2nd August 2025 Current Affairs UPSC – India–UK FTA & More

Catch the top UPSC current affairs for 2nd August 2025 – including India–UK Free Trade Agreement’s digital sovereignty concerns, the economic value of mangrove conservation, and India–Maldives relations under the Neighbourhood First policy.

1. India–UK Free Trade Agreement (FTA) and Digital Sovereignty

 Why in News?

• A recent expert analysis has raised concerns that India failed to safeguard its digital sovereignty during the ongoing India–UK FTA negotiations.

• Key issues such as source code access, data localization, and digital infrastructure security were not given sufficient attention.

• The FTA is part of India’s strategy to expand international trade, but experts warn of long-term digital and strategic consequences.

 What is Digital Sovereignty?

• Digital Sovereignty refers to a nation’s ability to control:

  • Its digital infrastructure

  • Data flows

  • Technology regulations

  • Cybersecurity standards

• It is a core component of national security, economic self-reliance, and policy independence in the digital era.

 Key Concerns and Challenges with the India–UK FTA:

1. Absence of Source Code Access

• India reportedly agreed to forego the right to examine the source code of imported digital products and services.

• This could allow foreign software (even in sensitive sectors like defense, health, and infrastructure) to carry embedded threats, surveillance tools, or malware.

• Source code is vital to understand how a product operates and to ensure it doesn’t compromise national interests.

2. Strategic Erosion of Digital Autonomy

• The deal may bind India to a Western-dominated digital governance model, reducing policy flexibility.

• It may set a precedent for similar digital trade concessions in future FTAs with other countries.

3. Institutional Unpreparedness

• Indian trade negotiators lacked experts in digital policy and emerging tech, leading to reactive decision-making.

• The absence of a comprehensive national digital trade strategy meant India was not fully prepared for complex negotiations.

4. Risk of Digital Colonization

• By allowing unrestricted foreign access to digital markets, India risks ceding control of its digital value chain — from data to AI-driven algorithms.

• This mirrors the colonial economic model, where India provided raw materials (now data) while foreign powers controlled the value-added processes.

 Benefits Claimed in Traditional Sectors:

• The FTA aims to:

  • Double bilateral trade to $120 billion by 2030

  • Remove tariffs on 90% of goods

• Key focus areas include:

  • Agriculture

  • Textiles

  • Labor-intensive manufacturing

• These sectors benefit from greater market access to the UK, potentially increasing exports and employment.

 Global Context and Recent Developments:

• Globally, countries are becoming cautious about how digital trade affects sovereignty.

• The United States has begun rethinking its digital trade policy, especially regarding source code disclosure.

• The UK–India FTA includes sensitive digital products, like infrastructure-related software, making India’s concessions even more significant.

Implication for India:

For National Security:

• The lack of source code access may expose Indian digital systems to cyberattacks, surveillance, and systemic vulnerabilities.

For Digital Policy:

• India’s ability to implement data localization, algorithm transparency, and technology standards may be compromised.

For Strategic Autonomy:

• Once signed, FTA provisions become difficult to reverse, locking India into rules that favor foreign tech giants.

For Global Trade Leadership:

• India risks weakening its negotiating position in future FTAs with the EU, US, and other partners by setting a soft precedent.

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 Way Forward for India:

1. Formulate a Comprehensive Digital Industrial Policy

• India needs a clear roadmap to guide trade negotiations in line with national tech priorities like:

  • AI development

  • Semiconductors

  • Cybersecurity

  • Digital infrastructure

2. Include Digital Sovereignty Experts in FTA Teams

• Trade delegations must include:

  • Cyber law experts

  • Digital economy strategists

  • AI ethicists

  • Data governance professionals

3. Ensure Transparency and Parliamentary Scrutiny

• All digital trade clauses must undergo:

  • Public debate

  • Parliamentary review

  • Informed civil society engagement

4. Maintain Regulatory Flexibility

• India must ensure:

  • Emergency override clauses for national interest

  • The ability to review, amend, or suspend digital clauses

  • Avoidance of blanket bans on data localization

5. Renegotiate Digital Clauses (if needed)

• Before ratifying the FTA, India can use bilateral diplomatic mechanisms to:

  • Revisit controversial provisions

  • Negotiate better terms on digital trade and security

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2. Mangrove Conservation and its Economic Value

 Why in the News?

Mangroves, despite their critical environmental and economic roles, remain underrepresented in climate and coastal policy. Experts now advocate reimagining mangroves as essential economic and ecological infrastructure rather than just biodiversity zones.

🔍 Key Points for Prelims & Mains

🧬 Ecological Importance

• Natural Shield: Serve as coastal buffers, reducing the impact of cyclones and storm surges. During Cyclone Amphan (2020), Odisha’s mangroves significantly minimized destruction.

• Blue Carbon Sinks: Store 3–4 times more carbon than terrestrial forests, playing a vital role in climate mitigation.

• Ecosystem Filters: Referred to as the “Kidneys of the Planet” for filtering pollutants, heavy metals, and excessive nutrients from coastal waters.

💰 Economic Value

• Sustains Livelihoods: Support fisheries, apiculture (honey collection), and ecotourism.

• Fishery Dependence: Gulf of Kutch mangroves contribute nearly 40% of Gujarat’s marine fish catch.

• Carbon Market Worth: In the Sundarbans, ecosystem services from carbon capture alone are valued at ₹462 million annually.

 Major Threats to Mangroves

 Natural Challenges

• Coastal erosion due to sea-level rise

• Frequent cyclones and shifting salinity patterns

 Human-Induced Pressures

• Aquaculture & Agriculture: Expansion leads to deforestation—responsible for nearly 40% of mangrove loss in India.

• Pollution: Industrial waste and urban encroachment

• Illegal Logging & Infrastructure Development

 Status in India (ISFR 2023)

• Total Mangrove Cover: 4,992 sq. km (0.15% of India’s geographical area)

• Top States:

  • West Bengal: 42.45% (Sundarbans)

  • Gujarat: 23.66%

  • Andaman & Nicobar Islands: 12.39%

 Global Recognition & Recent Initiatives

• Mangrove Breakthrough Coalition

• Blue Carbon Initiative: Encouraging restoration and carbon valuation of mangroves

• Global Funding: Increasing support for nature-based climate solutions

 Relevant Conventions and Treaties

• Ramsar Convention (1971): Recognizes wetlands, including mangroves, as critical ecosystems

• UNESCO’s Man and Biosphere Programme: Promotes sustainable management in biosphere reserves

• IUCN: Conducts global restoration and research efforts on mangroves

 Implications for India

• Coastal Protection: Acts as a defense line for India’s vulnerable coastal communities

• Economic Resilience: Boosts sustainable fisheries, local employment, and disaster reduction

• Policy Shift Needed: Treat mangroves as infrastructure assets, not just wildlife reserves

 Way Forward

🔭 Technological Tools

• Use satellites, drones, and AI for precise mapping and monitoring mangrove health.

🧑‍🤝‍🧑 Community-Led Conservation

• Engage local people in restoration through alternative livelihoods like:

  • Beekeeping

  • Mangrove tourism

🧪 Citizen Science

• Promote initiatives like Mangrove Mitras (Friends of Mangroves) to crowdsource data and involve youth.

🏛️ Government Programs

• MISTHI (2023): National initiative to expand mangrove areas across Indian coasts.

• CRZ Rules: Protect mangrove zones by restricting industrial activity, dumping, and land reclamation.

 Prelims Pointers & Facts

• MISTHI: Stands for Mangrove Initiative for Shoreline Habitats & Tangible Incomes

• Mangrove Loss: 40% in India due to aquaculture

• CRZ Rules: Govern protection and sustainable use of coastal ecosystems including mangroves

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3. India–Maldives Relations: Strategic Reset under “Neighbourhood First” Policy

📰 Why in News?

Prime Minister Narendra Modi’s recent visit to the Maldives marked a significant turning point in bilateral relations, signaling a full diplomatic revival following tensions that arose from President Mohamed Muizzu’s “India Out” campaign. This visit reaffirmed India’s commitment to its Neighbourhood First policy and addressed growing strategic concerns in the Indian Ocean Region (IOR), particularly China’s expanding presence.

🔍 Key Points for Prelims & Mains

🤝 Historical and Cultural Foundations

• India and the Maldives share centuries-old ties rooted in ethnic, linguistic, religious, and trade relations.

• India was among the first countries to recognize Maldivian independence in 1965.

• Bilateral ties have traditionally been cordial, multi-dimensional, and strategically significant.

🌐 Geopolitical Importance

• The Maldives’ strategic location in the Indian Ocean is vital for India’s maritime security, sea-lane safety, and regional influence.

• It forms a critical node in countering China’s “String of Pearls” strategy across South Asia.

💥 Past Tensions: The “India Out” Campaign

• President Mohamed Muizzu’s electoral rhetoric centered around the removal of Indian military personnel from Maldivian territory.

• This strained ties post-2023 and led to public backlash on both sides, including the viral “Boycott Maldives” movement in India.

🤝 Recent Diplomatic Reset

• President Muizzu’s state visit to India, followed by PM Modi’s reciprocal visit to the Maldives, signaled a renewed diplomatic engagement.

• These visits reaffirm India’s Neighbourhood First approach and a shared interest in regional cooperation.

💰 Economic and Financial Commitments

• New Line of Credit: India extended $565 million to support Maldivian infrastructure and development projects.

• Debt Relief: A 40% reduction in the Maldives’ annual debt servicing on previous Indian loans was announced.

📈 Trade, Investment & Digital Integration

• FTA Negotiations: India and the Maldives began discussions on a bilateral Free Trade Agreement.

• Sectoral MoUs Signed:

  • Fisheries

  • Pharmaceuticals

  • Meteorology

  • Digital Solutions

• Digital Payment Agreement: A new rupee–rufiyaa payment system was launched to ease cross-border trade and tourism.

🛡️ Strategic & Security Cooperation

• India reaffirmed its commitment to maritime security in the IOR under its SAGAR (Security and Growth for All in the Region) vision.

• Continued support for the India–Sri Lanka–Maldives trilateral security dialogue, vital for regional stability.

🌍 Global & Regional Context

• India’s re-engagement with the Maldives comes amid:

  • Rising Chinese investments in Maldivian infrastructure

  • Ongoing geopolitical tensions (e.g., Ukraine, Gaza, Indo-Pacific)

  • Regional instability involving Pakistan and Bangladesh

⚖️ Relevant Treaties and Frameworks

• UNCLOS (United Nations Convention on the Law of the Sea): Important for both nations in maritime law and resource sharing.

• SAGAR Vision: India’s strategic framework to enhance regional maritime cooperation and development.

 Strategic Importance for India

1. Maritime Security: Enhanced naval presence and surveillance capacity in the IOR.

2. Countering China: Offers a buffer against Chinese strategic encroachments in South Asia.

3. Blue Economy Development: Supports India’s initiatives in marine trade, climate resilience, and fisheries.

📉 Challenges Ahead

• Strategic Rivalry: China’s influence could reignite nationalist sentiments and anti-India rhetoric in Malé.

• Implementation Delays: Bureaucratic inefficiencies may hinder the rollout of joint projects.

• Public Perception: Restoring long-term trust will require consistent engagement and cultural outreach.

 Way Forward

🏛️ Institutionalize Dialogue

• Establish permanent bilateral platforms for defense, trade, and climate cooperation.

🌐 People-to-People Connectivity

• Promote student exchanges, cultural diplomacy, and tourism to rebuild mutual goodwill.

⚓ Joint Projects for Sustainability

• Focus on blue economy, climate resilience, and renewable energy.

• Improve regional connectivity via SAARC, IORA, and BIMSTEC.

🔐 Strengthen SAGAR Vision

• Consolidate India’s leadership in the Indian Ocean through proactive and inclusive regional policies.

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