30 January 2026: MAINS CURRENT AFFAIRS

MAINS Current Affairs includes India–Saudi Arabia: Deepening Security Partnership & Economic Survey 2025–26 – Key Highlights

International

1. India–Saudi Arabia: Deepening Security Partnership

Context

The 3rd India–Saudi Arabia Security Working Group meeting took place in Riyadh, reflecting growing strategic coordination between India and Saudi Arabia.

Key Highlights of the Security Dialogue

Focus Areas

Strengthening counter-terrorism cooperation, including new and emerging threat patterns.
Preventing radicalisation and violent extremism.
Cracking down on sources of terror financing.
Stopping the misuse of modern technologies for terrorist operations.
Addressing the overlap between organised criminal groups and terrorist networks.

Institutional Framework

The dialogue functions under the India–Saudi Arabia Strategic Partnership Council (SPC), providing structured, long-term coordination.

India–Saudi Arabia Relations

Political Relations

Diplomatic ties formalised in 1947.
Delhi Declaration (2006) initiated deeper engagement.
Riyadh Declaration (2010) upgraded relations to a strategic partnership.
The SPC Agreement (2019) established a high-level body to guide bilateral cooperation.

Economic Relations

India is Saudi Arabia’s 2nd-largest trading partner.
Saudi Arabia is India’s 4th-largest trading partner.
Bilateral trade reached USD 43.3 billion in 2023–24.
Saudi investments in India stood at USD 3.15 billion as of March 2022.

Energy Cooperation

Saudi Arabia was India’s 3rd-largest supplier of crude and petroleum products in FY23.
India imported 5 MMT of crude (16.7% of total imports).
India imported 85 MMT of LPG, accounting for 11.2% of its petroleum product imports.

Defence and Security Cooperation

A USD 250 million ammunition contract was signed with Munitions India Limited.
Saudi Arabia procured the 155 mm ATAGS artillery system from Bharat Forge.

Joint Military Exercises

Sada Tanseeq (2024) – first India–Saudi Army exercise in Rajasthan.
Tarang Shakti – Saudi Arabia joined as observer in India’s largest air exercise.
Al Mohed Al Hindi (2022) – bilateral naval exercise begun.

Indian Diaspora

About 7 million Indians lived in Saudi Arabia in 2025, forming the Kingdom’s second-largest expatriate community after Bangladesh.

Way Ahead

Balanced Regional Engagement

India should continue engaging Saudi Arabia along with other Gulf partners to preserve strategic autonomy while supporting regional stability.

Legal & Judicial Cooperation

Strengthen systems for extradition, mutual legal assistance, and intelligence exchange to tackle terror financing and organised crime.

Enhanced Security Coordination

Expand the mandate of the SPC-led Security Working Group to address cyber-terrorism, lone-wolf attacks, and digitally enabled radicalisation.

ECONOMY

2. Economic Survey 2025–26 – Key Highlights

Context

The Union Minister for Finance presented the Economic Survey 2025–26 in Parliament of India.

What is the Economic Survey?

It is the government’s annual report on the performance of the Indian economy, reviewing macroeconomic trends, sectoral developments, challenges, and policy priorities.
Prepared by the Economic Division of the Ministry of Finance under the Chief Economic Adviser.
Released annually just before the Union Budget.
Covers GDP, inflation, external sector, fiscal trends, agriculture, industry, services, public finance, human development, and special thematic chapters.

Highlights of the 2025–26 Survey

Global Outlook & India’s Growth Position

The global economy continues to remain subdued due to geopolitical tensions and fragmented trade flows.
India remains the fastest-growing major economy for the fourth year in a row, with FY26 real GDP growth estimated at 4%, and GVA projected at 7.3%, driven by strong domestic demand.

Demand Dynamics: Consumption & Investment

Private consumption grew by 0%, reaching its highest share of GDP (61.5%) since 2012; supported by low inflation, stable jobs, and improved rural/urban incomes.
Investment activity strengthened: GFCF rose 8%, maintaining a 30% share of GDP, backed by high public capex and renewed private investment commitments.

Sectoral Trends

Services Sector

Continues to be the main growth pillar with 3% GVA growth in H1 FY26 and 9.1% expected for the year; contributes 56.4% of GVA, driven by digital and tradable services.

Industry & Manufacturing

Industrial GVA rose 0% in H1; manufacturing growth accelerated to 7.7% in Q1 and 9.1% in Q2.
PLI schemes attracted over ₹2 lakh crore investments, produced ₹18.7 lakh crore of additional output, and generated 6 lakh jobs.

Fiscal Developments

Fiscal consolidation strengthened India’s macro-stability and led to three sovereign rating upgrades in 2025.
Centre’s revenue receipts increased to 2% of GDP; non-corporate taxes rose from 2.4% to 3.3% of GDP since the pandemic.
Income tax filers increased significantly—from 9 crore in FY22 to 9.2 crore in FY25.
Public capex grew sharply with effective capital expenditure reaching 4% of GDP; states were incentivised with targeted capital support.
India reduced general government debt-to-GDP by 1 percentage points since 2020.

Monetary & Financial Sector Performance

Banking sector strengthened: GNPA at 2%, NNPA at 0.5% (Sept 2025).
Credit growth improved to 5% YoY by Dec 2025.
Financial inclusion programs expanded: PMJDY (55 crore+ accounts), PMMY disbursed ₹36.18 lakh crore, and Stand-Up India/PM-SVANidhi boosted entrepreneurship.
Capital markets saw record participation: demat accounts reached 6 crore, with women accounting for nearly one-fourth of investors.
IMF–World Bank FSAP (2025) affirmed India’s financial system as resilient and well-capitalised.

External Sector

India’s share in global merchandise exports rose to 8%, and services exports to 4.3%.
Total exports in FY25 hit USD 825.3 billion, led by services.
CAD remained moderate at 3% of GDP (Q2 FY26).
Remittances climbed to USD 135.4 billion, highest in the world.
Forex reserves hit USD 701.4 billion, covering ~11 months of imports.
India ranked 4th globally in Greenfield FDI and first for digital Greenfield projects (2020–24).

Inflation

India recorded historic low CPI inflation at 7% (Apr–Dec 2025), driven by declines in food and fuel prices and effective supply-side action.
One of the steepest inflation reductions among emerging economies.

Agriculture & Food Management

Foodgrain output reached 7 MT in AY 2024–25.
Horticulture production surpassed foodgrains at 08 MT, comprising 33% of agri GVA.
Digital agriculture expanded via e-NAM, connecting 79 crore farmers.
Income support strengthened through MSP, PM-KISAN (₹4.09 lakh crore disbursed), and PM-KMY pensions.

Industry, Technology & Innovation

Industrial GVA rose 7%, manufacturing reached 13% (Q2) in FY26.
PLI catalysed large-scale domestic manufacturing.
India climbed to 38th rank in the Global Innovation Index (2025).
Semiconductor Mission cleared projects worth ₹1.6 lakh crore.

Human Capital: Education, Health & Skills

Education: 69 crore students, 14.71 lakh schools, and 70,018 higher education institutions; NEP reforms boosted flexible, skill-based learning.
Health: Maternal mortality fell 86% from 1990 levels; IMR dropped to 25; U-5 mortality reduced 78%.
Employment: 2 crore employed in Q2 FY26; organised manufacturing added 10 lakh jobs in FY24.
Social sector spending reached 9% of GDP (FY26 BE); e-Shram registered 31 crore workers.

Rural Development & Social Outcomes

Poverty declined under updated global metrics.
Rural asset creation, women-led development, and digital mapping strengthened grassroots productivity and participation.

Emerging Frontiers

AI adoption centred on low-cost, localised solutions across agriculture, healthcare, and governance.
Urban connectivity projects reshaped labour markets and eased metro congestion.
India moved from import substitution towards strategic resilience and deeper integration into global value chains.

Looking Ahead

India’s long-term strategy aims to progress from “import replacement” to global indispensability.
A disciplined domestic industrial policy, lower input costs, wide-scale AI adoption, and robust urbanisation frameworks are set to reinforce India’s transition from “buying Indian” to “buying Indian by default.”