2 March 2026

• West Asia: Day 3 of the US-Israel offensive on Iran. Brent crude surged to $79.15 a barrel. India's financial markets fell sharply: Nifty down 1.24 per cent, rupee at ₹91.49.
• Economy: IIP for January 2026 came in at 4.8 per cent growth, a three-month low. New GDP series (base 2022-23) showed India's economy is 3.3 per cent smaller in absolute terms than the old series indicated.
• Finance Commission: Debate intensified over the 16th Finance Commission's reduced effective transfer to states.
• Canada: India signed a 10-year uranium supply deal worth $1.9 billion, supporting nuclear capacity targets.
• Nepal: Elections scheduled for March 5 saw 60-plus parties and 3,000-plus candidates registered.

GS area: Economy, International Relations

Three days into the conflict, the financial transmission to India was measurable:

• Brent crude: Surged more than 8 per cent to $79.15 a barrel. Each $10 rise in crude prices adds roughly $12 to $14 billion to India's current account deficit annually.
• Market indices: The Nifty 50 fell 1.24 per cent. The Sensex dropped 1.3 per cent. India VIX, the volatility gauge, surged 23.54 per cent in a single session.
• Rupee: Fell 41 paise to ₹91.49 per US dollar. India imports over 85 per cent of its crude in dollars. A weaker rupee raises the landed cost of every barrel.
• Gold: Surged 3 per cent to $5,409.7 per troy ounce. Investors moved into safe havens.
• Indian diaspora: About 8.5 million Indians in Gulf countries, with evacuation planning underway for the most exposed.
• Operation Sankalp: This is the Indian Navy's Gulf security deployment, active since 2019. Two ships (a frigate and a destroyer) were on standby for HADR operations.

Static linkage: Indian Ocean security, energy economics (GS III).

GS area: Economy (national accounts)

The government released a new GDP series with base year 2022-23, replacing the 2011-12 series. Key changes:

• Growth rate: GDP growth for 2025-26 is pegged at 7.6 per cent in the new series, against 7.4 per cent in the old series. The new methodology captures recent economic activity better.
• Absolute size: The new series places India's GDP at ₹345.47 lakh crore. That is 3.3 per cent smaller than the figure in the old series. The $5 trillion economy target moves further away in dollar terms at current exchange rates.
• Methodology change: A "double deflator" method replaces the single deflator used earlier. It applies separate deflators to output and input, giving a cleaner measure of real value added.
• New data sources: GST filing data, the Annual Survey of Unincorporated Sector Enterprises (ASUSE), and the Periodic Labour Force Survey (PLFS) are now integrated into the national accounts.
• The MoSPI role: The Ministry of Statistics and Programme Implementation is India's national statistical agency. GDP estimates are released by MoSPI's National Statistics Office, not by the RBI or Finance Ministry.

Static linkage: Economic data, national accounts methodology (GS III).

GS area: Economy (industrial output)

The Index of Industrial Production for January 2026 was released on March 2. The numbers:

• Headline growth: 4.8 per cent, the lowest in three months. December 2025 had printed at 8 per cent.
• Manufacturing: 4.8 per cent growth. Manufacturing carries a weight of 77.6 per cent in IIP.
• Mining: 4.3 per cent growth.
• Electricity: 5.1 per cent growth.
• Consumer non-durables: Contracted 2.7 per cent. This is the sharpest signal of weak rural and mass-market demand.
• Infrastructure sector: Grew 13.7 per cent, the highest since August 2023. Capital goods also held up.

IIP is released by the Ministry of Statistics and Programme Implementation with a six-week lag. Its base year is 2011-12. The divergence between strong infrastructure output and contracting consumer goods is a K-shaped recovery pattern.

Static linkage: Industrial policy, economic indicators (GS III).

GS area: International Relations, Economy (energy, nuclear)

India and Canada signed a uranium supply agreement during Canadian PM Mark Carney's visit (February 27 to March 2, 2026):

• Deal terms: $1.9 billion for a 10-year supply of uranium from Cameco, Canada's state-linked mining company.
• India's nuclear target: 22 gigawatts of nuclear capacity by 2031. India has about 24 operational reactors with roughly 9 GW of installed capacity. Domestic uranium ore is low-grade (0.02 to 0.45 per cent). That makes foreign supply essential.
• Canada's position: The world's second-largest uranium producer, with about 13 per cent of global output.
• Legal framework: The deal falls under the India-Canada Civil Nuclear Cooperation Agreement signed in 2010.
• India's nuclear stages: Stage I uses PHWRs on uranium-235. Stage II will use fast breeder reactors fuelled by plutonium. Stage III will run advanced heavy water reactors on thorium. India holds 20 to 25 per cent of the world's thorium reserves.

The CEPA (Comprehensive Economic Partnership Agreement) negotiations between India and Canada were also given fresh momentum, with a target of concluding in 2026 and doubling trade to $70 billion by 2030.

Static linkage: Civil nuclear programme, India's energy mix (GS III, International Relations).

GS area: Economy (energy), International Relations

January 2026 oil import data showed a significant shift in India's supplier mix:

• Russia's share: Fell to 19.3 per cent of India's crude imports, the lowest in 44 months. At the peak in May 2025 it was 33 per cent.
• Indian imports from Russia: $1.98 billion in January 2026, also the lowest in 44 months.
• Gulf suppliers take over: Saudi Arabia (17.5 per cent), Iraq (16.6 per cent), and UAE (10.4 per cent) together exceed Russia's share now.
• The West Asia war changes this: With the Strait under threat, the very suppliers who reclaimed share from Russia are now themselves at risk. India faces a compressed set of options.
• Import IGST: Import IGST grew 17.2 per cent year-on-year in February, reflecting oil import value rising.

Static linkage: Import diversification, energy security (GS III).

GS area: Polity (judiciary), Health

The Supreme Court took up a case examining whether Nucleic Acid Testing should be mandatory in blood banks across India:

• What NAT does: NAT (Nucleic Acid Testing) detects HIV, Hepatitis B, and Hepatitis C by identifying viral genetic material. It reduces the window period from 2 to 6 weeks (under the older ELISA method) to just 7 to 10 days.
• The trigger: HIV was transmitted to children with Thalassemia in Satna (Madhya Pradesh) and Chaibasa (Jharkhand) through blood transfusions.
• Cost comparison: NAT costs ₹800 to 1,500 per test. ELISA costs ₹200 to 400. The gap is the policy obstacle.
• India's Thalassemia burden: India has the highest Thalassemia burden globally. Approximately 10,000 children with Thalassemia major are born in India every year. They require regular transfusions.

Static linkage: Public health, healthcare regulation (GS II).

GS area: Environment, Disaster management

A study on Bengaluru's recurring flood events introduced the concept of hydrological hysteresis:

• What it means: A landscape retains a "memory" of past rainfall. Soil saturated by earlier rain does not drain normally when a new storm arrives. The same rainfall intensity produces worse flooding than it would on dry ground.
• Bengaluru's specific problem: The city's historical lake system had about 300 interconnected lakes under Kempegowda's design. That network now has fewer than 80 functional lakes. Encroachment on storm water drains and lake beds destroys the drainage capacity that the system relied on.
• Kogilu and Doddabommasandra: These lakes overflowed in October 2024 triggering flash floods in residential areas built on the erstwhile floodplain.
• The governance problem: Storm water drains fall under the Bruhat Bengaluru Mahanagara Palike but encroachment regularisation is a state-level decision. The split accountability makes enforcement difficult.

Static linkage: Urban ecology, disaster risk reduction (GS I, GS III).

• Nepal election context: The March 5 elections for the 275-member House of Representatives (165 FPTP plus 110 proportional representation seats) drew 60-plus parties. The Rastriya Swatantra Party (RSP), founded only in 2022, and the National Unity Party (UNP) were challenging the traditional Nepali Congress and CPN-UML. New parties typically draw youth and anti-establishment votes in Nepal's first-past-the-post constituencies.
• Iran: JCPOA context: The Joint Comprehensive Plan of Action of 2015 was signed by Iran and the P5+1 group. The United States withdrew in 2018. The assassination of Ayatollah Khamenei on February 28 effectively ended any near-term prospect of revival. UN Charter Article 2(4) prohibits the use of force against the territorial integrity of any state.