains strong.
• US Trade Representative Jamieson Greer clarified that Trump’s tariff policy does not aim to revive trade with Russia.

Trade Balance Trends (Goods Only, in $ billion):

With China:

Year	Exports	Imports	Trade Balance	Deficit Share (%)
2018	120.3	538.5	-418.2	48.1
2023	147.8	426.9	-279.1	26.3
2025*	20.4	73.3	-52.9	17.5

With EU:

Year	Exports	Imports	Trade Balance	Deficit Share (%)
2018	318.5	486.9	-168.4	19.3
2023	367.6	576.3	-208.7	19.6
2025	60.0	108.7	-48.7	16.1

Jan–Feb data
Source: US Census Bureau, compiled by BS Research Bureau

Political Outlook

• Despite economic turbulence, Trump remains defiant, tweeting: “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”
• Trump argues that tariffs are rebuilding the US industrial base, with flexibility for bilateral negotiations.

The global trade landscape is undergoing a dramatic shift, with retaliatory tariffs disrupting decades-old trade norms. While the US signals readiness to negotiate with allies, it remains locked in an escalating standoff with China and the EU, triggering widespread market uncertainty, recession fears, and inflation concerns.

BS

2. Trump Announces 90-Day Global Tariff Pause, Escalates Trade War with China

90-Day Tariff Pause for Most Countries

• U.S. President Donald Trump declared a 90-day pause on further tariff hikes for over 75 countries.
• Trump stated the pause was due to countries opting to negotiate instead of retaliate against the U.S.
• Existing tariffs remain at 10% flat rate globally, effective from Saturday.
• The pause represents a significant policy shift from the prior aggressive tariff strategy.

Sharp Escalation Against China

• Trump raised U.S. tariffs on Chinese imports to 125%, up from an already steep 104%.
• The announcement came just hours after the earlier hike took effect.
• Trump accused China of “lack of respect” for global markets and continuing to “rip off” the U.S.

China’s Retaliatory Measures

• China responded by increasing tariffs on U.S. imports to 84%.
• The situation between the U.S. and China has now escalated into a full-scale economic confrontation.

Global Market Reaction

• Wall Street markets rallied sharply following news of the global tariff pause.
• Markets had been experiencing days of intense volatility due to rising trade tensions.

TH

National Affairs

1. India Approves ₹63,000 Crore Rafale-M Deal for Navy Operations

Context:

The Cabinet Committee on Security (CCS), chaired by Prime Minister Narendra Modi, approved the purchase of 26 Rafale-Marine fighter jets from France. The deal, valued at nearly ₹63,000 crore, is aimed at bolstering the Indian Navy’s carrier-based fighter fleet. This is India’s largest-ever naval fighter acquisition.

Deal Composition and Timeline

• The contract includes 22 single-seater Rafale-M Rafale-M fighter Jetsjets for carrier operations and 4 twin-seater trainer jets, which are not carrier-compatible.
• Delivery will start 3.5 years after signing and is expected to be completed in 6.5 years.
• The agreement is expected to be formally signed later this month during the French Defence Minister’s visit to India.

Complementing Existing Capabilities

• The Rafale-M jets will be deployed on INS Vikrant, India’s first indigenously built aircraft carrier.
• They will complement the MiG-29K fighters currently operating on INS Vikramaditya, which has faced serviceability issues.
• The Indian Air Force already operates 36 Rafale aircraft, purchased under a ₹60,000 crore deal in 2016.

Background and Strategic Significance

• The Defence Acquisition Council (DAC) granted initial approval for the deal in July 2023.
• During the Varuna naval exercise, Indian Navy officials observed Rafale-M operations on France’s aircraft carrier Charles de Gaulle.
• The deal strengthens India’s carrier strike capabilities, vital for securing interests in the Indian Ocean Region.

Submarine Deal Still Pending

• A separate deal for three additional Scorpene-class submarines with France is still awaiting CCS clearance.
• These diesel-electric submarines are expected to be built in collaboration with Mazagon Dock Shipbuilders and Naval Group of France.

The Rafale-M deal represents a major leap in India’s maritime air power. Once finalized, it will significantly enhance the Navy’s ability to project force across strategic waters, aligning with India’s long-term defense and security objectives.

TH

2. Federalism and Constitutional Accountability

Context of the Judgment

• The Supreme Court has delivered a landmark ruling scrutinizing the conduct of Tamil Nadu Governor R.N. Ravi over his handling of 10 State Assembly Bills.
• This judgment is seen as a watershed moment in Centre-State relations, emphasizing India’s federal structure and constitutional integrity.
• The Bills, re-adopted by the Tamil Nadu Assembly, sought to shift the power of appointing Vice-Chancellors (V-Cs) from the Governor to the State government.

Supreme Court’s Key Findings

• The Court ruled that the Bills were deemed to have received assent.
• It called the Governor’s move to forward them to the President as “not bona fide”, “arbitrary”, “non est”, and “erroneous in law”.
• These statements serve as a direct censure of the Governor’s conduct, highlighting misuse of discretionary powers.

Strengthening Federal Governance

• The verdict sets clear timelines for Governors to act on State legislation, ending the practice of indefinite delays under the guise of scrutiny.
• It enforces greater transparency, accountability, and constitutional morality in the operations of Raj Bhavans.
• The ruling underscores that Governors must act as neutral constitutional heads, not as political agents of the Centre.

Immediate Consequences for Tamil Nadu

• With the legislation now valid, the Tamil Nadu government can proceed with appointments of V-Cs in 12 universities.
• These appointments must prioritize merit, integrity, and competence, especially in light of past corruption concerns in university administration.

Broader National Significance

• This is a precedent-setting case that reinforces the role of the judiciary in upholding federal values.
• It marks a shift toward cooperative federalism and seeks to restore dignity to the office of the Governor.
• The ruling is also a reminder that constitutional functionaries are accountable and cannot operate with impunity or political bias.

The Supreme Court’s decision is not just a judicial critique of a Governor’s overreach—it is a call to preserve the sanctity of India’s federal democracy. It demands that Governors uphold the spirit of the Constitution and reinforces the principle that State autonomy must be respected within the Union framework.

TH

3. New Aadhaar Law Aligned with Digital Personal Data Protection Act, 2023

Context:

• Union Minister Ashwini Vaishnaw has asked the UIDAI to draft a new Aadhaar law compatible with the Digital Personal Data Protection (DPDP) Act, 2023.
• The announcement was made during the Aadhaar Samvaad event, attended by UIDAI officials and ecosystem partners.

Background: Aadhaar and Privacy Law Evolution

• The current Aadhaar Act (2016) was created before India had a horizontal privacy framework applicable across all sectors.
• With the DPDP Act now in place, there’s a need to harmonize Aadhaar regulations to ensure legal consistency and data protection compliance.

Objectives of the Proposed Aadhaar Law Update

• Align Aadhaar data governance with the principles and penalties laid out in the DPDP Act.
• Ensure that public convenience, privacy, and digital trust are central to the updated law.
• Create a modern legal framework that reflects evolving digital infrastructure and citizen expectations.

DPDP Act Highlights

• Applies to government and private entities handling personal data.
• Imposes strict obligations for data protection, consent, and breach reporting.
• Penalties for non-compliance include fines for data leaks or misuse.

Next Steps

• Rules under the DPDP Act are in the final stage of consultation and are expected to be notified soon.
• UIDAI has been officially requested to begin formulating the revised Aadhaar Act.
• A revamped Aadhaar mobile app was unveiled and will be publicly released after testing.

Significance

• The move underscores India’s push towards a privacy-first digital ecosystem.
• A new Aadhaar law could enhance citizen trust, ensure data security, and streamline digital identity management in line with global standards.

TET

4. Cabinet Approves ₹1,600 Crore M-CADWM Scheme to Boost Irrigation Infrastructure

Scheme Overview

• The Union Cabinet has approved the Modernisation of Command Area Development and Water Management (M-CADWM) as a sub-scheme of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
• The scheme will be implemented during 2025–26 with a total initial outlay of ₹1,600 crore.

Primary Objectives

• Upgrade and modernise existing irrigation water supply systems in India.
• Ensure efficient last-mile connectivity of water from canals and other sources to farming plots.
• Improve water-use efficiency and promote climate-resilient agriculture.

Key Features

• Focused on small and marginal farmers, particularly those with small land-holdings.
• Incorporates advanced technologies including:
  • Supervisory Control and Data Acquisition (SCADA) systems
  • Internet of Things (IoT) for real-time water flow monitoring
• Encourages sustainable water distribution and precision irrigation techniques.

Implementation Model

• Pilot phase to be conducted across 78 designated sites, directly benefiting around 80,000 farmers.
• Emphasis on irrigation management transfer (IMT) — where local Water User Societies (WUS) will take over management responsibilities.

Expected Outcomes

• Increased efficiency in water delivery to farm gates.
• Reduction in water wastage and improved crop yield.
• Advancement in digital agriculture infrastructure.
• Strengthening of community-based irrigation governance.

TH

5. Palna Scheme

Context:

• The Palna Scheme, restructured from the National Creche Scheme in 2022, is part of the Samarthya sub-scheme under Mission Shakti.
• It addresses the increasing demand for quality day-care services due to the rise in nuclear families and women’s workforce participation.
• The scheme aims to formalize childcare, previously viewed as unpaid domestic work, thereby aligning with SDG 8: Decent Work and Economic Growth.

Objectives of the Palna Scheme

• Provide safe and quality crèche facilities for children aged 6 months to 6 years.
• Support nutritional, health, and cognitive development.
• Monitor and enforce compliance with Section 11A of the Maternity Benefit Act (mandatory workplace crèches).
• Encourage mothers’ participation in gainful employment by removing unpaid childcare burdens.

Funding Structure

Region	Centre’s Share	State/UT Share
General States	60%	40%
NE & Special Category States	90%	10%
UTs with Legislature	60%	40%
UTs without Legislature	100%	0%

Integrated Package of Services

In convergence with Mission Poshan 2.0, Palna offers:

• Day care including sleeping facilities
• Early stimulation for children below 3 years
• Pre-school education for children aged 3–6
• Locally sourced supplementary nutrition
• Health check-ups, growth monitoring, and immunizations

Types of Crèches

• Standalone Crèches: One Creche Worker + One Creche Helper
• Anganwadi-cum-Creches (AWCCs): Existing AWW & Helper + One Creche Worker + One Creche Helper

Crèche Infrastructure & Implementation

• Crèche Operation: 7.5 hours/day, 26 days/month
• Location Preference: Within 0.5–1 km of residential/workplace areas
• Child Capacity: Max 25 children per crèche
• Supervision: Anganwadi Workers oversee hygiene, safety, feeding, toilet training, and health services

Worker Honorarium Structure

Type of Crèche	Creche Worker	Creche Helper
Standalone	₹6,500	₹3,250
AWCC	₹5,500	₹3,000

Note: States/UTs may top-up these honoraria from their own budgets.

Progress & Coverage (as of March 2025)

• AWCCs Approved: 11,395 across 34 States/UTs
• AWCCs Operational: 1,761 with 28,783 beneficiaries
• Standalone Crèches Operational: 1,284 with 23,368 beneficiaries
• 2024-25 Target: Establish 17,000 new AWCCs

Financial Allocation & Disbursement

Financial Year	Allocated (Cr)	Released (Cr)
2022-23	₹35	₹4.68
2023-24	₹85	₹64.15
2024-25	₹150.11	₹43.66*

As of December 19, 2024

Legislative & Inter-Ministerial Support

• Complies with: Labour Laws, Maternity Benefit Act
• Interlinked with: ICDS, Poshan 2.0, Health Departments
• Digital Monitoring: States/UTs to develop portals to track Maternity Act compliance by establishments

PIB

Science & Tech

1. Japan Built the World’s First 3D-Printed Train Station

Context:

In a global first, West Japan Railway Company (JR West) constructed a 3D-printed train station in just six hours, revolutionizing rural infrastructure development. The new station, named Hatsushima, replaces a traditional wooden building that served the area for over 75 years.

Why It Matters

• Japan is grappling with population decline and labor shortages, especially in rural regions.
• Maintaining railway services in underused stations has become a significant challenge for operators like JR West.
• 3D printing offers a cost-effective, time-efficient, and scalable alternative to conventional construction.

Construction Highlights

• Location: Arida city, Wakayama Prefecture (population ~25,000), near Osaka and Nara.
• Serves: ~530 daily passengers on a single rail line.
• Construction timeline:
  • Began after the last train at 11:57 p.m.
  • Completed before the first morning train at 5:45 a.m.
• Method:
  • Components were 3D-printed off-site using a special mortar.
  • Assembled overnight on-site by workers.
• Design:
  • Measures about 100 square feet.
  • Minimalistic white finish, featuring mandarin oranges and scabbardfish—local specialties of Arida.

Future Use and Implications

• Opening Date: Full interior work to be completed by July.
• JR West sees this as a blueprint for rural stations—efficient, sustainable, and adaptable for areas with declining ridership.
• Aims to preserve essential public services with minimal workforce involvement using advanced technology.

The Indian Express

Banking/Finance

1. RBI’s Monetary Policy Committee (MPC) Meeting April 2025

Context:

The Reserve Bank of India (RBI) cut the repo rate by 25 basis points, bringing it to 6%, marking the second consecutive rate cut in 2025. The policy stance has shifted to “accommodative”, signaling room for further easing to support economic growth.

GDP and Inflation Forecasts Revised

• GDP growth for FY26 has been lowered to 6.5% from the earlier 6.7%, reflecting caution amid global uncertainties.
• Inflation is now projected at 4%, down from 4.2%, indicating stronger price stability and a more comfortable policy space for the RBI.

Quick Rate Transmission in Focus

• RBI Governor Sanjay Malhotra emphasized the importance of quick transmission of the repo rate cut through banks to stimulate borrowing and investment.
• However, lending rates tied to the marginal cost of funds may take time to adjust.

Sectoral Impact: Real Estate and Auto Eye Revival

• Industries like real estate and automotive are expected to benefit from lower interest rates, with hopes of a demand revival following months of subdued performance.
• The rate cut acts as a strategic booster for credit-intensive sectors.

RBI Moves to Regulate Gold-Backed Loans

• The RBI issued a draft circular on gold loan norms, aiming to:
  • Standardize gold loan regulations across financial institutions.
  • Improve transparency, conduct standards, and borrower protection.
  • Address concerns over lending practices and collateral handling.

Market Response: Bond Yields Tumble

• The bond market responded positively with yields falling to a 3-year low, as investors priced in a dovish outlook and lower borrowing costs.

Stability Assurance: IndusInd Incident Clarified

• The Governor reassured the public, labeling the recent IndusInd Bank issue as an “incident, not a systemic failure,” maintaining confidence in the financial system’s resilience.

The RBI’s April 2025 policy review reinforces its pivot toward growth, with calibrated rate cuts and improved inflation control. While challenges remain, especially from global uncertainties, the central bank’s approach balances monetary easing with financial prudence. Key sectors now await faster rate transmission to reignite domestic demand and credit flow in the months ahead.

2. RBI Governor Reassures Resilience of India’s Financial System

Context:

Reserve Bank of India (RBI) Governor Sanjay Malhotra emphasized that recent banking irregularities — including incidents at IndusInd Bank and New India Cooperative Bank should not be seen as systemic failures, but as isolated episodes within a broad and robust financial ecosystem.

Highlights from the Post-Policy Press Conference

Incidents Are Isolated, Not Failures

• RBI Governor Malhotra stated: “These are not total failures — they are episodes that can happen in a financial system with many players.”
• Emphasis was placed on multi-layered safeguards in banks: business units, compliance mechanisms, and audit frameworks all work in tandem to reduce the frequency and impact of such events.

Financial System Remains Resilient

• Malhotra assured that India’s financial system — spanning cooperative banks, NBFCs, and SCBs — remains safe, secure, and robust.
• The RBI has strong systems for early detection of non-compliance and risk, and undertakes both preemptive and corrective actions where necessary.

IndusInd Bank Derivative Discrepancy

• IndusInd reported internal discrepancies in its derivative portfolio, with an expected net worth hit of 2.35%.
• The bank has appointed PwC for independent validation and hired an external firm to conduct a comprehensive forensic review.
• The RBI has urged depositors not to act on speculation, assuring them that the bank’s financial health is stable and under close supervision.

New India Cooperative Bank Governance Concerns

• Due to fund misappropriation allegations, the RBI has superseded the bank’s board for 12 months and appointed an administrator.
• Business restrictions have been imposed, but Malhotra reinforced that such targeted interventions are meant to protect depositors and uphold systemic integrity.

Regulatory Tools in Place

• RBI continues to strengthen its toolkit of regulations, supervisory oversight, and enforcement actions to reduce the recurrence of such episodes.
• The governor emphasized the need for institutional cooperation and internal controls across the sector to improve risk governance and operational transparency.

While isolated disruptions may occur, the overall financial system in India is fundamentally resilient, with proactive steps from the RBI to mitigate risks and safeguard consumer interests.

BS

3. RBI Draft Guidelines Aim to Harmonize Gold Loan Practices Across Financial Entities

Context:

The Reserve Bank of India (RBI) released draft guidelines to regulate and harmonize gold loan practices across banks and non-banking financial companies (NBFCs). The proposed norms introduce a uniform 75% loan-to-value (LTV) cap, emphasize risk control measures, and aim to improve transparency in lending operations.

Market Impact

Following the announcement, gold loan NBFC stocks reacted negatively:

• Muthoot Finance: ↓ 7%
• IIFL Finance: ↓ 2.5%
• Manappuram Finance: ↓ 1.86%

Key Provisions in the Draft Guidelines:

LTV Ratio Capped at 75%

• Applies to all gold loans, including those for consumption purposes and all loans issued by NBFCs.
• The LTV cap is to be maintained throughout the tenor of the loan.

Prohibited Collateral Types

• No loans can be granted against:
  • Primary gold or silver
  • Financial assets backed by gold/silver, such as ETFs or mutual fund units
  • Doubtful ownership of gold
  • Repledged gold collateral

Risk & Credit Policy Requirements

• Institutions must include:
  • Single borrower limits
  • Sectoral exposure limits
  • Mechanisms for verifying end-use of funds
  • Standards for gold valuation and purity
  • LTV monitoring protocols

Portfolio Ceiling for Gold-Backed Loans

• Lenders must set a ceiling on total gold loan exposure as a percentage of total loans.
• This limit must be periodically reviewed, considering:
  • Granularity of borrowers
  • Collection and recovery performance
  • Auction results of collateral
  • Economic capital and concentration risks

Borrower-Specific Limits

• A loan ceiling per borrower must be established, with clear differentiation between:
  • Income-generating loans
  • Consumption-oriented loans
• These limits should be applied fairly and non-discriminatorily.

The RBI’s proposed guidelines signal a move toward greater regulatory coherence and responsible lending in the gold loan segment. While NBFCs may face near-term headwinds, the long-term outcome could strengthen sectoral discipline and risk governance.

BS

4. RBI Shifts to Accommodative Policy Stance with Second Consecutive Rate Cut in FY26

Context:

The Reserve Bank of India (RBI) has officially entered an easy-money regime by slashing the repo rate by 25 basis points to 6%, marking its second rate cut in the current cycle. More significant than the rate cut is the RBI’s shift in monetary policy stance from ‘neutral’ to ‘accommodative’, signaling further easing ahead.

Key Highlights:

1. Monetary Policy Decisions

• Repo Rate Cut: Reduced by 25 bps to 6%
• Policy Stance: Changed from neutral to accommodative
• MPC Vote: Unanimous decision by all six members

Market Expectations and Impact

• Terminal Repo Rate Forecast Revised:
  • Previously: 5.5%–5.75%
  • Now: 5.25%–5.5%
• Anticipated Rate Cuts in FY26: 50–75 bps cumulative
• 10-Year Bond Yield: Closed at 6.44% (down from 6.47% despite initial spike)
• Rupee Movement: Closed at ₹86.68/USD, down from ₹86.25
• Equity Reaction: Stock indices and bank stocks fell post-announcement

Growth & Inflation Outlook

• Real GDP Growth Projection for FY26:
  • Revised down to 6.5%
  • Quarterly breakdown: Q1: 6.5%, Q2: 6.7%, Q3: 6.6%, Q4: 6.3%
• CPI-Based Inflation Estimate:
  • FY26 projection: 4%
  • Quarterly trajectory: Q1: 3.6%, Q2: 3.9%, Q3: 3.8%

Real Interest Rate Advantage

• With repo rate at 6% and inflation around 4%, real interest rate exceeds 2%, creating ample room for further easing.

RBI’s Strategic Priorities

• Primary Objective: Support non-inflationary growth
• Secondary Concern: Exchange rate stability takes a back seat
• Liquidity Outlook: RBI to maintain surplus liquidity to aid transmission

Implications for Banks & Markets

• Banking Sector Challenges:
  • Margin pressure due to falling loan rates (linked to repo or T-bill yields)
  • Limited flexibility to cut deposit rates accordingly
  • Net Interest Margins (NIMs) expected to narrow
• Stock Market Sentiment:
  • Weighed down by official recognition of growth slowdown
  • Analysts consider RBI’s 6.5% growth projection overly optimistic

Contextual Comparison

• Historical Reference: Last shift from ‘neutral’ to ‘accommodative’ occurred in June 2019
• October 2024 Stance: Changed from withdrawal of accommodation to neutral, laying the groundwork for current easing

The RBI has clearly signaled a pro-growth monetary strategy backed by a benign inflation outlook. While this bodes well for borrowing costs and economic recovery, it poses challenges for banks and investors. The Indian central bank seems prepared to let the rupee weaken modestly if that’s the price for stimulating domestic growth.

BS

5. Bond Yields Drop to 3-Year Low as RBI’s Dovish Stance Spurs Rate Cut Expectations

Context:

Following the Reserve Bank of India’s recent monetary policy announcement, government bond yields declined sharply, hitting their lowest levels since December 2021. Market participants interpreted the accommodative stance and RBI Governor’s remarks as strong signals for future rate cuts, boosting demand for bonds.

Key Developments:

Benchmark Bond Yield Movement

• 10-Year Government Bond Yield:
  • Settled at 6.44% on Wednesday
  • Down from 6.48% in the previous session
  • Lowest yield level since December 20, 2021
• Pre-policy Yield Level: Rose to 6.51% ahead of the announcement
• Market Interpretation: Both the 25 bps rate cut and stance shift were already priced in, but dovish guidance triggered additional buying

RBI’s Policy Communication

• RBI Governor Sanjay Malhotra emphasized:
  • Surplus liquidity would be maintained
  • Accommodative stance means either a pause or further rate cuts
  • Clarified: Policy stance is tied to repo rate expectations, not liquidity directly
• Monetary Tools Explained:
  • Liquidity is a separate operational mechanism, used to enhance policy rate transmission, not necessarily tied to stance changes

Market Reactions & Forecast

• Anshul Chandak, Head of Treasury, RBL Bank:
  • Interpreted the messaging as a precursor to deeper rate cuts
  • Predicts 10-year bond yield could drop to 6.25% in the next 4–5 months

Rupee Weakens Further

• INR/USD Exchange Rate:
  • Closed at ₹86.70, down from ₹86.26
  • Marked the third consecutive session of depreciation
  • Fell by 0.4% on the day
• Drivers: Expectations of lower interest rates and surplus liquidity weighed on the rupee

Broader Implications

• Bond Prices Rise: Inverse relation with yields drove up bond demand
• Currency Depreciation: Highlights reduced RBI focus on rupee defense in favor of growth support
• Investor Sentiment: Bond traders optimistic; currency markets more cautious

The RBI’s dovish policy tone has created a clear market expectation for continued rate cuts in FY26. With benchmark bond yields falling to multi-year lows, and the rupee weakening, the central bank appears firmly focused on stimulating growth, even if it means tolerating modest currency depreciation. Market experts anticipate further softening of yields, positioning India firmly in a pro-growth, easy money regime.

BS

6. RBI Considers Shift from Call Rate to Collateral-Based Benchmark in Liquidity Framework

Context:

The Reserve Bank of India (RBI) is currently re-evaluating its liquidity management framework, specifically the use of the Weighted Average Call Rate (WACR) as the key indicator for policy transmission. Governor Sanjay Malhotra indicated that alternatives such as a collateral-based benchmark may be considered.

Key Highlights:

RBI Reviewing Policy Transmission Anchor

• Current Benchmark:
  • The RBI currently uses the Weighted Average Call Rate (WACR) as the operating target for monetary policy transmission.
• Potential Shift:
  • The central bank is exploring whether to continue with WACR or transition to a new benchmark, such as a secured rate, based on broader market consultations.

Call Market Volumes Declining

• Deputy Governor T. Rabi Sankar noted that interbank call money market volumes have dropped significantly.
• In contrast, collateralized segments like Triparty Repo (TREPS) and Market Repo dominate overnight volumes, comprising 98% of overnight market activity.

Possible Shift to Secured Overnight Rupee Rate (SORR)

• The RBI may replace the current uncollateralised WACR with the Secured Overnight Rupee Rate (SORR).
• This shift aligns with recommendations from the Mumbai Inter-Bank Offer Rate (MIBOR) Committee.
• The move to a collateral-based benchmark would reflect the market’s transition toward secured lending instruments.

Surplus Liquidity Calibration Target

• The RBI aims to maintain a surplus liquidity level close to 1% of Net Demand and Time Liabilities (NDTL)—estimated at around ₹2.7 trillion.
• Governor Malhotra clarified that this target is flexible: “If more [liquidity] is required, we will do more. If less is required, we will do less.”

Recent Liquidity Trends

• As of Tuesday, net liquidity in the banking system stood at a surplus of ₹1.32 trillion.
• However, in December, the system experienced a liquidity deficit due to:
  • Advance tax outflows
  • Capital flight
  • Currency leakage

Implications for the Market

• Transition to a new benchmark could affect how banks price short-term borrowing.
• It may also improve monetary policy transmission by aligning the RBI’s target with dominant, secured market segments.
• Participants are closely watching for changes that may influence interest rate structures and liquidity operations.

The RBI’s review of its liquidity management framework and potential shift from WACR to a secured rate benchmark reflects an evolving money market structure. A formal announcement is expected after stakeholder consultations conclude.

BS

7. ADB Cuts India’s FY26 GDP Forecast to 6.7% Amid Rising Global Trade Tensions

Context:

The Asian Development Bank (ADB), in its Asia Development Outlook April 2025, has lowered India’s GDP growth forecast for FY26 to 6.7% from the earlier projection of 7%, citing rising global trade tensions, US tariffs, and geopolitical uncertainties.

Key Forecasts:

Fiscal Year	GDP Growth (%)	Inflation (%)
FY2025–26	6.7	4.3
FY2026–27	6.8	4.0

Major Drivers of the Revision

Global Trade Risks

• The US administration’s new tariff measures (announced on April 2) are a major downside risk.
• ADB warns of reduced trade and investment flows and financial market volatility due to escalating trade barriers.
• The full impact of these tariffs, if implemented and retaliated against, could negatively affect India, as well as regional peers like China and Southeast Asian nations.

Domestic Investment and Financial Market Concerns

• Global economic uncertainty may delay or disrupt investment project completions in India.
• Rising concerns over capital flows and market stability also pose a threat.

Food Inflation and Climate Impact

• ADB flags the agriculture sector’s vulnerability to extreme weather events, which may fuel food inflation.
• A demand-supply mismatch in food production could lead to higher inflationary expectations unless mitigated by structural reforms.

Mitigating Factors

• India’s exports to the US form only about 2% of GDP, limiting direct trade exposure.
• Ongoing India-US trade deal negotiations could help alleviate some of the tariff impacts.
• Supportive monetary and fiscal policies, along with rising rural incomes and moderating inflation, are seen as positive domestic factors for growth.

Additional Insight from Moody’s:

• Moody’s Ratings notes that US tariffs will disrupt the ‘China+1’ strategy, impacting global supply chains.
• However, India may benefit in the long term from trade diversions and companies relocating to tap into India’s large market and cost advantages.
• Such structural shifts will unfold gradually over several years.

Regional Outlook

• Developing Asia-Pacific economies are now projected to grow at 4.9% in 2025, slightly lower than the 5.0% growth in 2024.
• ADB signals further downward revisions likely in July, given the post-April 2 trade developments.

BS

8. SEBI Forms High-Level Committee to Review Conflict of Interest Among Officials

Context:

• The Securities and Exchange Board of India (SEBI) has established a high-level panel to review and address conflict of interest concerns involving its board members and employees.
• The move aligns with the decision taken at SEBI’s recent board meeting, reflecting a push for greater transparency and ethical governance.

Chairperson and Committee Composition

• Chairperson: Pratyush Sinha, former Chief Vigilance Commissioner
• Members include:
  • Uday Kotak, Founder of Kotak Mahindra Bank
  • R. Narayanaswamy, former professor at IIM Bangalore
  • Other retired bureaucrats with expertise in ethics and public administration

Key Focus Areas

• Review existing conflict-of-interest policies
• Recommend robust checks and balances for:
  • SEBI board members
  • Employees and senior officials
• Enhance institutional integrity and public confidence in the regulator

Broader Implications

• Marks a significant step toward strengthening governance within India’s top market watchdog
• Expected to bring in stringent disclosures, recusal norms, and ethical accountability

Mint

9. Indian Bank Cuts Repo-Linked Lending Rate by 35 Basis Points to 8.70%

Context:

Indian Bank has reduced its Repo-Linked Benchmark Lending Rate (RBLR) from 9.05% to 8.70%, effective April 11. The 0.35% (35 basis points) rate cut aligns with recent RBI repo rate adjustments, according to the bank’s statement.

Impact on Borrowers

• The rate cut will benefit borrowers with loans linked to RBLR, including:
  • Home loans
  • Business loans
• Borrowers could see a reduction in their EMIs, depending on the terms and reset periods of their loans.

Context and Market Relevance

• This move reflects a pass-through of RBI’s policy easing, aimed at boosting credit growth.
• The decision enhances loan affordability, potentially supporting sectors like housing and MSMEs.

Customer Advisory

• Borrowers are encouraged to review their loan agreements to check when the new rates will apply.
• Customers may also consider refinancing options to take full advantage of the lower rate environment.

TH

10. RBI Proposes Market-Based Securitisation of Stressed Assets to Ease Lenders’ Burden

Context:

• The Reserve Bank of India (RBI) has proposed a market-driven framework for securitisation of stressed assets, aiming to reduce the Non-Performing Assets (NPAs) burden on lenders.
• This new route would work alongside the existing Asset Reconstruction Company (ARC) mechanism governed under the SARFAESI Act, 2002.

Mechanism Explained

• Stressed assets would be bundled into tradable securities and sold to a Special Purpose Entity (SPE) for cash.
• A Resolution Manager (RM) appointed by the SPE will manage the securitised pool of stressed assets.
• The RBI’s draft guidelines also include:
  • Valuation methods
  • Capital requirements for investors
  • Mandatory disclosures

Ineligible Asset Classes

• The following will not be eligible for securitisation:
  • Re-securitised exposures
  • Synthetic securitisation
  • Farm credit
  • Education loans
  • Fraudulent accounts
  • Wilful defaults

Market Implications

• This initiative aims to broaden investor participation, enhance risk distribution, and strengthen market-based resolution of distressed assets.
• It offers an alternative exit channel for lenders, helping improve balance sheet health and credit availability in the banking sector.

BS

11. RBI Drafts Inclusive Co-Lending Framework for All Regulated Entities

Context:

• The Reserve Bank of India (RBI) has issued a draft framework to expand co-lending arrangements beyond banks and NBFCs, aiming to include all regulated entities.
• The new framework allows co-lending for all types of loans, not just priority sector lending, unlocking a wider credit delivery channel.

Key Highlights of the Proposed Framework

• Existing Guidelines: Currently apply only to co-lending between banks and NBFCs, restricted to priority sector lending.
• Proposed Expansion: Co-lending will be permitted for any loan category—both priority and non-priority—between:
  • Commercial Banks
  • Non-Banking Financial Companies (NBFCs)
• Excluded Entities: Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and Local Area Banks will not be eligible under this framework.

Operational Model

• A Co-Lending Arrangement (CLA) enables two financial institutions to jointly disburse loans based on a pre-agreed lending proportion.
• Banks involved in priority sector co-lending can still claim PSL credit for their share.

Regulatory Disclosure Requirements

• Participating institutions must clearly disclose:
  • Targeted borrower segments
  • Loan terms and pricing
  • Internal exposure limits for borrowers
  • Risk-sharing agreements

Expected Impact

• Enhances financial inclusion and credit flow to underserved segments.
• Encourages collaborative lending practices while maintaining transparency and risk discipline.
• Supports portfolio diversification and capital efficiency for lenders.

12. Deadline for Vivad se Vishwas Scheme 2024

Context:

• The Central Board of Direct Taxes (CBDT) has set April 30, 2025, as the last date to file declarations under the Direct Tax Vivad se Vishwas (DTVSV) Scheme 2024.
• The scheme aims to resolve pending income-tax disputes across appellate authorities including the Supreme Court and high courts, as of July 22, 2024.

Scheme Details and Filing Process

• Operational since: October 1, 2024.
• Filing mode: Electronic only.
• Form required: Form 1, available on the Income Tax Department’s e-filing portal.
• Key requirement: A separate declaration is to be filed for each pending dispute.

Background and Response

• DTVSV 2024 is the second edition of the tax dispute resolution scheme.
• The first edition was applicable to appeals pending as of January 31, 2020.
• Participation data:
  • 2024 edition: 40,597 assessees (as of February 18)
  • 2020 edition: 139,384 assessees
• The response to the second edition has been relatively lukewarm, raising concerns about awareness and uptake.

Implications for Taxpayers

• Taxpayers with pending appeals are encouraged to opt into the scheme to resolve disputes efficiently.
• The scheme provides a cost-effective and litigation-free method to settle outstanding tax issues.
• Timely declaration by April 30 ensures eligibility for resolution under this one-time scheme.

TET

13. Bandhan Bank Launches Elite Plus Account for HNIs, Bank of Baroda Unveils High-Yield Deposit Scheme

Bandhan Bank’s Elite Plus Savings Account for HNIs

• Target Audience: High Net-Worth Individuals (HNIs)
• Key Features:
  • Unlimited monthly cash deposits
  • Free RTGS, NEFT, and IMPS transactions
  • Enhanced debit card insurance coverage
  • Personal accident cover up to ₹15 lakh
• Objective: Cater to premium customers seeking a comprehensive, high-value banking experience with exclusive privileges.

Bank of Baroda’s bob Square Drive Deposit Scheme

• Scheme Type: Retail Term Deposit
• Tenure: 444 days
• Interest Rates:
  • General Customers: 7.15% per annum
  • Senior Citizens: Additional 50 bps (7.65%)
  • Super Senior Citizens (80+ years): 7.75% per annum
  • Non-Callable Deposits: Up to 7.80% per annum
• Deposit Limit: Applicable on retail term deposits below ₹3 crore
• Effective Date: April 7, 2025
• Purpose: Offer competitive returns to retail investors amid stable interest rate conditions.

Strategic Implications

• Both initiatives aim to enhance customer engagement and attract deposits by providing customized solutions to different demographics:
  • Bandhan Bank targets HNIs seeking premium banking services
  • Bank of Baroda caters to conservative investors, especially senior citizens, with attractive fixed-income options

BS

14. Razorpay Launches Turbo UPI Plugin to Revolutionize In-App Payment Experience

Overview of the Launch

• Collaborators: Razorpay, NPCI BHIM Services Limited (NBSL), and Axis Bank
• Platform: BHIM Vega
• Objective: To streamline UPI payments and enhance user experience by removing redirection-related friction during transactions.

Key Features of Turbo UPI Plugin

• In-App Payment Capability:
  • Enables businesses to accept UPI payments directly within their apps.
  • Eliminates the need to redirect users to third-party UPI apps, significantly reducing drop-offs.
• Enhanced User Experience:
  • Speeds up the payment process
  • Improves transaction reliability and user satisfaction
• Reduced Transaction Failures:
  • Uses optimized payment routing via BHIM Vega infrastructure
  • If a primary bank fails, transactions are auto-routed through alternate banking channels, ensuring high success rates.

Technical & Strategic Advantages

• No Redirection = Fewer Cart Abandonments
• Future-Ready Payment Infrastructure: Seamless, scalable, and reliable
• Enhanced Bank Partnerships: Axis Bank’s involvement ensures broader reach and improved system resilience

Impact on India’s Digital Payment Ecosystem

• Boosts UPI Adoption: By simplifying and securing the payment experience
• Supports Government’s Cashless India Vision
• Ideal for E-commerce & App-Based Services: Particularly useful for sectors with high transaction volumes and app-first interfaces

15. NPST Partners with Central Bank of India to Strengthen Offline UPI Payment Ecosystem

Context:

• Partnership Announcement:
  • NPST (Network People Services Technologies) has signed a multi-year contract with Central Bank of India to expand and enhance offline digital payments across the country.
• Platform Involved:
  • Deployment of Qynx, NPST’s Payment Platform-as-a-Service (PPaaS), as the technological foundation for this expansion.

Key Objectives and Benefits

• Boost Offline Digital Transactions:
  • Focus on semi-urban and rural areas with limited or no internet access
  • Promotes financial inclusion and supports the Reserve Bank of India’s vision of a less-cash economy
• Use of QR-Based SoundBox Devices:
  • Integration with Qynx Merchant Switch
  • Facilitates real-time UPI payments, automated reconciliation, and centralized merchant management
• CASA Growth Strategy:
  • Supports Current Account and Savings Account (CASA) penetration by digitizing merchant payment acceptance

Nationwide Initiative & Market Share

• Selection Through Evaluation:
  NPST secured a 40% market share in a national project to scale offline UPI payments
  • Recognized for its technical strength, compliance framework, and past performance
• Merchant-Focused Tools:
  • Offers mobile onboarding, device tracking, and 24/7 merchant support
  • Aims to improve merchant activation, retention, and transaction engagement

Impact and Scale

• Operational Capacity:
  • System designed to serve 100+ clients
  • Processes 60+ million transactions daily
• Central Bank of India’s Reach:
  • Over 4,600 branches to serve as deployment and support centers for the solution

NPST’s Financial & Operational Performance

• FY24 Revenue: ₹130.08 crore
• Growth Rate: 216% YoY increase, showcasing robust business expansion and operational success

Economy

1. Loans Set to Get Cheaper as RBI Cuts Repo Rate by 25 bps

Context:

• The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points from 6.25% to 6%, marking its second consecutive cut in 2025.
• The monetary policy stance has shifted from ‘neutral’ to ‘accommodative’, indicating a bias towards further rate cuts or holding steady, depending on global and domestic conditions.

Key Announcements by RBI Governor

• GDP Forecast (FY26): Cut by 20 basis points to 6.5%.
• Inflation Forecast (FY26): Revised down to 4%, citing lower food prices and global crude oil at $60 per barrel.
• Monetary Stance Explained:
  • Malhotra clarified that an accommodative stance implies only two possible policy actions ahead: a rate cut or status quo—barring any major shocks.
• Liquidity Support: RBI to maintain surplus liquidity equivalent to 1% of bank deposits (approx. ₹2.3 lakh crore), up from the current ₹1.5 lakh crore.

Implications for Borrowers and the Economy

• Cheaper Loans:
  • Banks are expected to transmit lower rates to consumers, leading to reduced EMIs on home loans, car loans, and personal loans.
• Growth Focused Policy:
  • The central bank emphasized non-inflationary growth driven by balanced demand-supply, macroeconomic stability, and accommodative credit conditions.
• Global Impact:
  • Trade tensions and tariffs remain key concerns. India’s exports face moderate impact, but the uncertainties have led to a more cautious growth outlook.

Why the Repo Rate Cut Matters

• The repo rate is the benchmark interest rate at which RBI lends to commercial banks.
• A cut generally lowers lending rates across the banking system, spurring credit growth, consumption, and investment—vital for economic momentum amid global slowdowns.

Inflation Outlook

• Inflationary pressures have eased due to:
  • Decline in global oil prices
  • Lower food inflation
• However, the RBI remains vigilant against volatility in food supply, especially amid risks from heatwaves and monsoon uncertainties.

Strategic Takeaway

• With two consecutive rate cuts and a dovish policy stance, the RBI is aiming to stimulate domestic demand, while keeping inflation within target.
• This sets a positive tone for rate-sensitive sectors like real estate, auto, and consumer durables.

TOI

Agriculture

1. India-Nepal Sign MoU to Boost Agricultural Cooperation and Sustainability

Context:

• During the 3rd BIMSTEC Agriculture Ministerial Meeting, India and Nepal signed a Memorandum of Understanding (MoU) to deepen bilateral collaboration in the field of agriculture.
• The agreement was signed by Shivraj Singh Chouhan, India’s Union Minister of Agriculture & Farmers Welfare and Rural Development, and Ram Nath Adhikari, Nepal’s Union Minister of Agriculture and Livestock Development.

Purpose of the MoU

The MoU aims to

• Strengthen bilateral ties in the agricultural sector
• Foster mutual growth and agricultural technological exchange
• Enhance collaboration in key priority areas for both nations

Key Focus Areas

The agreement outlines cooperation in the following domains:

• Enhancing Crop Productivity: Sharing best practices and technology to increase yields
• Post-Harvest Management: Improving storage, preservation, and value-addition systems
• Agri-Marketing Systems: Strengthening farmer access to markets for better price realization
• Climate Resilience: Promoting sustainable and climate-smart agricultural practices
• Food Security & Livelihoods: Supporting rural development and farmer welfare

Significance

• The MoU reinforces the shared commitment of India and Nepal toward:
  • Achieving food security
  • Uplifting farmer livelihoods
  • Building climate-resilient agricultural ecosystems
• It acts as a catalyst for innovation, policy exchange, and regional agricultural cooperation under the BIMSTEC framework.

Future Outlook

• The agreement will pave the way for technical exchange programs, joint research initiatives, and capacity building in the agriculture sector.
• It marks a renewed effort to synergize agricultural development goals of both nations in alignment with regional and global sustainability targets.

Facts To Remember

1. India’s exports surge to record $820 billion in 2024-25 despite global challenges

India’s goods and services exports have crossed a record 820 billion US dollars in the financial year 2024-25, despite economic uncertainties in global markets. 

2. Global Technology Summit 2025 to begin in New Delhi with theme ‘Sambhavna’

The 9th edition of the Global Technology Summit (GTS) 2025 will be held in New Delhi from today. The theme for this year’s Summit is Sambhavna – meaning possibilities- and will explore how emerging technologies can drive inclusive growth, strengthen digital governance, and deepen cross-border partnerships.

3. New Aadhaar law to align with Digital Personal Data Protection Act 2023: IT Minister Ashwini Vaishnaw

Electronics and Information Technology Minister Ashwini Vaishnaw has said that the new Aadhaar law will be harmonised with the Digital Personal Data Protection Act 2023, keeping user interest at the centre.

4. India, UK reaffirm commitment to boost ties in financial services, FinTech, digital economy

India and the UK have reaffirmed their commitment to continue collaboration in the financial services sector, FinTech and the digital economy.

5. Shooting World Cup: Rudrankksh Patil, Arya Borse bag air rifle mixed team silver

In Shooting, India’s Arya Borse and Rudrankksh Patil clinched the silver medal in the mixed 10-meter air rifle event at the ISSF World Cup 2025 in Buenos Aires, Argentina, yesterday. The Indian duo lost 17-9 in the final to China’s Wang Zifei and Song Buhan.

6. Indian shuttlers Sindhu, Rajawat & George advance to pre-quarterfinals at Badminton Asia Championships

In badminton, Indian shuttlers PV Sindhu, Priyanshu Rajawat, and Kiran George sailed into the singles pre-quarterfinals of the Badminton Asia Championships in Ningbo, China.