16 July 2025: The Hindu Editorial

1. Services exports cut India’s trade deficit by 9.4% in Q1

Source – Page 1 & 10, The Hindu UPSC IAS Edition

Topic: GS3 – Economy (External Sector, Trade Policy)

Context

India’s overall trade deficit narrowed by 9.4% to $20.3 billion in the first quarter of FY 2025-26, largely due to an 11% surge in services exports. Merchandise exports also grew but at a slower pace. This signals a strong external sector performance amid global economic challenges.

Key Highlights

• Overall exports: $210.3 billion in Q1 (up 6% YoY).

• Services exports: $98.1 billion (+11%).

• Merchandise exports: $112.2 billion (+2%).

• Imports grew 4.4% to $230.6 billion.

• Top destinations: USA, UAE, Netherlands, China, UK.

• Major export sectors: Electronics (+47.1%), marine products (+19%), tobacco and tea (+16-19%).

Significance

• Boost to forex reserves: Narrower trade deficit strengthens rupee.

• Global context: WTO predicted weaker trade; India outperformed expectations.

• Policy impact: Export incentives, FTAs with UAE/EU contributing to diversification.

Challenges

• Merchandise export slowdown due to low petroleum prices.

• Import dependence on China (16% rise in Q1).

Way Forward

• Expand services sector competitiveness (IT, consulting, fintech).

• Diversify export base and markets to reduce vulnerability.

• Invest in manufacturing for long-term trade balance.

Practice Question: Discuss the role of services exports in narrowing India’s trade deficit. How can India leverage this trend to achieve sustainable external sector stability?”

2. SCO shouldn’t compromise on terrorism: Jaishankar

Source – Page 10, The Hindu UPSC IAS Edition

Topic: GS2 – International Relations, Regional Groupings

Context

At the Shanghai Cooperation Organisation (SCO) Foreign Ministers’ meeting in Tianjin, External Affairs Minister S. Jaishankar stressed the need for SCO to maintain an uncompromising stance against terrorism, citing the recent Pahalgam terror attack.

Background

• SCO: Founded in 2001 to address “three evils” — terrorism, separatism, extremism.

• Members: India, China, Russia, Pakistan, Central Asian nations, Iran.

Key Points from India’s Position

• Pahalgam attack: Targeted tourism to disrupt J&K economy, aimed at creating religious divides.

• Advocated unhindered regional connectivity and trade corridors (INSTC).

• Called out Pakistan for blocking transit routes for India-Afghanistan trade.

Geopolitical Significance

• SCO becoming a key platform for India to balance ties with China and Russia amid US-China rivalry.

• Push for regional anti-terrorism mechanisms.

Way Forward

• Institutionalize SCO counter-terror mechanisms with real-time intelligence sharing.

• Strengthen India’s role in Central Asian energy and connectivity projects.

Practice Question: Evaluate the role of the Shanghai Cooperation Organisation (SCO) in combating terrorism and promoting regional stability. How can India maximize its strategic interests within the SCO framework?

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