World Affairs 

Who will win the tariff war? - Indian Express 

A full-scale trade war between the US and China is brewing, after American President Donald Trump threatened to impose tariffs of more than 100% on Chinese goods imports from April 9.

Key Issues and Implications

• Impact on Global Economy: A trade war would disrupt global trade and increase market volatility. It may lead to inflation in the US.
• Potential Trade Embargo: 100% tariffs would resemble a trade embargo, disrupting trade including rare earth elements and drug ingredients.
• US-China Trade Deficit: In 2024, US had a trade deficit of $295 billion with China, (imports from China increased by 2.8% & exports decreased by 2.9%).
• China’s Response: China has refused to back down, increasing its own tariffs on US goods, vowing to "fight to the end."
• Escalating Tariffs: US’ tariffs on Chinese goods escalated to 104% in April, making Chinese goods expensive in the US.
• Leverage: China has better long-term leverage due to its economic stability and internal stimulus measures.
• Impact on US Consumers: Higher tariffs on consumer goods from China would hurt American consumers as costs of everyday items increase.
• China’s Economic Strategy: China has the advantage of deeper domestic consumption and ongoing fiscal stimulus to weather the tariff war.
• US Disadvantage: The US faces limited fiscal resources and the possibility of increased pressure on administration due to rising costs for consumers.
• Challenges in Removing Tariffs: Once imposed, tariffs are difficult to remove.
• Long-term Effects: China’s retaliatory tariffs have had negative impacts on US employment and may lead China to seek new markets for its goods.

Economy 

Will aviation disputes be easier to resolve? - The Hindu

Parliament last week passed the Protection of Interests in Aircraft Objects Bill, 2025. 

Protection of Interests in Aircraft Objects Bill, 2025

• Objective:
  • To establish a legal framework to resolve disputes between airlines and lessors regarding high-value aviation assets.
  • To align India’s aviation laws with international standards to boost investor confidence amidst fleet expansion by airlines.
• Key Provisions:
  • Implements Cape Town Convention & Protocol: Provides a standardised process for transactions involving aviation assets.
  • Designation: Directorate General of Civil Aviation (DGCA) designated as Registry Authority for aircraft registration and de-registration.
  • Provides remedies in case of financial default: Allows lessors to repossess assets within two months.
• Legal Impact:
  • Addresses long-standing legal uncertainties: Addresses issues faced by international lessors and creditors in cases of airline insolvencies.
  • Resolves conflicts: Between domestic laws (like the Insolvency and Bankruptcy Code) and international standards.
  • Reduces financial risks for lessors: Enhances India's compliance with the Aviation Working Group’s Cape Town Convention Index.
• Reason for Introduction:
  • To overcome the challenges faced during airline shutdowns and disputes.
  • To provide legal clarity and reduce the financial burden on airlines.
  • To ensure smoother repossession of aircraft 
  • To prevent issues faced during GoFirst’s shutdown.
• Industry Response to the Bill:

• Welcomed for easing aircraft repossession disputes.
• Some state that factors like airline creditworthiness and order volume are more influential than the Bill itself.

• Impact on Airlines:
  • Claims of reduced leasing costs & lower airfares exaggerated: Executives assert that market demand and supply primarily influence ticket prices.
  • Expected to lower future business risks: Potentially improves airline net income.
• Concerns in the Leasing Industry:
  • Industry remains wary of India’s complex taxation regime.
  • Issues like IT notices for Special Purpose Vehicles (SPVs) and pressure to set up local operations in GIFT City raised.
  • Inconsistent taxation system is a deterrent for international lessors.
     

REPO RATE - Indian Express

The RBI’s six-member Monetary Policy Committee (MPC) recently decided to cut the repo rate by 25 basis points to 6%. The rate setting panel also changed the monetary policy stance from “neutral” to “accommodative”, signaling further reductions in the repo rate in the near future.

Repo Rate

• Definition: The interest rate at which commercial banks borrow money from the Reserve Bank of India (RBI).
• Reverse repo rate: Interest rate the RBI pays to commercial banks when they park their excess cash with the central bank.
• Current Rates:
  • Repo rate: 6%

• • Reverse repo rate: 3.35%

• Usage: To set the overall interest rate environment in the banking system and broader economy.
• Lower Repo Rate: Encourages borrowing and spending by reducing loan interest rates and deposit returns, stimulating economic activity.
• Higher Repo Rate: Discourages borrowing and spending by increasing loan interest rates, which helps control inflation by reducing money circulation.
• Benchmark Interest Rates: Repo and reverse repo rates are considered "benchmark" rates that guide other interest rates in the economy.
• Reason for reduction: Comes amid global economic uncertainty, particularly due to trade frictions and tariffs imposed by the US.

• Inflation for January-February 2025: Tracking at 3.9%, below the RBI’s projected rate of 4.8% for the fourth quarter of fiscal 2025.
   

Environment 

Nilgiri tahr - The Hindu

• Species Name: Nilgiri Tahr (also known as Nilgiri Ibex or Varaiaadu)
• State Animal: Tamil Nadu
• Significance: Mentioned in Tamil Sangam literature (Silapathikaram and Seevagasinthamani) over 2,000 years ago.
• Physical Feature: Adult males are called Saddlebacks due to a light grey patch on their backs.
• Unique Feature: Only mountain ungulate species in southern India.
• Endemic Region: Southern Western Ghats, primarily in Tamil Nadu and Kerala.

• Preferred Habitat: Tropical montane grasslands, Shola forests, and rocky high-altitude regions.
• Key Location: Largest population in Eravikulam National Park, Kerala.
• Adaptation: Thrives in cold, wet high-altitude environments; diurnal and stress-tolerant.

• IUCN Status: Endangered
• Wildlife Protection Act (WPA), 1972: Listed in Schedule-I for highest protection.
• Threats: Decline in population due to habitat loss and hunting.
• Population Estimate: 3,122 individuals (2015 WWF report), previously found throughout the Western Ghats.
   

As wildfires scorch the earth, the Arctic biome rejects more carbon - The Hindu

Multiple states in the U.S. were recently in the grip of tornadoes, wildfires, and dust storms. The fires that scorched parts of Texas and Oklahoma burnt through almost 300 homes, reliving the horrors a similar blaze inflicted on Los Angeles in January this year.

Wildfires in India

• Forest Fires:
  • Uttarakhand, Odisha, and Chhattisgarh saw the most forest fires in 2024. 
  • Uttarakhand alone recorded 5,315 fires from November 2022 to June 2023.
  • Fire hotspots in India have decreased slightly from 2.23 lakh in 2021-2022 to 2.03 lakh in 2023-2024.
• Rising Land Temperatures:
  • India’s land temperatures are rising by 0.1º-0.3ºC per decade in the pre-monsoon season and 0.2º-0.4ºC in the post-monsoon season.
• Carbon Emissions from Indian Forest Fires:
  • Forest fires in India emit around 69 million tonnes of CO2 annually, exacerbating climate change.

Arctic Carbon Sink Transformation

• Arctic Boreal Zone (ABZ):
  • Has transformed into a carbon source, with over 30% of the region now releasing carbon instead of absorbing it.
  • This shift is attributed to more frequent and intense wildfires and thawing permafrost due to global warming.
• Impact of Wildfires:
  • Wildfires in Alaska, northern Europe, and Siberia have significantly contributed to the release of CO2 in the ABZ.
  • The thawing of tundra permafrost accelerates the decomposition of organic materials, releasing more CO2 into the atmosphere.

Feedback Loop of Global Warming

• Dangerous Feedback Loop:
  • Wildfires burn through natural carbon reservoirs, releasing CO2 that further fuels global warming.
  • The warming climate creates more frequent and intense wildfires, perpetuating the cycle.
• Study Findings:
  • The Arctic’s carbon sink is now a carbon source, confirmed by the 2024 Arctic Report Card from NOAA.
  • The increasing intensity of wildfires and the thawing of permafrost are major factors in this transformation.
     

Sci and Tech 

‘De-extinction’: Has an American company brought the dire wolf back from the dead? - Indian Express 

A United States-based bioscience company recently claimed that it had revived an extinct species of animal, the dire wolf, made famous by the Game of Thrones TV series.

De-Extinction

• Definition: Scientific process of reviving extinct species using genetic material, primarily through gene editing and cloning techniques.
• Process: Involves reconstructing genome of an extinct species and modifying DNA of a closely related living organism to resemble extinct one.
• Scientific Process of De-Extinction:

• DNA Extraction: DNA was extracted from two ancient dire wolf specimens: a 13,000-year-old tooth and a 72,000-year-old skull.
• Genome Reconstruction: The extracted DNA was sequenced to recreate the complete genome.
• Gene Editing: 20 unique changes were made to 14 genes in the grey wolf genome to resemble that of the dire wolf.

• Surrogacy and Birth: Genetically modified embryos were implanted into surrogate dog mothers, resulting in the birth of pups.

The Dire Wolf

• Species: A large prehistoric canine that used to live in southern Canada and the U.S.
• Extinction: It became extinct around 13,000 years ago, likely due to the disappearance of its prey and human hunting activities.
• Characteristics: Larger than modern grey wolves, with thicker white coats, and hunted large prey like bison, horses, and mammoths.