UPSC Current Affairs 8 September 2025: GST 2.0, FDI, India–China & Nicobar

UPSC Current Affairs 8 September 2025 are crucial for both Prelims and Mains preparation. Today’s updates cover GST 2.0 reforms empowering youth, India–China border disputes, FDI slowdown, the ecological crisis in Nicobar, ageing population challenges, health updates from Kerala, and new space navigation technology. These current affairs are fact-checked from PIB, PRS India, NITI Aayog, and UN reports, making them highly relevant for UPSC aspirants.

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1. The Making of an Ecological Disaster in the Nicobar

What’s the News?

The Great Nicobar Project, a mega infrastructure initiative worth ₹72,000 crore, aims to establish an International Container Transshipment Terminal, an International Airport, a township, and power plants in the Nicobar Islands. While it promises strategic and economic benefits, critics warn it may trigger massive ecological destruction, biodiversity loss, and displacement of tribal communities.

Key Points for UPSC (Mains & Prelims)

Great Nicobar Project – Components

• Mega Port (ICTT): Competing with Singapore & Colombo as a logistics hub.

• Greenfield Airport: Dual-use (civil + defense).

• Township Development: Housing for ~3.5 lakh people.

• Power Plants: Mix of gas & solar energy.

Ecological Importance

• Great Nicobar: UNESCO Biosphere Reserve.

• Home to:

  • Campbell Bay & Galathea National Parks.

  • Endangered species: Leatherback turtle, Nicobar megapode, dugong, saltwater crocodile.

  • Coral reefs, mangroves, and seagrass beds.

Tribal Rights & Constitutional Safeguards

• Indigenous Groups: Shompens (PVTG), Nicobarese.

• Protections:

  • Article 338-A: National Commission for Scheduled Tribes (NCST).

  • Article 371A: Special provisions for tribal rights.

  • Forest Rights Act, 2006: Requires Gram Sabha consent.

  • PESA Act, 1996: Mandates consultation with tribal councils.

Institutional References & Developments

Indian Institutions Involved

• NITI Aayog: Conceptualized and backs the project as part of India’s Blue Economy Vision.

• Andaman & Nicobar Administration: Nodal agency for project implementation.

• Ministry of Environment, Forest & Climate Change (MoEFCC): Granted environmental & forest clearances in 2022.

• National Green Tribunal (NGT): Reviewing petitions against the project.

• Supreme Court of India: Monitoring legal challenges related to environmental and tribal rights.

• National Commission for Scheduled Tribes (NCST): Expressed concerns over violations of tribal protections.

• Wildlife Institute of India (WII): Submitted Environmental Impact Assessment (EIA), though methodology criticized for ignoring ground realities.

International Institutions & Frameworks

• UNESCO: Declared Great Nicobar a Biosphere Reserve (2013).

• UNEP (United Nations Environment Programme): 2024 Report warned against large-scale coastal infrastructure in climate-vulnerable regions.

• UNCLOS (United Nations Convention on the Law of the Sea): Obligates India to conserve marine biodiversity.

• Convention on Biological Diversity (CBD, 1992): India must ensure development does not destroy critical habitats.

• UNDRIP (2007): Safeguards indigenous peoples’ rights to land and culture.

• Ramsar Convention (1971): Mangroves and wetlands at risk fall under India’s conservation obligations.

Disaster & Climate Risks

• Seismic Zone V: Highest earthquake risk zone in India.

• 2004 Tsunami: Substantial land subsidence in Nicobar.

• Recent Event: July 2025 earthquake (6.2 magnitude) near Great Nicobar.

• Climate Change: Rising sea levels, cyclones, and storm surges threaten large-scale infrastructure.

• IPCC AR6 Report: Identifies small islands as most climate-vulnerable ecosystems.

Strategic & Economic Significance

• Strengthens India’s maritime dominance in the Indo-Pacific.

• Counters reliance on Singapore & Colombo transshipment hubs.

• Enhances trade with ASEAN nations.

• Supports India’s “Security and Growth for All in the Region (SAGAR)” policy.

• Part of Blue Economy push under India’s Maritime Vision 2030.

Concerns & Criticisms

1. Ecological Impact

   • 78.5 lakh trees to be cut (MoEFCC data).

   • Risk to Galathea Bay—a nesting site for giant leatherback turtles.

   • WII experts warned compensatory afforestation cannot replicate 130-million-year-old rainforest ecosystems.

2. Tribal Rights

   • NCST reports ignored during clearance.

   • FRA (2006) compliance bypassed: Gram Sabha not consulted.

   • UNDRIP obligations overlooked → Shompens face cultural extinction.

3. Flawed Clearances

   • EIA methodology criticized by independent ecologists.

   • NGT hearings highlight suppression of dissenting scientific opinions.

4. Disaster Vulnerability

   • NDMA (National Disaster Management Authority) had earlier flagged tsunami/cyclone risks, yet project continues.

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2. A Complex Turn in India’s FDI Story

What’s the News?

India’s Foreign Direct Investment (FDI) inflows have slowed down in 2024–25, despite India being among the world’s fastest-growing economies. Global economic uncertainty, China+1 supply chain shifts, and domestic regulatory hurdles are reshaping India’s FDI story, raising questions about India’s ability to become a manufacturing hub under Make in India and Atmanirbhar Bharat.

FDI – Concept & Significance

• Definition: FDI refers to a long-term ownership stake by a foreign investor, company, or government in an Indian enterprise. Unlike portfolio flows, FDI is non-debt creating and involves managerial participation.

• Legal Basis: Governed under the Foreign Exchange Management Act (FEMA), 1999; monitored by DPIIT (Ministry of Commerce & Industry) and the RBI.

• Importance for India:

  • Provides capital inflows for growth.

  • Facilitates technology transfer & R&D.

  • Boosts exports and global value chain integration.

  • Creates jobs & skills.

  • Supports macroeconomic stability (forex reserves, balance of payments).

India’s FDI Trends (DPIIT Data 2025)

• FY 2021–22: $84 billion (record high).

• FY 2023–24: $71 billion (decline).

• Top Sources: Mauritius, Singapore, USA.

  • Mauritius & Singapore often linked to round-tripping via tax havens.

• Key Sectors Attracting FDI: IT services, fintech, manufacturing (auto, electronics), renewable energy, semiconductors.

• Outward FDI: Indian firms also investing abroad (e.g., Reliance, Adani, Tata in Africa, Middle East, SE Asia).

Policy Framework

• FDI Routes:

  • Automatic Route – No prior approval needed (100% in most sectors).

  • Government Route – Requires clearance (defense, insurance, telecom, media, space).

• Incentives:

  • Production Linked Incentive (PLI) schemes to attract electronics, semiconductors, EVs.

  • Ease of Doing Business reforms (digitized single-window clearances, GST).

• Bilateral Investment Treaties (BITs): India renegotiated its BIT model post-2016 after disputes with investors (e.g., Vodafone, Cairn arbitration cases).

Relevant Conventions & Treaties

• WTO TRIMS (Trade-Related Investment Measures): India’s FDI rules must comply with WTO disciplines.

• Bilateral Investment Treaties (BITs): Investor protection framework; India renegotiating BITs with EU, UK, Japan.

• Regional Agreements:

  • India-UAE CEPA (2022) → boost in investments.

  • Ongoing FTA talks with EU, UK → potential new FDI flows.

Way Forward – Strengthening India’s FDI Ecosystem

1. Policy Stability & Predictability

   • Avoid sudden retrospective taxation or abrupt regulatory shifts.

   • Strengthen investment protection treaties to reassure investors.

2. Boost Manufacturing FDI

   • Incentivize high-tech, green energy, EVs, semiconductors.

   • Ensure PLI schemes lead to durable value creation (exports + jobs).

3. Infrastructure & Logistics

   • Accelerate PM Gati Shakti and National Logistics Policy.

   • Reduce transport costs to match Vietnam & China.

4. Skilling & Industry 4.0 Readiness

   • Align Skill India & Digital India with Industry 4.0 and green economy needs.

   • Attract firms needing AI, robotics, and clean energy workers.

5. Diversify FDI Sources

   • Move away from tax-haven dependence.

   • Attract Japan, EU, South Korea, Middle East sovereign funds for industrial FDI.

6. Institutional Strengthening

   • DPIIT & Invest India: Streamline approvals and investor handholding.

   • Judicial Efficiency: Faster resolution of commercial disputes via arbitration and commercial courts.

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3. Greying with Grace: India’s Demographic Transition and Ageing Challenge

What’s the News?

India is undergoing a rapid demographic transition. While fertility rates are falling, life expectancy is rising, resulting in a growing elderly population (60+ years). Policymakers are debating how India can harness this shift—turning it into a demographic dividend rather than letting it become a demographic burden.

Key Points for UPSC

Population Projection (Census, UN World Population Prospects 2024, SRS 2023)

• Elderly Growth: India’s elderly population is expected to rise from 149 million in 2022 to 347 million by 2050.

• Share of Elderly: 10% (2022) → 20% (2050).

• Dependency Ratio: After 2035, the share of working-age population will decline, increasing the old-age dependency burden.

• Fertility Trends (SRS 2023):

  • Crude Birth Rate (CBR): Declined from 19.1 (2022) → 18.4 (2023).

  • Total Fertility Rate (TFR): India at 2.0, below replacement level (2.1).

  • 18 states/UTs already below replacement fertility.

  • Regional variation: Bihar (25.8 CBR) highest; Tamil Nadu (12.0) lowest.

• Regional Demographic Divide:

  • North-Central States → High fertility, large youth bulge.

  • Southern & Western States → Low fertility, faster ageing.

Economic & Social Concerns

• Rising pension liabilities and healthcare expenditure.

• Need for geriatric care, long-term social security, and age-friendly infrastructure.

• Elderly neglect, isolation, and financial insecurity remain social challenges.

Schemes and Institutional Mechanisms

• National Social Assistance Programme (NSAP) – pensions for elderly, widows, disabled.

• Rashtriya Vayoshri Yojana – free assistive devices for senior citizens.

• Pradhan Mantri Vaya Vandana Yojana – pension scheme for senior citizens.

• Draft National Policy on Senior Citizens (2023) – focuses on healthcare, digital literacy, financial security.

• Atal Pension Yojana – contributory pension scheme for informal sector workers.

• Institutions Involved:

  • National Commission on Population (NCP) – long-term demographic planning.

  • Ministry of Social Justice & Empowerment (MoSJE) – elderly welfare.

  • National Health Authority (NHA) – Ayushman Bharat coverage for elderly.

  • NITI Aayog – long-term policy framing for ageing and demographic dividend.

Global Experience & Context

• Japan & South Korea – shrinking workforces, high elderly ratios → lessons in elder care & robotics in healthcare.

• Europe – strong universal social security & pension systems.

• Nordic Countries – women’s workforce participation aided by flexible maternity policies, childcare, portable pensions.

• Estonia – leveraged digitalisation to boost productivity despite small population.

• WHO Report 2024 – ageing is a “global megatrend”, calling for investment in healthy ageing systems.

Relevant Conventions and Treaties

• Madrid International Plan of Action on Ageing (2002) – India is a signatory.

• UN Sustainable Development Goals (SDGs):

  • SDG 3 (Good Health and Well-being).

  • SDG 10 (Reduced Inequalities).

• Proposed UN Convention on Rights of Older Persons (under negotiation).

• UNFPA India Report 2023 – stresses need for balanced fertility, migration management, and elderly care.

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4. GST 2.0 Will Empower Young Indians

What’s the News?

The Government of India is preparing a major reform package under GST 2.0, focusing on simplification of tax slabs, compliance relief, and digital transparency. The move is expected to particularly empower young entrepreneurs, startups, and MSMEs, making India’s economy more youth-driven and globally competitive.

Key Points for UPSC

GST Evolution

• Introduced in July 2017, subsuming multiple indirect taxes like excise duty, VAT, and service tax.

• Current structure: 5 slabs – 0%, 5%, 12%, 18%, and 28%.

• Administered through the GST Council (Article 279A, a constitutional body).

Proposed GST 2.0 Reforms

• Slab Rationalisation: Moving towards a 3-tier system –

  • 5% (merit rate for essentials),

  • 18% (standard rate),

  • 40% (demerit goods like luxury/sin items).

• Exemptions for essentials: Life & health insurance, essential medicines, and healthcare.

• Support to Agriculture: Fertilisers and farm machinery rates cut (from 18% → 5%).

• Boost to Industry & Exports: Lower GST on labour-intensive sectors like textiles, handicrafts, leather, and MSMEs.

• Housing Sector: Cement tax reduced (28% → 18%) to encourage construction & affordable housing.

Institutional Reforms under GST 2.0

• GST Appellate Tribunal (GSTAT) – to resolve tax disputes efficiently.

• Biometric Aadhaar-based Registration – to curb fake invoicing and fraud.

• GSTN Upgradation – AI-driven analytics for compliance, fraud detection, and ease of filing.

• Provisional Input Tax Credit Funds – to ease working capital stress of small businesses.

Benefits for Youth, Startups & MSMEs

• Simplified compliance – quarterly returns, digital filing, single market access.

• Reduced costs – exemptions for healthcare, insurance, and essentials benefit young families.

• Boost to innovation – easier entry for young entrepreneurs into e-commerce, fintech, and manufacturing.

• Employment Generation – tax relief in labour-intensive sectors spurs job creation.

• Financial Inclusion – penetration of insurance and healthcare among young workers.

Recent Developments & Global Context

• India’s Startup Ecosystem (DPIIT 2025): Over 1.25 lakh startups registered; GST reforms to reduce litigation and improve ease of doing business.

• Digital Governance: GSTN’s use of AI-based compliance strengthens transparency and youth trust in taxation.

• Global Parallels:

  • Singapore & UAE – streamlined GST/VAT supported small businesses and startups.

  • OECD Recommendations (2024) – push for innovation-friendly, digital GST systems.

Relevant Conventions & International Linkages

• WTO Trade Facilitation Agreement (2017) – GST promotes a unified national market, aiding smoother trade.

• OECD BEPS Framework – ensures fairness in global taxation, relevant for India’s cross-border startups.

• UN SDG 8 (Decent Work & Economic Growth) – aligns with India’s startup-driven job creation and youth empowerment.

5. 32-Year-Old Man Contracts Rare Brain Infection in Kasaragod

What’s the News?

A 32-year-old man in Kasaragod, Kerala, has been diagnosed with a rare brain infection, suspected to be linked with a zoonotic or waterborne pathogen. The case has prompted public health surveillance, water testing, and district-level medical preparedness, once again highlighting the rising challenge of emerging infectious diseases in India.

Key Points for UPSC

Nature of the Infection

• Possible causes under investigation:

  • Naegleria fowleri (brain-eating amoeba) → enters through contaminated water.

  • Viral Encephalitis → often mosquito-borne.

  • Bacterial Meningitis → spreads via respiratory droplets or sanitation lapses.

• Transmission Links: Poor sanitation, contaminated water, urban flooding, or zoonotic carriers.

Public Health Risks

• High fatality rate if not detected early.

• Kerala has previously reported rare outbreaks of Nipah virus (2018, 2021, 2023) and amoebic meningitis, showing its vulnerability.

• Climate change & monsoon flooding exacerbate risks of waterborne and vector-borne infections.

Response Mechanism

• Kerala Health Department initiated:

  • Contact tracing of patient history.

  • Testing of local water sources.

  • Hospital preparedness in Kasaragod and nearby districts.

• The case is being monitored under the Integrated Disease Surveillance Programme (IDSP) and Indian Health Intelligence Platform (IHIP).

Recent Developments & Global Context

Indian Context

• Kerala has emerged as a hotspot for emerging infectious diseases due to its dense population, climate vulnerability, and wildlife–human interface.

• Urban flooding (as seen in 2018 Kerala floods) increases exposure to pathogens like Naegleria.

• Strengthening Indian Council of Medical Research (ICMR) labs and National Centre for Disease Control (NCDC) is crucial for rapid diagnosis.

Global Cases

• United States & Pakistan have reported Naegleria-linked brain infections in recent years, often linked to swimming pools and contaminated water.

• WHO’s 2024 Report flagged climate-linked infectious diseases as one of the top 10 global health threats.

• Growing One Health approach (human–animal–environment interaction) is being emphasized worldwide.

Relevant Conventions & Treaties

• International Health Regulations (IHR, 2005) – legally binds countries to report unusual outbreaks to WHO.

• One Health Approach (WHO–FAO–WOAH/OIE) – integrated framework for zoonotic and climate-sensitive infections.

• UN SDG 3 (Good Health & Well-Being) – target to reduce mortality from communicable diseases.

• Sendai Framework for Disaster Risk Reduction (2015–30) – stresses preparedness for health emergencies linked to climate disasters.

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