UPSC Mains Current Affairs for 27 August 2025

India Suspends Cotton Import Duty Amid Production Decline

August 27, 2025

Cotton Import Duty Suspension India Latest News

Cotton, the key raw material for India’s textile industry and grown by nearly six million farmers, has seen a decline in domestic production.
To address this, the Centre has withdrawn the 11% import duty—first imposed in February 2021—until September 30, when the current cotton season ends.
The move follows a steep rise in cotton imports last year, despite the duty being in place.

Introduction and Withdrawal of Cotton Import Duty

The import duty was announced in the 2021 Budget, when the country was producing 350 lakh bales of cotton annually against the requirement of 335 lakh bales.
- While the country was exporting cotton, there were imports too and the duty was aimed at protecting the interest of cotton growers.
However, as the textile industry later faced a raw material shortage, the government exempted all varieties of cotton from the duty between April–September 2022, later extending it to October 2022.
- According to the Global Trade Research Initiative, cotton imports surged 107.4%, rising from $579.2 million in FY2023-2024 to $1.20 billion in FY2024-2025.

Implications of Cotton Import Duty Withdrawal

With this, the government has scrapped both the 5% basic customs duty and the 5% agriculture cess on cotton, enabling mills to source raw material at lower costs.
This move is expected to cool domestic cotton prices, benefitting everything from T-shirts to handloom sarees, and provide relief to SMEs in the textile sector.
The decision comes as Indian apparel exporters face steep global competition, burdened by nearly 60% tariffs in the US (compared to Bangladesh and Vietnam at 20%).
Rising cotton prices at home had further strained the industry, making the exemption a step taken in the “public interest”.

Implications

The withdrawal of cotton import duty will mainly benefit garment exporters, as around two lakh bales in transit will now enter duty-free.
This will give them a level-playing field internationally where high raw material costs earlier hampered competitiveness.
- Several global brands also expect Indian suppliers to use this imported cotton.
However, farmers have voiced concerns, arguing that the move discourages cotton cultivation.
Without adequate government support, they feel the decision undermines their interests, even as exporters and manufacturers stand to gain.

Current Status of Cotton Production and Imports in India

India’s domestic cotton production has fallen to 294 lakh bales in 2024-25, the lowest in 15 years, against a requirement of 318 lakh bales (including non-mill use).
Output this season is projected to be 20 lakh bales lower than last year.
To bridge the gap, imports may touch 40 lakh bales, mainly from Australia ($258.2 million), the U.S. ($234.1 million), Brazil ($180.8 million), and Egypt ($116.3 million).
Meanwhile, the Cotton Corporation of India (CCI) procured around 100 lakh bales at MSP, spending ₹37,500 crore, and has already sold 73 lakh bales in the market.
For the 2025-26 season starting October 1, the government has announced an 8% hike in MSP, with fresh supplies expected from northern States in October and central and western States after Deepavali.

Long-Term Solutions for Cotton Sector

The textile industry seeks policy stability in cotton procurement.
It suggests the government suspend import duty during the non-peak season (April–September), after farmers sell most of their produce, ensuring mills access affordable raw material without affecting growers.
Additionally, the industry has asked for a 5% interest subvention on working capital to help mills, especially MSMEs, purchase cotton during the peak season.
With sufficient funds, mills could cover their cotton needs, reducing dependence on costly MSP operations by the government.

Source: TH | PIB | ToI

Cotton Import Duty Suspension India FAQs

Q1: Why did India suspend cotton import duty?

Ans: To address declining domestic production and rising textile industry costs, India withdrew the 11% import duty, enabling cheaper cotton sourcing for mills.

Q2: How much cotton is India producing in 2024-25?

Ans: Cotton output fell to 294 lakh bales, the lowest in 15 years, against the requirement of 318 lakh bales, forcing higher imports.

Q3: Which countries are the main cotton suppliers to India?

Ans: Major imports come from Australia, the U.S., Brazil, and Egypt, with imports estimated at 40 lakh bales this cotton season.

Q4: How does the duty suspension benefit exporters?

Ans: Exporters get cheaper raw material, creating a level playing field globally. It helps Indian garment makers compete despite high U.S. tariffs.

Q5: What long-term solutions does the industry seek?

Ans: The textile industry wants annual duty suspension during the non-peak season and 5% interest subvention on working capital for cotton procurement.

ISRO’s Air Drop Test Boosts Gaganyaan Mission Roadmap

August 27, 2025

ISRO’s Air Drop Test Latest News

ISRO successfully conducted its first Integrated Air Drop Test (IADT-1), marking a key step for the Gaganyaan human spaceflight mission.
A five-tonne dummy crew capsule was released from a helicopter to evaluate its parachute-based deceleration system for safe splashdown.
The test validated critical safety mechanisms needed to ensure astronaut survival during re-entry and landing.
While the first uncrewed mission is expected by late 2025, India’s first crewed spaceflight is planned for 2027.

Integrated Air Drop Test

An Integrated Air Drop Test (IADT) simulates the final phase of a spacecraft’s return to Earth by dropping it from an aircraft or helicopter.
This allows engineers to evaluate critical systems such as parachute deployment in abort scenarios, performance during partial parachute failure, and crew module safety during splashdown.
However, it cannot fully replicate actual re-entry conditions, since helicopters cannot reach sufficient altitudes.
To address this, ISRO conducts sub-orbital or orbital tests—such as the Test Vehicle Abort Mission (TV-D1) in October 2023—to validate the crew escape system and performance under real re-entry conditions.

Purpose of IADT-1

IADT-1 was conducted to evaluate the parachute-based deceleration system crucial for safely bringing back the Gaganyaan crew module after re-entry.
In this test, an uncrewed capsule was dropped from a helicopter at about 3 km altitude, with parachutes expected to deploy in a precise sequence.
The process simulated the final stages of a real mission, where the capsule is slowed first by atmospheric drag and heat shields, then by drogue parachutes, and finally by three large main parachutes.
The goal was to ensure the capsule reduced its speed to about 8 m/s before splashdown.

IADT-1 in the Gaganyaan Roadmap

In the broader roadmap, IADT-1 lies between TV-D1 (2023 abort test) and the G1 uncrewed mission (late 2025), forming part of a sequence of thousands of tests ISRO must complete before human flight.

Execution of the Air Drop Test

The air drop test simulated a launch pad abort scenario where astronauts would need emergency ejection.
A 4.8-tonne dummy crew module was dropped from 3 km altitude using a Chinook helicopter.
Once released, the onboard avionics autonomously triggered deceleration and deployed 10 parachutes, which slowed the module to a safe splashdown speed of about 8 m/s.
For comparison, parachutes in real re-entry missions typically deploy at around 150 m/s.
The test also confirmed the crew module’s orientation and recovery process during splashdown.

Current Status of the Gaganyaan Mission

The Gaganyaan mission aims to send Indian astronauts to low-earth orbit by 2027.
To achieve this, ISRO is conducting a series of rigorous tests to validate safety and mission systems.

Test Vehicle Missions

After the success of Test Vehicle Abort Mission-1 (TV-D1), ISRO is preparing TV-D2, scheduled for the third quarter of 2025.
This will simulate a more complex abort scenario and validate the crew escape system.

Uncrewed Demonstration Missions

The first uncrewed mission, Gaganyaan-1 (G-1), is planned for the fourth quarter of 2025.
It will test technology preparedness, using an unpressurised crew module without the Environment Control and Life Support System (ECLSS).
Two additional uncrewed missions, G-2 and G-3, are also scheduled for launch next year to further validate systems.

Hardware and Systems Preparedness

Crew module and service module structures have been manufactured.
Propulsion systems for the crew module, service module, and crew escape system have been tested.
The LVM3 rocket has been fully human-rated, incorporating redundancies for crew safety.
A Life Support System model has also been built.

Infrastructure and Facilities

Key facilities are complete: Orbital Module Preparation Facility, Gaganyaan Control Centre, crew training facility, and launch pad modifications.
A recovery plan for the crew module after splashdown has also been finalised.

India’s Long-Term Human Spaceflight Goals

The Gaganyaan mission is only the first step in India’s broader human spaceflight roadmap.
The government has set ambitious targets, including establishing the Bharatiya Antariksh Station (BAS) by 2035 and achieving an Indian crewed lunar landing by 2040.
These milestones will require repeated missions, long-duration stays in orbit, and advanced deep-space technologies.
Progress may face delays — for instance, IADT-1 was pushed from April 2024 to August 2025 — but each milestone strengthens India’s capabilities.
The upcoming TV-D2 mission will test the Crew Escape System in a complex abort scenario, while ISRO’s SpaDeX mission has already demonstrated in-orbit docking, a key technology for BAS, Chandrayaan-4, and future lunar missions.

Source: TH | IE

ISRO’s Air Drop Test FAQs

Q1: What is ISRO’s IADT-1?

Ans: ISRO’s IADT-1 tested the parachute-based deceleration system for the Gaganyaan crew module, simulating the final phase of re-entry and safe splashdown.

Q2: Why is the Air Drop Test important for Gaganyaan?

Ans: The test validates safety systems like parachute deployment, ensuring astronaut survival during abort scenarios or re-entry landings before the first crewed mission.

Q3: When will Gaganyaan’s first crewed mission take place?

Ans: ISRO aims to launch India’s first human spaceflight mission by 2027, after completing a series of uncrewed missions and rigorous safety system tests.

Q4: What role did the dummy crew module play in IADT-1?

Ans: A 4.8-tonne uncrewed module was dropped from 3 km by helicopter to test parachutes, orientation, and recovery systems, ensuring safe splashdown capability.

Q5: What are India’s long-term space goals after Gaganyaan?

Ans: India plans to establish Bharatiya Antariksh Station by 2035 and achieve a crewed lunar landing by 2040, building on Gaganyaan’s technologies and milestones.

Trump’s 50% Tariffs on Indian Exports: Impact on the Economy

August 27, 2025

Tariffs on Indian Exports Latest News

The US has imposed 50% tariffs on Indian exports effective August 27, 2025, hitting key sectors like textiles, gems, jewellery, and shrimps, raising concerns over a trade and investment slowdown.

Introduction

On August 27, 2025, the United States, under President Donald Trump, implemented steep 50% tariffs on Indian merchandise exports, significantly escalating trade tensions.
These tariffs, applied across a wide range of labour-intensive and low-margin products, mark one of the sharpest trade restrictions India has faced in recent years.
The move is expected to severely disrupt India’s export performance, particularly in sectors like textiles, gems and jewellery, shrimp, carpets, and furniture.
The rationale behind the additional tariffs lies in the US’s objections to India’s purchases of Russian oil and defence equipment, which the Trump administration cited as the basis for penalising India.
However, the implications of this decision stretch far beyond geopolitical concerns, threatening millions of jobs, export revenues, and investment momentum under India’s ambitious Production Linked Incentive (PLI) schemes.

Details of the US Tariffs

The new tariff regime effectively doubles existing duties, taking tariffs to over 60% in some categories.
Nearly 66% of Indian exports to the US, valued at around $59 billion in FY25, are now subject to the 50% tariff.
According to the Global Trade Research Initiative (GTRI), exports could plummet by as much as 40-45% in FY26, reducing shipments to the US from $87 billion in FY25 to $49.6 billion.
- Duty-free Exports (30%): Pharmaceuticals ($12.7 billion), electronics ($10.6 billion), and petroleum products remain exempt.
- Moderate Tariffs (4%): Auto parts will face 25% tariffs.
- Heavy Tariffs (66%): Apparel, textiles, gems and jewellery, shrimps, handicrafts, carpets, and furniture will face the brunt.

Sectoral Impact on India

The US is India’s largest export market, accounting for nearly 20% of total merchandise exports and about 2% of GDP.
Labour-intensive sectors with high US dependence are at maximum risk:
- Textiles & Apparel: Units in Tirupur, Noida, and Surat have already reported halts in production. With the US accounting for nearly 60% of home textiles exports and 50% of carpet exports, the fallout could be devastating.
- Gems & Jewellery: Exports worth over $10 billion to the US (30% of the industry’s total) face erosion, raising fears of widespread job losses.
- Shrimps: The US contributes nearly 48% of revenue for Indian shrimp exporters, making the marine sector highly vulnerable.
- Handicrafts & Furniture: Both industries, dependent on American demand, risk sharp revenue contractions.
According to industry estimates, export volumes from these affected sectors could plunge by up to 70%, leading to widespread unemployment, particularly for low-skilled workers.

Implications for India’s PLI Push and Capex Momentum

The timing of the US tariffs is particularly sensitive, as India is banking on the PLI scheme to boost manufacturing and exports in high-value sectors.
However, the tariffs could derail capital-intensive industries by deepening the private capex slowdown:
- Weak PLI Uptake in Key Sectors: Applications for advanced chemistry cells, solar PV modules, and drones have lagged due to high investment needs.
- Investor Caution: Tariff-related uncertainty has made firms wary of long-term commitments in export-dependent sectors.
- Crisil Analysis: Nearly 50% of planned industrial capex is exposed to global trade risks, including US tariffs and EU climate policies.
While lower capex-intensive sectors like food processing and pharmaceuticals under PLI have seen strong uptake, sectors like electronics, solar, and batteries face setbacks that could delay India’s manufacturing growth trajectory.

Macroeconomic and Geopolitical Dimensions

The US tariffs could cut India’s GDP growth down from 6.5% to 5.6%, according to trade experts.
With competitors like Vietnam, Bangladesh, and Cambodia benefiting from lower tariffs, India risks losing its competitive edge in critical export markets.
Geopolitically, the tariffs underline the fragile nature of India-US trade ties, where strategic convergence on security is increasingly clashing with protectionist economics.
Moreover, with Trump threatening 200% tariffs on pharmaceuticals unless companies localise production in the US, further disruptions cannot be ruled out.

Way Forward

Despite the grim outlook, India retains some advantages:
- Domestic Economy: With exports forming only 20% of GDP, India is less vulnerable compared to Vietnam (90%).
- Diversification Opportunities: Strengthening trade with the EU, ASEAN, Africa, and the Middle East can partially offset US losses.
- Policy Measures: Exporters are demanding duty drawback schemes, loan moratoriums, and fast-tracking of Free Trade Agreements (FTAs), especially with the EU, to cushion shocks.
Experts argue that India must also accelerate ease-of-doing-business reforms, tax rationalisation, and logistics infrastructure improvements to remain competitive globally.

Source : TH | IE

Tariffs on Indian Exports FAQs

Q1: Which Indian sectors are most affected by the new US tariffs?

Ans: Textiles, gems and jewellery, shrimps, carpets, handicrafts, and furniture face the steepest impact.

Q2: What percentage of Indian exports to the US remain duty-free?

Ans: Around 30% of exports, including pharmaceuticals, electronics, and petroleum products, are duty-free.

Q3: How will the tariffs affect India’s PLI scheme?

Ans: They could slow investment in capital-intensive PLI sectors like solar PV modules and advanced chemistry cells.

Q4: What is the estimated decline in India’s exports to the US due to the tariffs?

Ans: Exports could fall by 40-45% in FY26, dropping from $87 billion to $49.6 billion.

Q5: How can India mitigate the impact of the tariffs?

Ans: By diversifying export markets, expediting FTAs, providing industry support, and accelerating domestic reforms.