UPSC Mains Current Affairs for 25 July 2026

New Law on Exam Paper Leaks – Explained

July 25, 2026

Exam Paper Leaks Latest News

The Union Cabinet has approved a draft Bill to amend the Public Examinations (Prevention of Unfair Means) Act, 2024, introducing stricter punishments of up to 10 years in jail and Rs 10 crore in fines for exam paper leaks, along with time-bound trials and statutory fast-track courts.

The Public Examinations (Prevention of Unfair Means) Act, 2024

The Public Examinations (Prevention of Unfair Means) Act, 2024, is India's first dedicated national law aimed at curbing leaks, malpractices, and organised cheating in public examinations. It came into effect on June 21, 2024.
Coverage
- Union Public Service Commission (UPSC)
- Staff Selection Commission (SSC)
- Railway Recruitment Board (RRB)
- Institute of Banking Personnel Selection (IBPS)
- National Testing Agency (NTA)
Existing Punishments
- Section 10: Punishment for individuals resorting to unfair means: Imprisonment of 3 to 5 years and a fine up to Rs 10 lakh.
- Section 11: Punishment for organised crime: Imprisonment of 5 to 10 years and a fine of at least Rs 1 crore.
Limitations of the Existing Law
- Despite the existence of the 2024 Act, several challenges persisted:
  - Investigation and trial delays: Cases dragged on for years without resolution.
  - Absence of fast-track courts: No dedicated judicial infrastructure for speedy trials.
  - Limited deterrence: Existing punishments were seen as insufficient against organised networks.
  - Lack of statutory timelines: No prescribed time limits for probe and trial.

News Summary: Cabinet Approves Amendments

Following the announcement by Prime Minister Narendra Modi, the Union Cabinet has approved a draft Bill to amend the Public Examinations (Prevention of Unfair Means) Act, 2024.
The Bill is expected to be introduced in Parliament shortly.

Key Amendments Proposed

Stricter Punishments
- The proposed amendments significantly enhance the penalties for exam-related offences:
  - Imprisonment: Up to 10 years
  - Fine: Up to Rs 10 crore
- The stricter penalties are expected to strengthen deterrence against all forms of exam fraud.
Time-Bound Investigation and Trial
- Investigation: Must be completed within two months.
- Trial: Must be completed within three months.
- Total timeline: Cases must be concluded within five months.
- This addresses one of the most serious weaknesses in the existing framework, prolonged delays in investigation and judicial proceedings.
Statutory Backing for Fast-Track Courts
- The Bill provides statutory backing for the establishment of fast-track courts specifically to handle exam paper leak cases.
- Law and Justice Minister Arjun Ram Meghwal announced that fast-track courts would initially be set up in the High Courts of Bombay, Calcutta, Delhi and Madhya Pradesh.
- These are the states where cases pertaining to the NEET paper leak are currently ongoing.

Background and Trigger for the Amendment

The amendments come in response to widespread protests and public anger over:
- NEET-UG paper leak in May 2026.
- Irregularities in the CBSE school examination process.
- Calls for reforms in the education system.
- Demands for compensation to families of students who died by suicide after the NEET-UG paper leak.
Various student groups organised protests, demanding strict action against those responsible for exam irregularities.
Prime Minister Narendra Modi announced the government's decision to bring in a tough new law and fast-track courts. The Cabinet also approved the draft Bill.

Significance of the Amendments

Stronger Deterrence
- The enhanced punishment of up to 10 years imprisonment and Rs 10 crore fine sends a strong signal that exam fraud will not be tolerated.
- The significantly higher financial penalty hits organised networks economically.
- The combination of criminal and financial penalties strengthens the legal framework.
Speedier Justice
- The five-month deadline for investigation and trial addresses the problem of delayed justice.
- Fast-track courts ensure dedicated judicial infrastructure for exam-related cases.
- Quick resolution acts as a stronger deterrent than prolonged proceedings.
Institutional Reform
- Statutory backing for fast-track courts institutionalises the special judicial mechanism.
- Clear timelines reduce procedural delays and administrative inefficiencies.
- The amendments address gaps identified during the implementation of the 2024 Act.
Public Confidence
- The amendments respond to widespread public anger over exam leaks.
- They aim to restore faith in the integrity of public examinations.
- They address the concerns of students and parents affected by exam irregularities.

Challenges Ahead

Implementation
- Setting up fast-track courts across the country will require significant judicial infrastructure.
- Training judges and prosecutors for specialised exam fraud cases.
- Ensuring that investigating agencies have adequate resources to meet the two-month deadline.
Legal and Procedural
- Balancing speed with fairness: ensuring that time-bound trials do not compromise the rights of the accused.
- Coordination between investigating agencies and the judiciary to meet timelines.
- Managing a high volume of cases that may arise with stricter enforcement.
Systemic Issues
- Addressing the root causes of exam leaks, including corruption in recruitment and examination bodies.
- Strengthening internal controls in institutions like the NTA, UPSC, and SSC.
- Improving the digital security of examination systems to prevent leaks.
Judicial Capacity
- The High Courts of Bombay, Calcutta, Delhi, and Madhya Pradesh will need additional judges and staff.
- Ensuring continuity of fast-track courts beyond initial cases.
- Managing existing backlog while adding new fast-track cases.

Source: TH | IE

Exam Paper Leaks FAQs

Q1: What is the Public Examinations (Prevention of Unfair Means) Act, 2024?

Ans: It is India's first dedicated national law to curb leaks, malpractices, and organised cheating in public examinations conducted by bodies like UPSC, SSC, RRB, IBPS, and NTA.

Q2: What are the new punishments proposed under the amendments?

Ans: The amendments propose imprisonment of up to 10 years and a fine of up to Rs 10 crore for those involved in exam paper leaks.

Q3: What is the timeline proposed for investigation and trial of paper leak cases?

Ans: The Bill proposes a two-month time frame for investigation and three months for trial, ensuring cases are concluded within five months.

Q4: Where will the fast-track courts be set up initially?

Ans: Fast-track courts will initially be established in the High Courts of Bombay, Calcutta, Delhi, and Madhya Pradesh, where NEET paper leak cases are ongoing.

Q5: What triggered the need for these amendments?

Ans: The amendments were triggered by widespread protests over the NEET-UG paper leak and irregularities in the CBSE examination process, demanding stricter laws and accountability.

India Secures Lower US Tariffs Under Section 301 Amid Forced Labour Compliance

July 25, 2026

US Tariffs Latest News

The United States has imposed 10% additional tariffs on imports from India under Section 301 of the US Trade Act, lower than the 12.5% initially proposed.
The reduction follows India's decision to prohibit imports of goods produced using forced labour, aligning with US concerns while India and the US continue negotiations on a bilateral trade agreement.

Why the US Imposed Section 301 Tariffs

Section 301 of the US Trade Act:
- It authorises the US to investigate and respond to unfair foreign trade practices.
- Remedies include additional tariffs, import restrictions or negotiated settlements.
- Unlike Section 122, Section 301 measures remain effective until modified or withdrawn.
Earlier, the US Trade Representative (USTR) initiated an investigation against 60 trading partners, alleging inadequate measures to prevent imports of goods produced through forced labour.
The tariffs replace temporary Section 122 tariffs, which could remain in force only for 150 days, whereas Section 301 tariffs are permanent unless reviewed by the US administration.
The measure seeks to protect American industries from unfair trade practices linked to forced labour.

India’s Policy Response

Ahead of the US decision, the Directorate General of Foreign Trade (DGFT) amended the Foreign Trade Policy by prohibiting the import of goods manufactured wholly or partly using forced labour.
Significance:
- India's compliance reduced the proposed tariff from 12.5% to 10%.
- It strengthened India's image as a responsible trading partner.
- The move complements ongoing India-US Free Trade Agreement (FTA) negotiations.
DGFT: Functions under the Ministry of Commerce and Industry, DGFT implements India's Foreign Trade Policy, and regulates exports and imports through notifications and licensing mechanisms.

Tiered US Tariff Structure

Most favoured category:
- The European Union (EU) and Taiwan receive the most favourable treatment. Additional Section 301 tariffs apply only where existing Most Favoured Nation (MFN) tariffs are below specified thresholds.
- MFN: A core World Trade Organization (WTO) principle requiring members to extend the same tariff treatment to all WTO members unless covered by FTAs or other recognised exceptions.
India's category (10% tariff): India joins 17 economies, including Bangladesh, Pakistan, Sri Lanka, Malaysia, Indonesia, Canada, Mexico, and the United Kingdom.
Least favoured category (12.5%): Countries facing higher tariffs include China, Vietnam, Russia, Brazil, Australia, Türkiye, Saudi Arabia, and Philippines. Thus, India enjoys a relative tariff advantage over several major export competitors.

Impact on India’s Export Competitiveness

Positive outcomes:
- Indian exporters retain competitiveness in labour-intensive sectors such as textiles, garments, leather, and footwear.
- India's tariff burden is lower than that of China and Vietnam, improving export prospects.
Limitations:
- Around 70% of India's exports to the US will now attract existing MFN tariff, plus 10% Section 301 tariff.
- Products already covered under Section 232 (steel, aluminium, copper, automobiles and auto components) continue to face 25–50% tariffs.

Textile Tariff-Rate Quotas (TRQs) - A Competitive Concern

The US introduced TRQs for Bangladesh, Cambodia, Indonesia, and Malaysia.
Features:
- Limited quantities of textiles and apparel from these countries can enter the US without Section 301 tariffs for three years.
- These countries are also encouraged to source US cotton and textile inputs.
Implications for India: India has not received a TRQ, potentially reducing its competitiveness in textile exports. Bangladesh, a major importer of Indian cotton and fibre, may increasingly shift towards US inputs.

Major Exemptions from Section 302 Tariffs

The US has exempted several categories from additional tariffs, including -
- Aircraft and aviation equipment.
- Pharmaceutical products and pharmaceutical ingredients.
- Certain fertilisers, pesticides and industrial chemicals.
- Pig iron, aluminium scrap and strategic minerals.
- Semiconductor manufacturing equipment.
- Battery waste and recyclable materials.
- Agricultural inputs, seeds and selected food products.
- Medical devices such as MRI machines, ECG equipment and defibrillators.
- Selected artworks, antiques and collectibles.
These exemptions aim to prevent supply disruptions and inflation while safeguarding critical industries.

Future Trade Risks

Apart from forced labour concerns, the USTR is conducting another investigation into excess manufacturing capacity involving India, China, the EU, Japan, Singapore, Switzerland and others.
Possible consequences include - Additional trade restrictions or tariffs, greater scrutiny of industrial subsidies and manufacturing policies, and new challenges for India's export sector despite ongoing FTA negotiations.

Conclusion

India's prohibition on imports produced through forced labour enabled it to secure a lower 10% US Section 301 tariff, preserving its competitiveness relative to major rivals such as China and Vietnam.
It strengthens India's position in labour-intensive exports and supports ongoing India-US trade negotiations.
However, the absence of textile TRQs and the possibility of further US investigations into excess manufacturing capacity indicate that trade relations will continue to evolve, requiring sustained policy reforms and strategic engagement.

Source: IE | FE

US Tariffs FAQs

Q1: How did India's prohibition on imports produced using forced labour influence the US Section 301 tariff decision?

Ans: It enabled India to secure a lower 10% Section 301 tariff instead of the proposed 12.5%, improving its export competitiveness.

Q2: What is the significance of Section 301 of the US Trade Act in international trade?

Ans: It authorises the US to investigate and impose trade remedies, including tariffs, against countries engaged in unfair trade practices.

Q3: How do the newly introduced textile TRQs affect India's textile exports?

Ans: Its exclusion from TRQs may reduce India’s competitiveness as beneficiary countries can export specified textile quantities to the US.

Q4: What is the role of the DGFT in India's trade policy?

Ans: DGFT administers India's Foreign Trade Policy by regulating exports and imports.

Q5: Why is the MFN principle important in the context of the US Section 301 tariff framework?

Ans: Because the US tariff structure builds upon existing MFN tariff rates, making MFN treatment a key determinant.

SEBI PMS Overhaul: Wider Investment Choices and Simplified Entry Rules

July 25, 2026

SEBI PMS Overhaul Latest News

The Securities and Exchange Board of India (SEBI) has proposed a sweeping review of the SEBI (Portfolio Managers) Regulations, 2020, through a consultation paper released recently.
This marks one of the most comprehensive reviews of portfolio management services (PMS) regulations since their notification in 2020.

Why the Overhaul Is Needed

Assets managed by portfolio managers have more than doubled over the past six years, prompting SEBI to modernise the regulatory framework.
The reforms aim to offer greater flexibility to portfolio managers and broader investment options to sophisticated investors, while adapting to the growing complexity of India's capital markets.

What Is Portfolio Management Service (PMS)?

PMS is a professional investment service registered under the SEBI (Portfolio Managers) Regulations, 2020.
A qualified fund manager manages the equity, debt, and other securities portfolio of a high net-worth client.
Only SEBI-registered corporate entities, companies, or LLPs can legally offer PMS in India.
SEBI mandates a minimum investment of Rs 50 lakh per client.

Industry growth

PMS assets under management (AUM) rose from Rs 18.07 lakh crore (April 2019) to Rs 42.61 lakh crore (May 2026).
Total clients grew from 1.5 lakh to 2.19 lakh over the same period.
The number of registered portfolio managers more than doubled — from 226 in 2020 to 515 as of May 2026.

Key Proposed Reforms

Wider Investment Universe
- Portfolio managers may be permitted to invest in overseas listed equity and debt securities, aligning PMS rules with those governing mutual funds and alternative investment funds.
- Investments allowed in "to-be-listed" securities, widening market exposure.
- Discretionary portfolio managers may invest up to 10% of client AUM in investment-grade unlisted debt securities.
- Currently, PMS managers cannot invest client funds in foreign securities — though resident individuals can do so independently via the Liberalised Remittance Scheme (LRS), capped at USD 250,000 per financial year.
New 'Mutual Fund-Only' PMS (MF-PMS) Category
- A simplified framework aimed at mass-affluent investors, focused exclusively on managing investments in direct plans of mutual funds, ETFs, and specialised investment funds.
- Requires separate registration as MF-PMS.
- Minimum client investment proposed to be reduced from Rs 50 lakh to Rs 25 lakh.
- Minimum net worth requirement for applicants proposed to be lowered from Rs 5 crore to Rs 2 crore.
- Mutual fund distributors (MFDs) operating under MF-PMS must maintain arm's length separation between their MFD and MF-PMS functions through distinct departments, with client-level segregation — the same client cannot be offered both services by one entity.
Easing Compliance Burden
- Greater flexibility in using derivatives for hedging and investment strategies, with exposure allowed up to 1.25 times client AUM.
- A new framework permitting independent fund managers to operate under registered PMS platforms, with compliance responsibility remaining with the registered portfolio manager.
- Firms managing assets below Rs 100 crore may be exempted from maintaining a separate dealing room, cutting operational costs for smaller players.

Balancing Innovation with Investor Protection

SEBI has stressed that the reforms aim to strike a balance between innovation, ease of doing business, and investor safeguards.
The regulator believes the evolving PMS industry requires a framework that supports greater product diversity while maintaining adequate oversight.

Conclusion

SEBI's proposed PMS overhaul reflects a maturing regulatory approach — expanding investment avenues and lowering entry barriers to serve a broader investor base, while retaining safeguards through segregation norms and enhanced oversight.
If implemented, it could significantly deepen and diversify India's portfolio management landscape.

Source: IE | LM

SEBI PMS Overhaul FAQs

Q1: Why has SEBI proposed the SEBI PMS Overhaul?

Ans: The SEBI PMS Overhaul aims to modernise portfolio management regulations by expanding investment opportunities, improving operational flexibility and supporting the growing PMS industry.

Q2: What new investment opportunities are proposed under the SEBI PMS Overhaul?

Ans: The SEBI PMS Overhaul permits overseas securities, to-be-listed securities and limited investment in unlisted debt, broadening the investment universe for portfolio managers.

Q3: What is the new MF-PMS category under the SEBI PMS Overhaul?

Ans: The SEBI PMS Overhaul introduces a Mutual Fund-Only PMS category with lower investment thresholds, focusing on direct mutual fund plans, ETFs and specialised investment funds.

Q4: How does the SEBI PMS Overhaul balance innovation with investor protection?

Ans: The SEBI PMS Overhaul retains client segregation, regulatory oversight and compliance safeguards while enabling greater flexibility, product diversity and ease of doing business.

Q5: Why is the SEBI PMS Overhaul important for India's capital markets?

Ans: The SEBI PMS Overhaul strengthens India's investment ecosystem by expanding investor access, encouraging innovation and creating a more competitive and diversified portfolio management industry.

Airport Operators Owning Airlines: Market Access, Fair Play and Regulatory Concerns

July 25, 2026

Airport Operators Owning Airlines Latest News

The Centre is reportedly weighing policy relaxations that could allow Indian airport operators to own airlines. Preliminary internal discussions are underway, though nothing is finalised.
Such a move could open the door for airport operators like the Adani group and GMR group to enter the airline business.

Background of the Discussion

Initial talks on cross-ownership reportedly followed the Adani group's request for an enabling policy environment, though Adani Enterprises has denied evaluating any airline entry proposal.
The government has been pushing for more airlines in Indian skies, given that IndiGo and the Air India group together hold over 90% of the domestic market share — a near-duopoly.
The stated objective behind exploring this policy shift is to foster greater competition in the aviation sector.

Current Regulatory Restrictions

India currently imposes strict limits on cross-ownership between airports and airlines:
- Operators of India's largest airports — Delhi (GMR, 74% stake) and Mumbai (Adani group, 74% stake) — are barred from owning more than 10% in any scheduled carrier.
The reverse restriction also applies: airlines face strict limits on owning airports.

The Core Concern: Conflict of Interest

Experts warned that allowing airport operators to run airlines would create a "massive conflict of interest" against consumer interests.

Key risk areas

Slot allocation: If an airport operator also runs an airline, and is simultaneously the slot coordinator, there is inherent conflict in allocating prime slots between its own airline and competitors.
Infrastructure access: Airlines depend on airports for critical facilities — parking bays, check-in counters, aircraft stands, boarding gates, and ground handling. Any perceived favouritism, even unintentional, could trigger anti-competitive practice allegations.
Experts note that even without actual discrimination, the appearance of unequal treatment undermines stakeholder confidence — a key concern for anti-trust regulation, which focuses on maintaining a level playing field, not just proven wrongdoing.

The Counter-Argument: Capital and Efficiency

Experts acknowledge the rationale behind considering this move:
- Capital access: New airlines often cannot sustain losses for years against dominant incumbents, but well-capitalised airport operators like Adani and GMR can absorb such risk.
- Efficiency argument: Since airport revenues increasingly depend on passenger footfall, an airport-owning-airline model could incentivise more flights at lower fares rather than fewer at higher fares.

Global Practices

Aviation regulators worldwide have generally favoured keeping airports and airlines operationally separate:
- West Asia: In hubs like Dubai, Abu Dhabi, and Doha, airports and airlines are government-owned but remain distinct corporate entities (e.g., Dubai Airport and Emirates; Etihad and Abu Dhabi airport).
- Singapore: Changi Airport and Singapore Airlines are linked via state investment but maintain separate management and regulatory oversight.
- Key distinction: These hub models operate in markets with negligible domestic air traffic and no domestic competition — unlike India, where airlines are largely private and domestic competition is significant.
- European Union: Enforces some of the world's strictest competition rules, mandating that airport slot coordinators remain functionally independent from any interested party.
- United States: Most major airports are owned by city/county governments or independent authorities. Federal Aviation Administration grant assurances prohibit airport discrimination among airlines and bar airport revenue from being invested in airlines.
India's market structure — dominated by private airlines and increasingly private airport operators — makes it structurally closer to Europe than to the West Asian or Singapore hub models.

Safeguards Needed, If Policy Changes

Experts recommend a watertight regulatory framework, including:
- Structural separation between airport and airline businesses
- Independent boards and management teams for each entity
- Strict protection of carriers' commercially sensitive information
- Independent airport slot coordinators
- Transparent gate and terminal allocation policies
- Enhanced oversight by regulators — the Airports Economic Regulatory Authority of India (AERA), Directorate General of Civil Aviation (DGCA), and the Competition Commission of India (CCI)

Conclusion

Allowing airport operators to own airlines could inject much-needed capital and competition into India's airline duopoly, but it risks compromising the neutrality airports must maintain as shared infrastructure.
Any policy shift will need robust structural and regulatory safeguards to prevent the natural monopoly of airports from tilting the competitive playing field in aviation.

Source: IE | MC

Airport Operators Owning Airlines FAQs

Q1: Why is the proposal on Airport Operators Owning Airlines being considered?

Ans: Airport Operators Owning Airlines is being explored to attract fresh investment, promote competition and reduce the dominance of India's near-duopoly in the domestic aviation market.

Q2: What is the biggest concern regarding Airport Operators Owning Airlines?

Ans: Airport Operators Owning Airlines may create conflicts of interest in slot allocation, gate access and airport infrastructure, potentially affecting fair competition among carriers.

Q3: How do global aviation markets regulate Airport Operators Owning Airlines?

Ans: Most jurisdictions maintain structural separation between airports and airlines, ensuring independent management and regulatory oversight to preserve competition and prevent discriminatory practices.

Q4: What safeguards are needed if Airport Operators Owning Airlines is permitted?

Ans: Airport Operators Owning Airlines would require independent slot coordinators, separate management, transparent infrastructure allocation and stronger oversight by AERA, DGCA and CCI.

Q5: Why is Airport Operators Owning Airlines significant for India's aviation sector?

Ans: Airport Operators Owning Airlines could improve capital availability and airline competition, but only if supported by strong safeguards that ensure neutrality and a level playing field.