Current Affairs 05 July 2025

Content :

1. PM Modi hails 35 million diaspora as India’s pride
2. India’s $724 Million WTO Retaliation Notice Against U.S.
3. Kailash Manasarovar Yatra Resumes (2025)
4. Dalai Lama Succession Issue: India’s Neutrality & China’s Warning
5. US 1% Remittance Tax: Limited Impact, But Strategic Signals

PM Modi hails 35 million diaspora as India’s pride

Strategic Significance of the Indian Diaspora

• Diaspora as a Strategic Asset:
  • The Indian diaspora — over 35 million people in 200+ countries — is the world’s largest and contributes to India’s soft power, foreign policy, investment inflows, remittances, and cultural exports.
  • PM Modi termed them“Rashtradoots” — ambassadors of Indian civilization.

Relevance : GS 2(International Relations)

• Identity, Legacy, and Nation Branding:
  • The speech acknowledged the role of diaspora in shaping India’s global image — from yoga and Ayurveda to democracy and technology.
  • Celebrates diasporic success stories as collective pride and global influence tools.

• Girmitiyas as Civilizational Bridge:
  • Special focus on Girmitiyas — descendants of indentured Indian labourers — as carriers of Indian heritage across the Indian Ocean world.
  • The outreach recognises the historical injustice of indenture and seeks to rebuild ancestral ties with dignity.

Major Announcements & Diplomatic Measures

OCI Cards for 6th Generation Indians

• Until now, the OCI Card was limited up to 4th generation descendants of Indian origin.
• PM Modi’s announcement to grant OCI cards to 6th generation Indians in Trinidad & Tobago marks a paradigm shift in diaspora inclusion.
• It symbolises legal, emotional, and symbolic reconnection with historical diaspora.

Mapping the Girmitiya Past

• India to create a comprehensive database of:
  • Villages of origin in Bihar, Eastern UP, Tamil Nadu, Andhra Pradesh, etc.
  • Current diaspora locations (Fiji, Mauritius, Guyana, South Africa, Suriname, etc.)
  • Oral histories, archives, and cultural practices.
• Plan to institutionalise World Girmitiya Conferences for cultural exchange and research.

Digital Public Infrastructure Diplomacy – UPI Rollout

• Trinidad and Tobago becomes the first Caribbean country to adopt India’s UPI (Unified Payments Interface).
• Strengthens digital financial diplomacy, enabling seamless cross-border transactions.
• Facilitates easier remittances, financial inclusion, and builds trust in India’s tech ecosystem.

Dimensions of India’s Diaspora Policy

Cultural Diplomacy

• Promotion of Bhojpuri language, Ramleela, Indian festivals, and temples across the Caribbean and Pacific.
• Establishment of Indian Cultural Centres under ICCR.
• Celebration of Pravasi Bharatiya Divas (January 9) to honour diaspora contributions.

Legal & Policy Framework

• Overseas Citizens of India (OCI) card provides:
  • Visa-free travel, rights to own property, educational and economic opportunities (without voting or government jobs).
• Emigration Act reform (pending) aims to regulate and protect Indian workers abroad.

Foreign Policy Leverage

• Diaspora serves as a foreign policy multiplier in countries like the US, UK, UAE, Canada, and Mauritius.
• India uses diaspora networks to influence foreign governments, lobby for policies, and deepen people-to-people links.

Economic Contributions

• Remittances to India (2023): $125 billion (highest globally, World Bank)
• Diaspora investments in India (e.g., bonds, startups, philanthropy) continue to grow.
• Push for diaspora bond schemes, venture funds, diaspora tourism.

Facts & Data

Critical Analysis: Beyond Symbolism

• Progressive Inclusion: Granting OCI status to 6th generation diaspora sets a global precedent in diaspora reconnection.
• Digital Diplomacy with Local Impact: UPI is not just tech export, but grassroots-level financial empowerment in T&T.
• Policy Shift from Remittance to Relationship: Focus is shifting from treating diaspora as economic resource to civilizational partners.
• Soft Power in a Multipolar World: Leveraging diaspora enhances India’s multipolar engagement, especially in Global South diplomacy.

Trinidad and Tobago: Key Facts & India Connect

• Location: Twin-island nation in the southern Caribbean, near Venezuela.
• Population: ~1.5 million (2024 est.)
• Indian-Origin Population: ~550,000 (~38%) — one of the highest proportions in the Western Hemisphere.
• Language: English (official); Hindi, Bhojpuri spoken in some communities due to Indian heritage.
• Colonial History: Former British colony; gained independence in 1962.

• Girmitiya Legacy:
  • First Indian indentured labourers arrived aboard Fatel Razack on May 30, 1845.
  • Most came from Bihar and Eastern UP, speaking Bhojpuri.
  • 2025 marks 180 years since first arrival.

• Cultural Influence:
  • Hinduism, Ramleela, Phagwa (Holi), Indian cuisine, Bollywood are deeply embedded.
  • Indian Arrival Day (May 30) is a national holiday.

• Economic Profile:
  • High-income economy due to oil and natural gas.
  • Regional financial hub in the Caribbean.

• India-T&T Relations:
  • Friendly ties based on culture and people-to-people connect.
  • Hosts an Indian High Commission in Port of Spain.
  • Recently adopted India’s UPI system (first in the Caribbean).

• Notable Persons of Indian Descent:
  • Kamla Persad-Bissessar – First woman PM (2010–15), of Indian origin.
  • Prominent Indo-Trinidadians in politics, law, and culture.

India’s $724 Million WTO Retaliation Notice Against U.S.

What Happened? (Issue Overview)

• India formally notified the World Trade Organization (WTO) on July 3, 2025, that it reserves the right to levy retaliatory tariffs worth $723.75 million on U.S. products.
• This is in response to U.S. tariffs (25%) on Indian automobiles and parts imposed on March 26, 2025, without consultation.
• India claims the U.S. measures violate WTO rules (GATT 1994 & Agreement on Safeguards).

Relevance : GS 2(International Relations) , GS 3(Indian Economy)

Legal Basis: WTO Framework & India’s Rights

1. General Agreement on Tariffs and Trade (GATT), 1994
   1. Governs global trade in goods.
   1. Prohibits arbitrary tariff increases.

• Agreement on Safeguards (AoS)
  • Mandates consultations (Article 12.3) before invoking protectionist measures.
  • Allows retaliation (Article 8.2) if consultations are skipped and injury is proven.

India’s Stand:

• U.S. failed to notify and consult India under AoS before imposing tariffs.
• Therefore, India is lawfully invoking Article 8 to suspend equivalent trade concessions.

Data-Driven Impact Analysis

Diplomatic Context: Why It Matters Now

• Comes at a time when India–U.S. mini trade deal is in final stages.
  → This action could add pressure on the U.S. or complicate finalization.
• Sign of India asserting its trade sovereignty more confidently post-COVID and post-Atmanirbhar Bharat era.
• This follows global trend of:
  • U.S. using tariffs for industrial protection (especially against China and now selectively against allies).
  • India and others increasingly pushing back using WTO norms.

Broader Dimensions & Strategic Implications

India’s Evolving Trade Strategy

• From reactive diplomacy to rules-based assertion at WTO.
• India’s use of Article 8 of AoS indicates legal and strategic maturity.

India–U.S. Trade Relations Tensions

• Persistent irritants:
  • U.S. GSP withdrawal (2019)
  • India’s digital tax (Equalisation Levy)
  • Tariffs on steel, aluminium, and now autos
• Yet, both nations want closer tech, defence, and services trade.

India’s Global Trade Identity

• India positioning itself as a WTO-compliant, rule-abiding nation while defending domestic industry.
• Counters Global North’s selective protectionism under “security” or “safeguards” pretexts.

Safeguard Measures: A Grey Area?

• U.S. did not notify WTO that its action is a safeguard — but India treats it as such.
• Raises critical question: Can powerful nations bypass WTO rules and get away with it?

Updated WTO & Trade Context (2024–25)

Critical Evaluation

• India’s Stand is Legally Sound:
  • As per WTO norms, non-notified safeguard actions can’t be used to penalise developing countries without consultation.
• Strategic but Calculated Retaliation:
  • India issues notifications before actual imposition, keeping pressure on the U.S. but leaving room for resolution.
• Challenges WTO’s Crisis:
  • Raises concern over WTO’s inability to enforce rules on major economies.
  • Undermines multilateralism if such retaliations become routine.

WTO

• Established in 1995, the WTO succeeded GATT (1947) to regulate international trade through a rules-based system.
• Headquartered in Geneva, it has 164 member countries, covering over 98% of global trade.
• India is a founding member and an active participant in negotiations, disputes, and developmental coalitions.
• Key WTO agreements include GATT (goods), GATS (services), TRIPS (IPR), and AoA (agriculture).
• The Dispute Settlement Mechanism (DSM) allows countries to resolve trade conflicts; however, its Appellate Body is non-functional since 2019 due to U.S. opposition.
• WTO prohibits arbitrary tariffs but allows safeguards, anti-dumping, and countervailing measures under defined rules.
• India champions issues like food security, MSP support, TRIPS waivers, and special treatment for developing countries.
• WTO faces challenges in addressing e-commerce, digital taxation, and global data flows, where consensus is lacking.
• Multilateralism under strain as bilateral/regional FTAs grow and major powers (e.g., U.S., China) bypass WTO norms.
• There is a global push for WTO reform—focusing on dispute settlement revival, subsidy rules, and inclusive digital trade frameworks

Kailash Manasarovar Yatra Resumes (2025)

What Happened?

• After a 6-year suspension, the Kailash Manasarovar Yatra resumed in 2025, with 750 pilgrims selected from 5,000 applicants via lottery.
• The yatra had been suspended since 2020 due to:
  • COVID-19 pandemic,
  • The India–China military standoff (Galwan clash, LAC tensions).
• Resumption follows high-level diplomacy between PM Modi and President Xi Jinping in early 2025.

Relevance : GS 1(Culture , Heritage) , GS 2(International Relations)

Strategic Significance: Beyond Spirituality

Soft Power & Cultural Diplomacy

• The yatra strengthens India’s civilizational diplomacy, rooted in shared religious and cultural connections.
• Seen as a civil society bridge amid state-level tensions.

India–China Confidence Building

• The resumption reflects tentative thawing of bilateral ties.
• Occurs amid wider efforts to restore direct flights, trade talks, and border mechanisms.

Geopolitical Optics

• Routes pass through sensitive border areas (Nathu La, Lipulekh), making the yatra a diplomatic balancing act.

Religious & Cultural Dimensions

• Hindus: Abode of Lord Shiva, Parvati, Ganesha, Kartikeya. Lake Manasarovar believed to be formed by Lord Brahma’s mind.
• Buddhists: Sacred as Mount Meru, a cosmic axis. Maya Devi (Buddha’s mother) said to have visited Manasarovar.
• Jains: Rishabhadeva, first Tirthankara, attained salvation here.
• Bon Religion (pre-Buddhist Tibet): Site of cosmic power and pilgrimage.
• Nature Worshippers: Source of four major rivers — Indus, Sutlej, Brahmaputra, and Ganga tributaries.

Climate Change & Environmental Concerns

• Warming Tibetan Plateau threatens the region’s fragile ecology:
  • Melting glaciers, glacial lake outburst floods (GLOFs),
  • Thinning permafrost due to infrastructure expansion (rail, road, military).
• China’s meteorological agencies have raised warnings.
• UNESCO heritage application (India, 2019) for Indian routes still pending; Chinese side unlikely to open for global scrutiny.

Pilgrimage Logistics: Challenges & Realities

• Altitude: 15,000+ feet; oxygen levels 30% lower than sea level.
• Routes:
  • Lipulekh Pass (Uttarakhand) – shorter, high-altitude.
  • Nathu La Pass (Sikkim) – longer but motorable.
• Pilgrims undergo:
  • Rigorous medical tests,
  • Acclimatization,
  • Trek of 52 km (Parikrama/Kora).
• Cost: ₹3 lakh+ per pilgrim, excluding porter/pony fees (₹12k–₹29k extra).
• Accompanied by:
  • 2 liaison officers, medical staff, cooks, and Indo-Tibetan Border Police (ITBP) teams.

Positive Developments

• Symbolic peace gesture amid LAC stalemate.
• Boost to local Tibetan economies reliant on religious tourism.
• India–China managing “compartmentalised engagement”—cooperation in culture despite border frictions.

India–China Relations Lens

• The yatra’s restart reflects a strategic thaw without full de-escalation.
• India’s insistence on resuming the yatra also asserts its cultural claims in contested areas.
• Diplomatic messaging: faith and people-to-people ties cannot be held hostage to geopolitical competition.

Dalai Lama Succession Issue: India’s Neutrality & China’s Warning

What Happened?

• The Dalai Lama (89) declared in Dharamshala that the institution of the Dalai Lama will continue after him, and that his successor would be identified by the Gaden Phodrang Trust, not Beijing.
• China responded sharply, asserting that only Beijing can appoint the next Dalai Lama under the Qing-era Golden Urn system.
• India’s MEA issued a carefully worded neutral statement, distancing itself from earlier support voiced by Union Minister Kiren Rijiju (who later clarified he was speaking as a “devotee”).

Relevance : GS 1(Culture , Heritage) ,GS 2(International Relations)

India’s Official Position (MEA Statement)

• “India does not take any position on matters concerning beliefs and practices of religion.”
• Reiterated its commitment to religious freedom and the rights of communities like the Tibetans in India to practice their faith.

India’s Constitutional & Strategic Rationale

• As a secular democracy, India cannot officially endorse succession in a religious tradition.
• The stance avoids escalating tensions with China, especially when India–China border disengagement and trade talks are ongoing.
• It also preserves autonomy for the Tibetan community in India without violating diplomatic protocols.

Why Is This Issue Geopolitically Crucial?

• The Dalai Lama is not just a spiritual figure, but a symbol of Tibetan identity, resistance, and Soft power.
• China’s insistence on appointing the next Dalai Lama is part of its strategy to control Tibet’s religious institutions.
• A Beijing-appointed Dalai Lama would undermine the Tibetan exile movement headquartered in India.
• The succession issue could become a flashpoint in future India–China relations, especially if India hosts or supports an alternate successor.

China’s Sensitivity: Why the Strong Reaction?

• For China, Tibet is a core sovereignty issue and any foreign involvement is labelled as interference in “domestic affairs”.
• The Dalai Lama’s global influence threatens China’s narrative control over Tibetan identity.
• China seeks full legitimacy over religious appointments in Tibet (including Panchen Lama).

India & the Tibetan Community

• India has hosted the Dalai Lama in exile since 1959 and is home to over 100,000 Tibetan refugees, mostly in Himachal Pradesh, Karnataka, and Uttarakhand.
• Dharamshala is the seat of the Tibetan Government-in-Exile (not formally recognised by any country).
• India allows freedom of religion and assembly, but does not recognise the government-in-exile officially.

Dalai Lama Institution: Historical Context

• The 14th Dalai Lama (Tenzin Gyatso) is the current head of the Gelugpa school of Tibetan Buddhism.
• Reincarnation-based leadership tradition, but:
  • China kidnapped the 11th Panchen Lama and installed its own version.
  • Similar fears exist about the next Dalai Lama being “manufactured” by Beijing.
• The Golden Urn system, cited by China, was historically resisted by Tibetans and applied selectively.

Balancing Tightropes: India’s Diplomatic Strategy

US 1% Remittance Tax: Limited Impact, But Strategic Signals

What Happened?

• The US Senate and House passed the One Big Beautiful Bill Act (OBBBA), introducing a 1% tax on remittances sent from the US to other countries.
• Effective from January 1, 2026.
• Aimed at non-commercial overseas transfers; primarily affects individuals sending money abroad (especially immigrants).
• India is among the top recipients of US remittances.

Relevance : GS 2(International Relations),GS 3(Indian Economy)

How Big is India’s Exposure?

Why the Impact Is Limited

• Small tax rate (1%) compared to earlier proposals (3.5%–5%).
• Majority of remittances are “frontloaded” early in fiscal years, before tax kicks in (January 2026).
• Expat behavior may shift, reducing taxable flows via alternate channels or timings.
• Overall volume unlikely to drop sharply, given the deep familial and financial ties.

Global & Diaspora Context

• US-based remitters are largely professionals, H1B visa holders, and Indian-Americans with higher per capita income.
• Unlike Gulf-based blue-collar workers, the US diaspora is less price-sensitive.
• Top 5 remittance sources to India (2023–24):
  • 🇺🇸 USA – 20.6%
  • 🇦🇪 UAE – 19.2%
  • 🇬🇧 UK – 10.6%
  • 🇸🇦 Saudi Arabia – 6.7%
  • 🇸🇬 Singapore – 5.6%

Strategic & Policy Dimensions

Monetary Impact

• RBI unlikely to make major policy shifts — remittances still robust.
• Slight decline in inflows may occur post-2026, but can be absorbed.

Legal & Compliance

• May push remitters to explore non-bank or informal channels, leading to higher compliance risks.
• India may raise concerns at bilateral or WTO-level if the measure is seen as discriminatory.

Diaspora Sentiment

• Could sour perceptions among NRIs if remittances are penalized, especially during political campaign years.
• However, India’s US diaspora is economically resilient and likely to continue sending funds.

Broader Implications for India–US Economic Ties

• Comes amid FTA talks between India and the US, though India insists “no deal on deadlines.”
• Adds complexity to cross-border payments, digital taxation, and diaspora welfare discussions.
• India may need to negotiate exemptions or compensatory arrangements bilaterally.