UPSC Mains Current Affairs for 10 June 2026

FCNR(B) Deposits – Can Special Incentives Revive NRI Dollar Inflows?

June 10, 2026

FCNR(B) Deposits Latest News

To strengthen foreign currency inflows and improve external sector liquidity, the RBI has introduced a special dispensation allowing banks to mobilise fresh FCNR(B) deposits with maturities of 3–5 years until September 2026.
Additionally, banks can swap these deposits with the RBI at concessional terms, effectively eliminating the cost of hedging foreign exchange risk.
Experts estimate that the move could potentially attract $50–70 billion in foreign capital, although its success will depend largely on the interest rates offered by banks.

What are FCNR(B) Deposits?

Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits are fixed-term deposits maintained by:
- Non-Resident Indians (NRIs)
- Overseas Citizens of India (OCIs)
- Persons of Indian Origin (PIOs)
Key features:
- Deposits are held in foreign currencies such as the US Dollar (USD), Pound Sterling (GBP), Euro (EUR), Japanese Yen (JPY), Australian Dollar (AUD), and Canadian Dollar (CAD).
- Such deposits protect depositors from exchange-rate fluctuations.
- Interest earned is exempt from income tax in India for eligible non-residents.
- Interest rates are linked to international benchmark rates.

Reasons Behind Introducing New Facility

Sharp decline in FCNR(B) inflows:
- FCNR(B) inflows fell by 86% in FY26, and fresh inflows dropped to $946 million from $7.1 billion in FY25.
- Outstanding FCNR(B) deposits stood at $33.8 billion at the end of March FY26.
- The decline reflects - expiry of earlier regulatory incentives, lower returns compared to overseas deposit options, and strong competition from US dollar deposits abroad.
RBI’s objective:
- To boost foreign currency inflows.
- Strengthen forex reserves and external sector resilience.
- Provide banks with a cheaper source of overseas funding.
- Enhance liquidity without significantly increasing borrowing costs.

Reasons for FCNR(B) Deposits Currently Being Less Attractive

Lower interest rates offered by Indian banks:
- For example, SBI offers 3.35% [3–4 years FCNR(B) rate], HDFC bank offers 3.65%, and ICICI bank offers 3.0%.
- In contrast, SBI offers about 6.3% on comparable domestic fixed deposits. HDFC and ICICI offer around 6.5% on rupee deposits.
Competition from overseas markets:
- US dollar deposits abroad provide higher returns.
- For example, Merrick bank offers ~4.2% annualised percentage yield (APY), Morgan Stanley offers ~4.3% APY, and SBI's US Certificate of Deposit (CD) offers ~3.85%.
- Therefore, unless Indian banks raise FCNR(B) rates by around 100 basis points (1%), NRIs may have little incentive to transfer funds to India.

Working of RBI’s New Swap Facility

Concessional hedging support: The RBI has allowed banks to swap FCNR(B) deposits with the central bank at concessional terms.
Mechanism:
- Banks sell US dollars to the RBI and simultaneously agree to buy them back at maturity.
- Swap transactions will occur at the same exchange rate in both legs.
- The swap is undertaken at par, removing exchange-rate risk.
Operational conditions:
- Facility available for deposits mobilised up to September 30, 2026.
- The swap window remains open until October 16, 2026.
- Banks may access the facility once every week.
- Minimum transaction size: $1 million.
- Settlement is based on the FBIL Reference Rate.
Significance: The arrangement transfers most of the hedging burden from banks to the RBI, reducing costs and enabling banks to offer more competitive FCNR(B) rates without hurting profitability.

Additional Regulatory Relaxations

To encourage mobilisation of foreign currency deposits, RBI has also exempted these deposits from:
- Cash Reserve Ratio (CRR): Portion of deposits banks must maintain with RBI as cash reserves.
- Statutory Liquidity Ratio (SLR): Portion of deposits maintained in liquid assets such as cash, gold, or government securities.
These exemptions improve banks’ deployable resources and lower the cost of raising FCNR(B) funds.

Trends in NRI Deposits During FY26

Overall NRI deposit flows: Total NRI deposit inflows declined to $14.41 billion from $16.16 billion in FY25.
NRI deposits comprise: FCNR(B) deposits, Non-Resident External (NRE) accounts, and Non-Resident Ordinary (NRO) accounts.
Shift towards rupee deposits:
- Despite the fall in FCNR(B) inflows, NRIs increasingly preferred rupee-denominated deposits.
- NRE deposits: Outstanding balances increased by $7.94 billion. Total outstanding reached $98.56 billion.
- NRO deposits: Increased by $5.53 billion. Outstanding balances reached $33.33 billion.
- Consequently, total outstanding NRI deposits rose marginally from $164.68 billion to $165.65 billion.

Conclusion

The RBI’s FCNR(B) deposit scheme represents a targeted external-sector intervention aimed at attracting foreign currency resources and strengthening financial stability.
The success of the initiative will ultimately depend on whether lenders can offer sufficiently attractive returns to compete with global dollar deposit markets and revive NRI participation.

Source: IE

FCNR(B) Deposits FAQs

Q1: What is the primary objective of the RBI's special FCNR(B) deposit dispensation?

Ans: To attract foreign currency inflows, strengthen external sector stability, and augment banks' overseas funding sources.

Q2: How does the RBI's FCNR(B) swap facility reduce the cost of mobilising foreign currency deposits for banks?

Ans: By undertaking swaps at concessional terms and absorbing most of the foreign exchange hedging cost.

Q3: Why have FCNR(B) deposit inflows declined sharply despite regulatory support from the RBI?

Ans: Due to lower interest rates offered by Indian banks compared to higher returns available on US dollar deposits abroad.

Q4: What trend in NRI deposit preferences was observed in FY26?

Ans: NRIs increasingly preferred rupee-denominated NRE and NRO deposits over FCNR(B) deposits.

Q5: How do CRR and SLR exemptions on FCNR(B) deposits benefit Indian banks?

Ans: They reduce regulatory costs and increase deployable funds available for lending and investment.

West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters

June 10, 2026

Port Congestion and Opportunistic Pricing Latest News

The ongoing US-Iran conflict and near-closure of the Strait of Hormuz has created severe logistical disruption for Indian trade.
India's top export promotion body, the Federation of Indian Export Organisations (FIEO), has written to the ministries of Ports & Shipping and Commerce & Industry flagging two serious problems:
- opportunistic pricing by foreign shipping lines and non-transparent detention and
- demurrage charges by port authorities.
The crisis has hit India's western ports — JNPT, Kandla, and Mundra — particularly hard.

Understanding the Key Terms

Detention charges – These are fees levied on exporters or importers when a shipping container is kept beyond the allowed free time outside the port — for example, at a factory or warehouse — before being returned to the shipping line.
Demurrage charges – These are fees for keeping a container inside the port terminal beyond the permitted free period.
War Risk Surcharge (WRS) is an additional freight charge levied by shipping lines when vessels pass through conflict zones — reflecting the higher insurance and operational risk.
When these charges are applied non-transparently, inconsistently, or retroactively, they become a serious burden on exporters — especially during a crisis when they are already dealing with rising freight rates and port delays.

How the West Asia Crisis Triggered the Problem

The chain of events is straightforward. The near-closure of the Strait of Hormuz — through which a large share of India's trade with West Asia passes — disrupted shipping routes in March and April 2026.
West Asia-bound containers that could not be delivered were diverted and temporarily stored at Indian western ports, primarily JNPT (Jawaharlal Nehru Port Trust).
When the Iran-US ceasefire was announced in April 2026, these stranded shipments began flowing back into the system simultaneously.
The sudden influx overwhelmed port capacity. JNPT, Kandla, and Mundra — which together form India's biggest container gateway — became severely congested.
Container evacuation slowed, backlogs piled up, and costs began rising sharply.
As of June 6, 2026, Mundra Port congestion continues to persist, with the Central Warehousing Corporation (CWC) warning traders of delays in container evacuation, rail transit, and onward dispatch.
CWC also noted that container loading is being done based on operational accessibility rather than the standard First-In-First-Out (FIFO) basis — adding unpredictability for exporters.

The Problem of Opportunistic Pricing

The Directorate General of Shipping (DGS) had issued an advisory, asking all stakeholders to "refrain from predatory, non-transparent and opportunistic pricing practices, including levy of exorbitant charges."
However, FIEO's letter to the government stated bluntly that this advisory is not being followed on the ground.
Exporters continue to report:
- Unilateral and non-transparent imposition of detention and demurrage charges.
- War Risk Surcharge being applied inconsistently — with different shipping lines using different cut-off dates
- WRS being levied even on cargo already discharged before the conflict began
- Charges for basic port services like lift-on/lift-off having gone up several times

The Transparency Problem

A particularly damaging issue is the format of invoices from foreign shipping lines.
Many lines are merging WRS within the overall ocean freight rather than showing it as a separate line item.
This prevents exporters from claiming relief under the government's RELIEF support framework being implemented by ECGC (Export Credit Guarantee Corporation of India).
FIEO has requested a uniform and transparent cut-off date for WRS applicability across all shipping lines, and standardised invoice formats that show WRS separately.

The Labour Shortage Problem

Adding to port congestion is an acute shortage of trailer drivers at JNPT. This has seriously impeded the movement of import containers from terminals to Container Freight Stations (CFS).
The Shipping Ministry confirmed there has been no strike, but acknowledged the driver shortage has caused delays.

What Exporters and Industry Are Demanding

The industry's demands are clear and practical. As per them, during a crisis, relief measures should be announced — not additional charges.
Also, more storage space is needed so that cargo can be unloaded and moved without accumulating detention charges due to port-side delays that are beyond exporters' control.
A single point of contact comprising the Road, Shipping, Commerce, and Customs ministries is needed to coordinate crisis response.
They called for making the entire port clearance system paperless to eliminate delays that compound during a crisis.

The Bigger Picture

This crisis exposes a structural vulnerability in India's export logistics — one that geopolitical disruptions can quickly turn into a financial crisis for exporters.
India's western ports are critically dependent on Gulf shipping routes. When those routes are disrupted, the entire export supply chain seizes up.
There are no domestic shipping lines of sufficient scale to provide an alternative. Foreign shipping lines — which dominate India's container trade — have little regulatory accountability during a crisis.
The DGS advisory has no enforcement mechanism.
The result is that Indian exporters — already facing high freight rates — also bear the cost of port congestion, arbitrary surcharges, and a system that has no single crisis management authority.

Source: IE

Port Congestion and Opportunistic Pricing FAQs

Q1: What is the significance of West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters?

Ans: West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters highlights how geopolitical tensions have disrupted shipping and increased export costs.

Q2: How did the West Asia crisis affect Indian ports?

Ans: West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters led to severe congestion at JNPT, Mundra, and Kandla due to disrupted shipping routes

Q3: What is meant by opportunistic pricing in this context?

Ans: In West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters, opportunistic pricing refers to arbitrary surcharges, detention fees, and non-transparent freight charges.

Q4: Why are exporters concerned about War Risk Surcharge (WRS)?

Ans: West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters has seen inconsistent application of WRS, increasing costs and reducing transparency for traders.

Q5: What reforms are exporters demanding?

Ans: West Asia Crisis: Port Congestion and Opportunistic Pricing Hit Indian Exporters has prompted demands for transparent pricing, paperless clearances, additional storage, and coordinated crisis management.

EC Rules on Unusual Election Symbols: Can a Cockroach Become a Poll Symbol?

June 10, 2026

EC Rules on Unusual Election Symbols Latest News

Following Chief Justice Surya Kant's controversial remark comparing some unemployed youth to "cockroaches", protesters and the satirical Cockroach Janta Party (CJP) have adopted the insect as a symbol of dissent.
While CJP is currently a youth pressure group and not a registered political party, its founder has not ruled out seeking registration in the future.
However, even if the group registers as a political party, the Election Commission is unlikely to allot the cockroach as an election symbol, as symbols must comply with specific EC guidelines regarding acceptability and public perception.

Election Symbols in India: What the Rules Say

Allocation of Election Symbols - The Election Commission (EC) allocates election symbols under the Election Symbols (Reservation and Allotment) Order, 1968. These symbols help voters identify parties and candidates on the ballot.
Reserved Symbols for Recognised Parties - Recognised national and state parties are allotted their exclusive reserved symbols. For example, the BJP uses the lotus, while the Congress uses the hand symbol.
Free Symbols for Others - Unrecognised political parties and independent candidates are allotted symbols from the EC's list of "free symbols". These are not permanently reserved for any party.
No Guaranteed Choice - Candidates and unrecognised parties may request a preferred symbol from the free-symbol list, but the Election Commission is not obligated to grant their choice.

What Symbols Are Allowed by the Election Commission

The Election Commission's list of free symbols includes a wide range of simple and easily identifiable images drawn from everyday life.
These cover categories such as fruits, vegetables, household appliances, farm tools, sports equipment, and food items.
Diverse Range of Free Symbols - The latest EC list, released in May 2025, contains 184 free symbols, including items such as air-conditioners, balloons, door bells, dustbins, frying pans, jackfruits, and grapes.
Everyday Objects and Food Items - The list also features common household objects like immersion rods, latches, mixers, toothbrushes, and TV remotes, along with various fruits, vegetables, cakes, and toffees to ensure easy voter recognition.

Can a New Political Party Choose Any Election Symbol

Free Symbols Are the Usual Option - In most cases, new or unrecognised political parties must choose from the Election Commission's approved list of free symbols, which contains over 100 options.
How Symbol Allotment Works - Parties can indicate their preferred symbols, but the final decision rests with the Election Commission.
If Multiple Parties Want the Same Symbol - When more than one party seeks the same symbol, allotment may be decided on a first-come-first-served basis or through a draw of lots.
EC Has the Final Say - Even if a party requests a particular symbol, the Election Commission can allot a different free symbol if the preferred one is unavailable.

Why a Cockroach Is Unlikely to Become an Election Symbol

EC's Ban on Animal Symbols - The Election Commission largely stopped allotting animals as election symbols in the 1990s following concerns raised by animal welfare activists about the misuse and mistreatment of animals during election campaigns.
Background to the Decision - The move was influenced by incidents such as the 1989 Tamil Nadu Assembly election, when roosters used as a party symbol were reportedly subjected to cruelty during campaign activities.
Existing Exceptions - Some parties that received animal symbols before the ban continue to retain them. The most prominent example is the Bahujan Samaj Party (BSP), which still uses the elephant as its reserved symbol.
Cockroach Symbol Unlikely - Given the Election Commission's long-standing policy against allotting animal symbols, a cockroach is unlikely to be approved as an election symbol for any new political party or candidate.

Source: IE | IT

EC Rules on Unusual Election Symbols FAQs

Q1: What are the EC Rules on Unusual Election Symbols?

Ans: EC Rules on Unusual Election Symbols govern how political parties and independent candidates are allotted election symbols under the Election Symbols Order, 1968.

Q2: Can a new political party choose any symbol it wants?

Ans: Under EC Rules on Unusual Election Symbols, new parties generally select from the Election Commission's approved list of free symbols, subject to availability.

Q3: Why are animal symbols rarely allotted today?

Ans: EC Rules on Unusual Election Symbols largely prohibit new animal symbols due to concerns about animal welfare and misuse during election campaigns.

Q4: How are free symbols allotted when multiple parties seek the same symbol?

Ans: According to EC Rules on Unusual Election Symbols, allotment may be decided through first-come-first-served principles or a draw of lots.

Q5: Why is a cockroach unlikely to become an election symbol?

Ans: EC Rules on Unusual Election Symbols and the Commission's long-standing policy against new animal symbols make approval of a cockroach symbol highly unlikely.

Fertiliser Subsidy Burden Set to Double Amid Global Supply Crunch

June 10, 2026

Fertiliser Subsidy Latest News

India's fertiliser subsidy burden is likely to double to nearly Rs. 3.4 lakh crore in 2026-27 due to surging global prices caused by the West Asia conflict and the closure of the Strait of Hormuz.

About Fertilisers and India's Dependence

Fertilisers are essential agricultural inputs that supply nutrients, primarily nitrogen (N), phosphorus (P), and potassium (K), to crops, supporting higher yields and food security. India's agriculture is heavily dependent on fertilisers, particularly:
- Urea: The most widely used nitrogen-based fertiliser, primarily used for crops like rice, wheat, and sugarcane.
- Di-Ammonium Phosphate (DAP): A phosphate-based fertiliser.
- Muriate of Potash (MOP): A potassium-based fertiliser.
- Nitrogen-Phosphorus-Potassium (NPK) Complex Fertilisers: Multi-nutrient fertilisers.

India is one of the largest importers of fertilisers in the world. Major exporters include China, Russia, Morocco and Gulf nations (Oman, Qatar, Saudi Arabia, UAE, Bahrain)
Before the West Asia war, the Gulf nations accounted for around 40% of India's urea imports.

Fertiliser Subsidy Regime in India

The Indian government heavily subsidises fertilisers to make them affordable for farmers and maintain food security. The subsidy system operates under two main frameworks:
Urea Subsidy
- Urea is sold at a fixed Maximum Retail Price (MRP) of around Rs. 268 per 45-kg bag.
- The difference between the production/import cost and the MRP is borne by the government as a subsidy.
Nutrient-Based Subsidy (NBS) Scheme
- Launched in April 2010 for non-urea fertilisers (DAP, MOP, complex fertilisers).
- The government provides a fixed subsidy per kg of nutrient content (N, P, K, and Sulphur).
- Manufacturers can fix the MRP based on market conditions.
Direct Benefit Transfer (DBT)
- Since 2018, fertiliser subsidy has been routed through the DBT mechanism.
- Sales are recorded through PoS (Point of Sale) machines at retail outlets.
- Subsidy is released to companies based on actual sales to farmers.

News Summary

According to top government sources, India's fertiliser subsidy burden is likely to reach Rs. 3.4 lakh crore in 2026-27, an almost 100% increase compared to the Budget estimate of Rs. 1.7 lakh crore.
The cost of a fertiliser sack has surged from around Rs. 2,900 post-COVID to around Rs. 4,500 now, while the government continues to sell it at a subsidised price of around Rs. 300 per sack.

Causes of the Surge

Global Supply Crunch
- The West Asia conflict and the closure of the Strait of Hormuz, a critical waterway, have caused massive disruptions:
- India's latest urea purchases were at a cost-plus-freight price of $935-$959 per tonne.
- This is more than double the year-ago figure of $410-$420 per tonne.
- Global suppliers, including China, are holding on to their stock due to the Iran war.
China's Export Ban
- In mid-March 2026, China banned the export of fertilisers to secure domestic supplies, removing a critical source of supply for India.

Shift to Russia and Alternative Sources

Given the supply crunch, the government is exploring alternative sources:
- India's urea imports from Russia rose to 13.99 LMT from 9.23 LMT.
- Imports from China surged to 21.24 LMT in the first 11 months of 2025-26 from just 0.99 LMT in all of 2024-25 (before the ban).
- The government is now planning to tap Russia to meet more of its import requirements.

Fiscal Implications

Subsidy Spending Trends
- 2024-25: Rs. 1.73 lakh crore on fertiliser subsidy.
- 2025-26 (Revised Estimate): Raised to Rs. 1.86 lakh crore from initial Rs. 1.68 lakh crore.
- 2025-26 (Actual): Rs. 2.11 lakh crore, Rs. 24,920 crore more than the revised estimate, 22% higher than 2024-25.
- 2026-27 (Budget Estimate): Rs. 1.71 lakh crore, likely to balloon to Rs. 3.4 lakh crore.
April 2026 Expenditure
- The Controller General of Accounts data shows the Centre spent Rs. 22,033 crore as subsidy in April 2026 for urea and nutrient-based fertilisers, roughly 13% of the full-year estimate in just one month.
Pressure on Fiscal Deficit
- The fiscal pressure from the fertiliser subsidy is compounded by:
- Rs. 1.23 lakh crore lost in revenue foregone due to the Rs. 10 per litre excise duty cut on fuel.
- Under-recoveries of public sector oil marketing companies (OMCs), earlier Rs. 1,000 crore a day, now around Rs. 650 crore.
- April 2026 fiscal deficit surged to a 26-month high of Rs. 3.62 lakh crore, accounting for 21.4% of the entire 2026-27 target.
The "3 Fs" Challenge
- Finance Minister Nirmala Sitharaman highlighted the "3 Fs" that require focus amid rupee pressure:
  - Fertiliser: heavily imported, surging prices.
  - Fuel: crude oil dependence, elevated global prices.
  - Foreign exchange to buy gold: a significant import bill.
- All three items must be paid for in foreign currency, putting pressure on the rupee.

Concerns Over Diversion

Current Stock Position
- Despite the price pressures, the government has stated that the overall stock position is "comfortable" for the kharif season:
- Kharif fertiliser requirement (2026): 383.9 LMT
- Current stocks: 197.56 LMT (51% of requirement)
- Usual stock level: About 33%, so current stocks are significantly higher
- Farmer purchases so far: 86.65 LMT (just under 23% of total requirement)
Government Response
- The government has instructed states to:
- Provide fertiliser based on the actual requirement plus a reasonable buffer.
- Strengthen monitoring at retail outlets.
- Use PoS data to track unusual purchase patterns.

Significance and Implications

For Farmers
- Continued subsidised access to fertilisers despite the global price surge.
- Risk of supply disruptions if imports are not secured.
- Need for soil health awareness and balanced fertiliser use.
For Government Finances
- Massive fiscal burden affecting other priorities.
- Pressure on fiscal deficit targets.
- Trade-offs with other welfare and capital expenditure.
For India's External Sector
- A higher import bill puts pressure on the current account deficit.
- Foreign exchange outflows are affecting the rupee.
- Need to diversify import sources.
For Agricultural Policy
- Long-term concerns about fertiliser subsidy sustainability.
- Need for promoting organic and natural farming.
- Importance of soil health management.
- Push for nano fertilisers and precision agriculture.

Source: IE | TH

Fertiliser Subsidy FAQs

Q1: What is the projected fertiliser subsidy burden for 2026-27?

Ans: The fertiliser subsidy burden is projected to nearly double to ₹3.4 lakh crore, compared to the Budget estimate of ₹1.7 lakh crore.

Q2: What is causing the surge in fertiliser prices?

Ans: The West Asia conflict, closure of the Strait of Hormuz, and China's ban on fertiliser exports have caused global supply disruptions and price surges.

Q3: What are the "3 Fs" mentioned by the Finance Minister?

Ans: The 3 Fs are Fertiliser, Fuel, and Foreign exchange to buy gold, all heavily import-dependent and paid for in foreign currency.

Q4: What is the current price of imported urea?

Ans: India's latest urea purchases were at $935-$959 per tonne, more than double the year-ago figure of $410-$420 per tonne.

Q5: Which countries are India's major fertiliser suppliers?

Ans: Major suppliers include China, Russia, Morocco, and Gulf nations like Oman, Qatar, Saudi Arabia, UAE, and Bahrain.