Topic : AI Action Summit, Paris – PM Modi’s Opening Address: Key Takeaways & India’s AI Initiatives

Relevance : GS Paper 3 Science and Technology

Source : PIB

Context :

Prime Minister Narendra Modi, at the AI Action Summit in Paris, underscored the transformative power of Artificial Intelligence while addressing its biases, governance challenges, accessibility issues, and energy demands. His speech also highlighted India’s AI-driven public infrastructure, ethical AI principles, and AI-enabled socio-economic development.

Key Themes from PM Modi’s Speech

The Promise and Challenges of AI

• AI is reshaping governance, economies, security, and society at an unprecedented pace.
• While AI offers revolutionary applications in health, education, agriculture, and public services, biases in training data remain a key concern.
• AI’s rapid adoption requires global cooperation for governance and ethical guidelines.
• There is a need to balance risk management with innovation and ensure AI benefits the Global South.

Global Governance & Responsible AI

• AI governance must not just address risks like misinformation, deepfakes, and cybersecurity threats but also promote accessibility and innovation.
• The Global South, including India, lacks AI resources such as compute power, data, talent, and financial support.
• Open-source AI models, quality datasets, and people-centric applications are necessary to democratize AI.
• India’s G20 leadership promoted AI principles of “Harnessing AI Responsibly, for Good, and for All.”

AI and the Workforce

• Fears of job losses due to AI automation are widespread. However, history shows that technology changes the nature of work rather than eliminating it.
• Governments must invest in skilling and reskilling workforces for the AI era.
• India has one of the largest AI talent pools, driving innovation in AI-enabled governance and public services.

Sustainable AI

• AI’s high energy consumption is a growing concern.
• Green AI must be powered by renewable energy, such as India and France’s International Solar Alliance initiatives.
• AI models should also be resource-efficient, optimizing compute power and data processing.
• PM Modi compared AI efficiency to the human brain’s ability to perform complex tasks using minimal energy.

India’s AI Leadership & Initiatives

• India has built one of the world’s largest Digital Public Infrastructures (DPI) for 1.4 billion people.
• The Data Empowerment and Protection Architecture (DEPA) ensures secure and transparent use of data.
• India is developing its own Large Language Model (LLM), reflecting its linguistic and cultural diversity.
• AI applications in governance, digital commerce, healthcare, and financial inclusion are expanding rapidly.
• A public-private partnership model is enabling affordable access to AI resources for startups and researchers.

India’s AI Initiatives & Key Provisions

National AI Mission

• Launched in 2018, the National AI Mission focuses on:
  • AI for Public Good (healthcare, agriculture, governance, disaster response).
  • Ethical AI principles and bias-free AI systems.
  • Talent development & AI skilling programs.

Bhashini: India’s AI-driven Language Model

• A government initiative to build an AI-powered translation ecosystem.
• Aims to make digital services available in regional languages.
• Supports text-to-speech and speech-to-text AI models in multiple Indian languages.

AI for Governance & Public Services

• AI-driven chatbots and automated systems improve citizen services.
• AI-powered predictive analytics optimize public policies and welfare schemes.
• AI-driven crop forecasting and smart irrigation enhance agricultural productivity.

AI for Healthcare

• AI-assisted diagnostics for diseases like cancer and tuberculosis.
• AI-enabled telemedicine platforms increase healthcare access in remote areas.
• Genomic AI research is advancing personalized medicine.

AI in Cybersecurity & Ethical AI

• India is developing techno-legal solutions for AI-driven data privacy.
• Efforts to combat deepfakes, misinformation, and cybersecurity threats.

India’s AI Compute Infrastructure

• Public-private partnerships provide affordable AI compute power for startups and researchers.
• Focus on open-access AI models to promote innovation.

Challenges & The Road Ahead

Challenges

• Bias in AI algorithms – Ensuring diversity in AI training data.
• Energy-intensive AI models – Transitioning to sustainable computing.
• Regulation & Ethics – Establishing global AI governance frameworks.
• Access to AI for Global South – Reducing the compute power gap.

India’s Roadmap for AI Development

• Strengthening AI R&D and startup ecosystem.
• Expanding AI-powered digital public services.
• Ensuring AI is inclusive, ethical, and sustainable.

Prelims Practice Question

With reference to the applications of Artificial Intelligence (AI), consider the following tasks:

1. Detecting fraudulent transactions in banking
2. Predicting weather patterns and natural disasters
3. Diagnosing diseases from medical images
4. Translating languages in real time
5. Automating legal judgments in courts

How many of the above tasks can currently be performed by AI?

(a) Only two
(b) Only three
(c) Only four
(d) All five

Answer: (c) Only four

Explanation:

AI is successfully used for fraud detection, weather prediction, medical diagnosis, and real-time language translation. However, while AI can assist in legal research and case analysis, it does not autonomously make legal judgments in courts due to ethical and legal considerations.

Mains Model Question

Artificial Intelligence (AI) is revolutionizing multiple sectors by automating complex tasks. Discuss the major areas where AI is currently applied and examine the ethical and regulatory challenges associated with its deployment. (Answer in 250-300 words)

Artificial Intelligence (AI) is transforming various sectors by enhancing efficiency, decision-making, and automation. Some of the major areas of AI application include:

• Banking and Finance: AI detects fraudulent transactions through pattern recognition and anomaly detection, improving financial security.
• Weather Forecasting and Disaster Management: AI-powered models predict extreme weather events, helping in disaster preparedness and mitigation.
• Healthcare: AI assists in diagnosing diseases using medical imaging, personalized treatment plans, and drug discovery.
• Language Translation and Communication: AI-driven tools enable real-time language translation, bridging communication gaps globally.
• Governance and Public Administration: AI enhances policy-making through data analytics, improves service delivery, and detects tax evasion.

Ethical and Regulatory Challenges

Despite its benefits, AI poses significant ethical and regulatory challenges:

• Bias and Discrimination: AI models trained on biased data may reinforce social prejudices, leading to unfair outcomes in hiring, law enforcement, and lending.
• Privacy and Data Security: AI relies on vast amounts of data, raising concerns about user privacy and misuse of sensitive information.
• Job Displacement: Automation threatens traditional employment, necessitating policies for reskilling and workforce adaptation.
• Legal and Ethical Accountability: AI systems lack human judgment, making it difficult to assign responsibility for errors, especially in healthcare and legal decision-making.
• Misinformation and Deepfakes: AI-generated content can manipulate public opinion, posing risks to democracy and security.

To harness AI responsibly, governments must establish ethical AI frameworks, transparent regulations, and public-private collaborations. India’s National AI Mission and Digital Public Infrastructure set an example by promoting AI for social good while ensuring accountability. Balancing innovation with ethical oversight is key to maximizing AI’s potential for humanity.

Topic : Digital Agriculture Mission: Transforming Indian Agriculture with Technology

Relevance : GS Paper 3 Agriculture

Source : Hindustan Times

Context :

The Digital Agriculture Mission (DAM), approved by the Government of India on September 2, 2024, aims to revolutionize Indian agriculture by integrating digital technologies, data analytics, and AI-driven solutions. With an outlay of ₹2817 crore, this initiative is designed to create a robust digital ecosystem that enhances farm productivity, efficiency, and farmer income.

Key Components of the Digital Agriculture Mission

Agristack: A Unified Digital Agricultural Database

Agristack is a centralized digital platform that compiles comprehensive data on farmers, landholdings, and crop patterns. It consists of three foundational registries:

• Farmers’ Registry: Digital records of farmer demographics, land ownership, and eligibility for government schemes.
• Geo-Referenced Village Maps: Digital mapping of agricultural lands to improve precision farming and resource management.
• Crop Sown Registry: Real-time tracking of crops grown in each region to aid in forecasting, procurement, and risk assessment.

Benefits of Agristack:

• Farmers can digitally authenticate themselves for accessing subsidies, crop insurance, and financial credit.
• The government can use AI and machine learning to predict yield trends, monitor climate impact, and optimize resource allocation.
• It enables farmers to buy and sell inputs and produce online, enhancing access to markets.

Krishi Decision Support System (KDSS)

A data-driven platform that provides real-time advisory services on:

• Optimal crop selection based on soil health and climate conditions.
• Weather forecasts and pest alerts to minimize losses.
• Efficient use of water, fertilizers, and pesticides through precision farming techniques.

Comprehensive Soil Fertility & Profile Map

• This initiative maps soil quality across regions, helping farmers choose the right crops and fertilizers.
• It supports the Soil Health Card Scheme, improving nutrient management and sustainability.

e-NAM: Digital Market Integration for Farmers

The National Agriculture Market (e-NAM) is a virtual trading platform integrating physical wholesale mandis across India to ensure transparent price discovery and better remuneration for farmers.

e-NAM Achievements (as of December 31, 2024):

• 1410 mandis integrated from 23 States and 4 UTs.
• Facilitated trading of over ₹2 lakh crore worth of agricultural produce.
• More than 1.7 crore farmers and 2 lakh traders have registered.
• Reduces the dominance of intermediaries, ensuring better price realization for farmers.

Impact of Digital Agriculture in India

Enhanced Farmer Income & Productivity

• Timely access to data and advisories improves crop yield and market value.
• AI-driven predictive analytics help farmers make informed decisions.
• Reduces post-harvest losses through real-time demand-supply insights.

Transparency & Financial Inclusion

• Digital platforms ensure direct benefit transfers (DBT) for subsidies.
• Farmers get easier access to loans and insurance through digital authentication.
• Blockchain technology in e-NAM enhances transparency in transactions.

Climate-Resilient & Sustainable Agriculture

• Weather-based analytics help in mitigating risks from climate change.
• AI and IoT-enabled smart farming ensures resource optimization.
• Promotes organic and precision farming for environmental sustainability.

Prelims Practice Question

With reference to the Digital Agriculture Mission (DAM), consider the following statements:

1. Agristack, a key component of DAM, includes databases such as the Farmers’ Registry and Crop Sown Registry.
2. e-NAM is a digital platform that integrates physical mandis to facilitate online trading of agricultural commodities.
3. The Digital Agriculture Mission is implemented solely by the Central Government without state participation.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Answer: (a) 1 and 2 only

Explanation:

• Statement 1 is correct: Agristack is a major component of the Digital Agriculture Mission and consists of the Farmers’ Registry, Geo-Referenced Village Maps, and the Crop Sown Registry.
• Statement 2 is correct: e-NAM (National Agriculture Market) is a virtual trading platform that integrates physical wholesale markets (mandis) to ensure transparent price discovery for farmers.
• Statement 3 is incorrect: The Digital Agriculture Mission is a collaborative initiative where the Central Government provides technical and financial support, but state governments play a crucial role in implementation by maintaining and updating digital records.

Mains Model Question

The Digital Agriculture Mission (DAM) aims to revolutionize Indian agriculture through technology. Discuss the key initiatives under DAM and examine the challenges associated with its implementation. (Answer in 250-300 words)

The Digital Agriculture Mission (DAM) was launched to modernize Indian agriculture using digital technologies, data analytics, and artificial intelligence. It aims to enhance farm productivity, ensure efficient resource management, and improve farmers’ access to markets and financial services.

Key Initiatives under DAM

1. Agristack: A unified digital database that includes:

1. Farmers’ Registry: Digital identification for accessing government schemes.
2. Geo-Referenced Village Maps: Mapping of agricultural lands for better resource planning.
3. Crop Sown Registry: Real-time data on crop patterns to assist in forecasting and procurement.
4. Krishi Decision Support System (KDSS): Provides AI-driven insights on weather forecasts, pest control, and optimal crop selection.
5. Comprehensive Soil Fertility & Profile Map: Helps farmers choose appropriate fertilizers and crops based on soil health analysis.
6. e-NAM (National Agriculture Market): Integrates physical mandis with a virtual trading platform for transparent price discovery and better market access.

Challenges in Implementation

• Digital Divide: Many small farmers lack access to smartphones and the internet, limiting adoption.
• Data Privacy Concerns: Centralized farmer databases require robust cybersecurity measures.
• Interoperability Issues: Lack of integration between different government and private platforms.
• Adoption Barriers: Low digital literacy and reluctance among farmers to adopt technology-driven solutions.

Conclusion

The Digital Agriculture Mission has the potential to transform Indian agriculture by enhancing efficiency, transparency, and sustainability. However, its success depends on rural digital infrastructure, cybersecurity measures, and farmer training programs to ensure inclusive adoption.

Topic : Agricultural Infrastructure Fund (AIF) – Strengthening Post-Harvest Management in India

Relevance : GS Paper 3 Agriculture, Economy

Source : The Hindu

Context :

The Agriculture Infrastructure Fund (AIF) was launched in 2020-21 to address the gaps in post-harvest management infrastructure and enhance farmers’ incomes by reducing post-harvest losses and ensuring better price realization. The scheme provides a credit facility of ₹1 lakh crore for farm-gate storage and logistics infrastructure, enabling farmers to store and sell their produce at optimal prices.

Key Features of AIF

• Loan Facility: ₹1 lakh crore loan through various lending institutions.
• Interest Subvention: 3% per annum up to a loan limit of ₹2 crores for 7 years.
• Credit Guarantee: Coverage up to ₹2 crores under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
• Operational Duration: 2020-21 to 2032-33.

Major Achievements of AIF (As of January 2025)

• More than 55,000 projects sanctioned with a total investment of ₹36,250 crores across India.
• Over 9 lakh employment opportunities created.
• 550 Lakh Metric Ton (LMT) of storage capacity added, saving 20.4 LMT of food grains and 3.9 LMT of horticulture produce annually.
• Agro-processing centers have increased farmers’ income by up to 20% by promoting value addition.
• Custom Hiring Centers (CHCs) established, promoting farm mechanization and sustainable residue management.

Government Initiatives Supporting AIF

1. Pradhan Mantri Kisan Sampada Yojana (PMKSY): Supports food processing industries, cold chains, and mega food parks.
2. Pradhan Mantri Fasal Bima Yojana (PMFBY): Ensures crop insurance, reducing risk for farmers.
3. e-NAM (National Agriculture Market): Provides an online trading platform for better price realization.
4. Mission for Integrated Development of Horticulture (MIDH): Promotes cold storage and value chain development.
5. Rural Infrastructure Development Fund (RIDF): Funds warehousing and cold storage projects.

Challenges and Way Forward

• Limited awareness and accessibility of financial support among small farmers.
• Need for better integration with digital agriculture initiatives like Agristack.
• Strengthening cold storage and food processing units to reduce food wastage further.

Prelims Practice Question

With reference to the Agricultural Infrastructure Fund (AIF), consider the following statements:

1. AIF provides an interest subvention of 3% per annum on loans up to ₹5 crores.
2. The scheme aims to improve post-harvest management infrastructure, including warehouses and cold storage.
3. The operational period of AIF extends from 2020-21 to 2032-33.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

Answer:

(b) 2 and 3 only

Explanation:

• Statement 1 is incorrect: AIF provides 3% interest subvention on loans up to ₹2 crores, not ₹5 crores.
• Statement 2 is correct: AIF focuses on developing post-harvest management infrastructure such as warehouses, cold stores, sorting units, and ripening chambers.
• Statement 3 is correct: The scheme is operational from 2020-21 to 2032-33, ensuring long-term agricultural infrastructure development.

Mains Model Question

Q. The Agricultural Infrastructure Fund (AIF) is a crucial initiative for strengthening post-harvest management and improving farmers’ income in India. Discuss its key features, impact, and challenges. Suggest measures to enhance its effectiveness.

The Agricultural Infrastructure Fund (AIF) was launched in 2020-21 to address post-harvest losses and infrastructure gaps in India. It provides financial support for the development of warehouses, cold storage, sorting units, ripening chambers, and agro-processing centers to help farmers store, process, and sell their produce at better prices.

Key Features of AIF

• ₹1 lakh crore loan facility for farm-gate infrastructure development.
• 3% interest subvention on loans up to ₹2 crores for a maximum period of 7 years.
• Credit guarantee coverage up to ₹2 crores under the CGTMSE scheme.
• Operational period: 2020-21 to 2032-33.

Impact of AIF

• Over 55,000 projects sanctioned, with an investment of ₹36,250 crores.
• Created 9 lakh employment opportunities, especially in rural areas.
• Added 550 LMT of storage capacity, preventing wastage of 20.4 LMT of food grains and 3.9 LMT of horticulture produce annually.
• Increased farmers’ income by up to 20% through agro-processing and direct market access.
• Promoted mechanization via Custom Hiring Centers (CHCs).

Challenges

• Limited awareness and accessibility for small farmers.
• Slow implementation in some states due to bureaucratic delays.
• Need for better integration with digital agriculture initiatives like Agristack.

Way Forward

• Strengthen awareness programs to increase farmer participation.
• Enhance digital integration for real-time monitoring and efficient resource allocation.
• Expand financial support for small and marginal farmers.
• Encourage private sector participation in infrastructure development.

By addressing these challenges, AIF can revolutionize India’s agricultural sector, ensuring higher income, reduced wastage, and sustainable growth.

Topic : Ayushman Bharat Digital Mission (ABDM)

Relevance : GS Paper 2 Governance

Source : PIB

Context :

The Ayushman Bharat Digital Mission (ABDM) was launched by the Government of India to create a robust, interoperable digital health ecosystem across the country. The mission aims to enable the creation of longitudinal electronic health records (EHR) for every citizen, improving accessibility, efficiency, and continuity of care. ABDM integrates various health systems into a unified digital network to foster better healthcare delivery, particularly in rural and remote areas.

Key Components of ABDM:

1. Ayushman Bharat Health Account (ABHA):
   The ABHA is a digital health ID that enables citizens to securely store and access their health records. It allows for easy access to healthcare information, thus making it easier for doctors and healthcare providers to offer accurate and timely treatment. As of 6th February 2025, more than 73.98 Crore ABHAs have been created.
2. Healthcare Professional Registry (HPR):
   The HPR registers healthcare professionals and links their qualifications and expertise with the digital health records system, ensuring that patients can verify the credentials of the professionals providing their care. There are currently over 5.64 lakh professionals registered under this registry.
3. Health Facility Registry (HFR):
   The HFR is a registry of all healthcare facilities in the country, ensuring that each facility is mapped and linked with the health data ecosystem. As of now, 3.63 lakh health facilities are registered, ensuring a wide range of accessible services across India.
4. Drug Registry:
   This registry helps monitor and manage the use of medicines across the health ecosystem, ensuring that citizens have access to safe and effective treatments. It is integral to ensuring the quality of healthcare services provided through ABDM.
5. ABDM-enabled Software for Health Facilities:
   Over 1.59 lakh health facilities are using ABDM-enabled software, which connects them to the overall digital infrastructure, facilitating smoother operations and patient care coordination.

Key Achievements and Milestones:

• Nationwide Coverage: ABDM is being implemented across 36 States/UTs and 786 districts, ensuring that both urban and rural populations benefit from the initiative.
• Health Records Integration: A significant achievement is the linking of over 49.06 crore health records with the ABHA, enabling seamless healthcare delivery.
• Inclusive and Accessible: The ABDM platform has been made multi-lingual and user-friendly to cater to citizens with varying levels of digital literacy. It also supports offline modes and assisted creation of ABHA accounts in areas with limited internet connectivity.

Technology Interventions:

• Telemedicine & Virtual Care: ABDM supports telemedicine and other digital health interventions, increasing the accessibility of healthcare services, especially for those in remote areas.
• Personal Health Records (PHR): The ABHA app and Aarogya Setu are tools through which individuals can manage their personal health records digitally, thus ensuring continuity of care.

Challenges and Measures:

• Digital Literacy: While the mission covers a vast population, digital literacy remains a challenge. The government has taken measures such as providing offline modes for ABHA creation and making digital applications intuitive and multi-lingual.
• Infrastructure Gaps in Rural Areas: ABDM aims to address this by offering assisted modes for registration and other services in areas with poor internet connectivity.

• Strengthening Infrastructure: Further development of internet connectivity and IT infrastructure is crucial, particularly in rural and remote areas, to ensure that ABDM can reach its full potential.
• Increased Awareness Campaigns: There is a need for large-scale awareness campaigns to educate citizens about the benefits and usage of ABDM, ensuring its widespread adoption.

Prelims Practice Question:

Consider the following statements regarding the Ayushman Bharat Digital Mission (ABDM):

1. The mission aims to create interoperable health data and longitudinal electronic health records for every citizen.
2. The Ayushman Bharat Health Account (ABHA) is a digital health ID that allows citizens to store and access their health records securely.
3. As of February 2025, the ABDM includes the registration of healthcare professionals and health facilities in its registries.
4. The mission is currently operational only in urban areas and major cities of India.

Which of the above statements are correct?

A) 1, 2, and 3 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, 3, and 4

Answer:

A) 1, 2, and 3 only

Explanation:

1. Statement 1 is correct: The Ayushman Bharat Digital Mission (ABDM) aims to create interoperable health data and longitudinal electronic health records (EHR) for every citizen, which can be accessed by healthcare providers to ensure better healthcare delivery.
2. Statement 2 is correct: The Ayushman Bharat Health Account (ABHA) is indeed a digital health ID that enables citizens to store and access their health records in a secure manner, helping in creating continuity of care.
3. Statement 3 is correct: The ABDM includes three key registries: the Ayushman Bharat Health Account (ABHA), Healthcare Professional Registry (HPR), and Health Facility Registry (HFR), as well as a drug registry. These help in linking health records and professional credentials within the digital health ecosystem.
4. Statement 4 is incorrect: ABDM is being implemented nationwide, not limited to urban areas. It covers all 36 States/UTs and 786 districts, ensuring the inclusion of rural areas as well, with initiatives to overcome barriers like limited digital literacy and internet connectivity.

Mains Model Question:

Discuss the key features and significance of the Ayushman Bharat Digital Mission (ABDM) in transforming India’s healthcare system. How does it ensure inclusivity, and what are its challenges in implementation?

The Ayushman Bharat Digital Mission (ABDM), launched in 2020, aims to revolutionize India’s healthcare system by creating an interoperable digital health ecosystem. Its primary objectives include the creation of longitudinal electronic health records for every citizen, ensuring continuity of care, and promoting digital health solutions. The key components of ABDM include the Ayushman Bharat Health Account (ABHA), Healthcare Professional Registry (HPR), Health Facility Registry (HFR), and Drug Registry.

The Ayushman Bharat Health Account (ABHA) is a unique digital health ID that allows citizens to store and share their health records with authorized healthcare providers, ensuring better and more efficient medical care. As of February 2025, over 73.98 crore ABHAs have been created, with more than 49 crore health records linked. Additionally, over 5.64 lakh healthcare professionals and 3.63 lakh health facilities are registered under ABDM, covering 786 districts across 36 States/UTs.

One of the core principles of ABDM is inclusivity. The mission’s design ensures that health services are available even in remote and rural areas through telemedicine and digital interventions. It provides multilingual and user-friendly portals and apps like the ABHA app and Aarogya Setu app, making it accessible to people with varying levels of digital literacy. Moreover, ABDM supports offline registration and assisted modes in regions with limited internet access, ensuring no one is left behind.

However, the implementation faces challenges. The digital divide remains a concern, with rural areas still struggling with internet connectivity and digital literacy. Additionally, ensuring data security and privacy, managing the integration of disparate health data systems, and overcoming infrastructure gaps in some regions are ongoing hurdles.

In conclusion, ABDM is a transformative step toward universal health coverage in India, enhancing accessibility, quality of care, and efficiency in the healthcare sector. Addressing implementation challenges will be crucial for realizing its full potential.

Topic : U.S. Tariffs on Steel and Aluminium

Relevance : GS Paper 3 International Trade, Economy

Source : The Hindu

Context :

Between 2018 and the present day, the stance of the U.S. on steel and aluminium tariffs has evolved significantly, reflecting changes in global trade dynamics, political shifts, and diplomatic negotiations. Here is a breakdown of the key developments from 2018 to date:

2018 – 2019: Initial Imposition and Trade Wars

• 2018: President Trump initially imposed 25% tariffs on steel and 10% tariffs on aluminium imports, citing national security concerns under Section 232 of the Trade Expansion Act of 1962. His administration argued that the U.S. steel industry was vital for national defense and economic security, and the tariffs were seen as a means to protect domestic manufacturing from unfair competition, particularly from China and other countries with overcapacity in production.
• 2018-2019: As expected, the tariffs sparked retaliatory actions from major trading partners, most notably China. The U.S. imposed tariffs on Chinese goods worth $250 billion, and China retaliated with tariffs on U.S. goods. This led to a broader trade war between the two nations.
• Impact on Canada and Mexico: Despite the U.S.’s close trade ties with Canada and Mexico, both countries were initially subjected to the tariffs. This was part of a broader negotiation strategy around the North American Free Trade Agreement (NAFTA), which was subsequently renegotiated into the United States-Mexico-Canada Agreement (USMCA). As part of this new agreement, both Canada and Mexico were granted exemptions from the tariffs on steel and aluminium in 2019.

2020 – 2021: Ongoing Impact and Adjustments

• 2020: The Trump administration continued to defend the tariffs, claiming they were necessary for reviving U.S. manufacturing and ensuring national security. However, by this time, the tariffs had led to higher costs for American consumers and manufacturers, particularly in industries such as automotive and construction.
• 2021: The Biden Administration, which took office in January 2021, signaled a shift in trade policy, particularly in relation to the tariffs imposed by the previous administration. While President Biden acknowledged the need to protect U.S. industries, there was increasing recognition that the tariffs were causing negative economic impacts, especially on industries that relied on steel and aluminium imports.

2021 – 2023: Biden Administration’s Shift in Approach

• 2021: The Biden administration sought to address the trade tensions created by Trump’s tariffs. In response to growing pressure from U.S. businesses and trading partners, the Biden administration began reviewing the tariffs and engaged in discussions with key allies, including the European Union and Japan. In 2021, the U.S. and the EU agreed to suspend certain tariffs related to steel and aluminium, while working together to address global overcapacity in these sectors.
• 2022: The U.S. and the European Union reached a deal that allowed for tariff-free quotas on steel and aluminium imports from the EU, which were initially hit with tariffs under Trump’s trade policies. The U.S. also continued to engage with other countries like China, pushing for greater trade concessions in other areas, such as intellectual property and market access.

2023 – Present: Ongoing Adjustments and Diplomacy

• 2023: The Biden administration continued to phase out some of the more aggressive trade policies of the Trump era, especially as the global economy faced disruptions caused by COVID-19, supply chain challenges, and inflationary pressures. The focus shifted to multilateral diplomacy, with an emphasis on addressing global steel overcapacity and ensuring that U.S. tariffs did not disproportionately harm American consumers and businesses.
• 2023-2024: The Biden administration also worked on strengthening its economic relationships with allies, such as through the Indo-Pacific Economic Framework and addressing issues of trade fairness with China. The tariffs on steel and aluminium remained in place but were subject to regular reviews and were often viewed as leverage in broader trade negotiations.

Impact of the Stance Over Time:

1. U.S. Domestic Industry: While some U.S. industries, like steel manufacturers, benefited from the tariffs, others, including the automotive and construction sectors, faced rising costs due to the increased price of steel and aluminium. The impact on jobs was mixed, with some jobs in the steel industry preserved but overall economic efficiency hindered.
2. Global Trade Relations: The tariffs strained relations with key allies, especially Canada, Mexico, and the European Union, but also strengthened alliances in certain areas, particularly with the EU through the negotiated tariff reductions.
3. China: The U.S. continued its hardline stance on China, even as it sought to negotiate and reduce the tariffs as part of broader trade talks. While some progress was made in addressing issues like intellectual property and forced technology transfers, steel and aluminium tariffs remained a contentious issue between the U.S. and China.

From 2018 to the present, the U.S. stance on steel and aluminium tariffs has evolved from a unilateral, protectionist approach under Trump to a more multilateral and negotiation-driven strategy under Biden. Although the tariffs remain in place in some form, ongoing diplomatic efforts have sought to balance the protection of domestic industries with the need for global cooperation and trade fairness. The long-term impact of these tariffs on the U.S. economy will depend on the ability to address global overcapacity in steel production and the extent to which trade partners and industries adapt to the changing economic landscape.

Prelims Practice Question:

Consider the following statements regarding the U.S. tariffs on steel and aluminium imports:

1. President Donald Trump initially imposed tariffs of 25% on steel and 10% on aluminium imports in 2018, citing national security concerns under Section 232 of the Trade Expansion Act.
2. The tariffs were initially applied only to imports from China and were not extended to any other country.
3. The Biden administration has fully removed the tariffs on steel and aluminium imposed by the Trump administration.

Which of the above statements is/are correct?

A) 1 and 2 only
B) 1 and 3 only
C) 2 and 3 only
D) 1 only

Answer: A) 1 and 2 only

Explanation:

1. Statement 1 is correct: In 2018, President Trump imposed 25% tariffs on steel and 10% tariffs on aluminium imports, citing national security concerns under Section 232 of the Trade Expansion Act of 1962.
2. Statement 2 is incorrect: While the tariffs were initially aimed at China, they were also imposed on other countries, including Canada, Mexico, and members of the European Union, leading to trade tensions with many of the U.S.’s key allies.
3. Statement 3 is incorrect: While the Biden administration has reviewed and adjusted some of the tariffs, they have not fully removed them. Instead, they have worked with trading partners like the European Union to reduce or exempt certain tariffs, but tariffs on steel and aluminium remain in place for some countries.

Mains Model Question:

“The imposition of tariffs on steel and aluminium by the U.S. has had significant global trade implications.” Discuss the rationale behind these tariffs, their impact on international relations, and the stance of India in this context.

The U.S. imposition of tariffs on steel and aluminium imports, initiated by President Donald Trump in 2018, was primarily justified under the guise of national security concerns, citing the provisions of Section 232 of the Trade Expansion Act of 1962. Trump argued that over-reliance on foreign metals, particularly from countries like China, posed a threat to U.S. defense capabilities. This move led to a 25% tariff on steel and 10% on aluminium imports, which was expanded to include not just China but also other major trading partners like the European Union, Canada, and Mexico.

The rationale behind these tariffs was twofold: first, to address the growing trade imbalances, particularly with China, and second, to protect domestic industries, aiming to revive the struggling U.S. steel and aluminium sectors. However, these tariffs sparked retaliatory measures from affected countries, resulting in a global trade war. Countries like China, the EU, and Canada imposed tariffs on U.S. products, escalating tensions and disrupting the global supply chain.

India, as a key steel exporter, strongly opposed the U.S. tariffs, deeming them unjustified and contrary to the rules of the World Trade Organization (WTO). India filed a complaint with the WTO, seeking relief and challenging the legality of the tariffs. Despite being initially exempt from the tariffs, India has expressed concern over the broader implications of such trade protectionism, especially in sectors like steel, where India holds a significant export share.

The U.S. stance on tariffs, especially under Trump’s administration, shifted global trade dynamics, creating new challenges for countries like India and others. While the Biden administration has re-examined these tariffs, certain measures remain in place, highlighting the enduring nature of trade protectionism in contemporary global politics.