Recent U.S. sanctions on Russian energy and renewed engagement with Venezuelan oil reflect growing concerns over de-dollarisation and shifts in global oil-financial power from the Petrodollar System.

About the Petrodollar System

• The petrodollar system refers to the global practice of pricing and settling international oil trade primarily in U.S. dollars.

• This system has linked energy markets with global finance, making oil not just a commodity but a pillar of international monetary power.
• Origin: The system emerged in the early 1970s after the collapse of the Bretton Woods system.
  • Following negotiations between the United States and Saudi Arabia, oil-exporting countries agreed to price crude oil exclusively in U.S. dollars in exchange for American security guarantees and financial access.
  • This arrangement soon became the global norm through the Organization of the Petroleum Exporting Countries (OPEC).
• Current Use: Even today, a large share of global oil trade is settled in dollars, sustaining constant international demand for the U.S. currency. 
  • Globally, around 80% of oil trade remains in dollars  allowing  the United States to finance large fiscal and current account deficits and exercise geopolitical influence through sanctions and financial controls.

Current Scenario in the Global Oil Market

The global oil market is undergoing significant structural changes driven by geopolitics, technology, and energy transition.

• Geopolitical Fragmentation: Fragmentation has intensified after the Russia–Ukraine conflict.
  • Western sanctions on Russian oil disrupted traditional supply chains, forcing buyers such as India and China to seek discounted crude through alternative settlement mechanisms.
• Changes in Oil Quality :  The oil quality is reshaping trade flows. 
  • The United States produces mainly light sweet shale oil, while many of its refineries are designed for heavy sour crude. 
  • This explains continued U.S. interest in Venezuelan and Canadian oil despite energy abundance.
• Market Volatility: Supply uncertainty has increased due to conflicts in West Asia, OPEC+ production decisions, and climate-related disruptions.
  • These factors have made oil markets more politically sensitive.
• Energy Transition: Recent focus on non-fossils energy sources is altering long-term demand expectations.
  • Rapid growth in electric vehicles, especially in China, is gradually weakening future oil demand growth while simultaneously shifting industrial and technological leadership.
• Greater State Intervention: With governments using strategic reserves, export controls, and sanctions to influence markets, reducing the role of purely market-driven price discovery.

De-dollarisation of Oil Economy 

The dominance of the petrodollar is increasingly being questioned due to multiple coordinated and uncoordinated global developments.

• Non-dollar Oil Trade by Major Economies:  Russia has increasingly accepted payments in rubles and yuan for its oil exports following Western sanctions.
  • China has expanded yuan-denominated oil contracts, particularly with Russia and some Gulf suppliers.
• BRICS-led Financial Initiatives: BRICS nations have discussed alternative payment systems, local currency trade, and even a potential common settlement mechanism to reduce dependence on the U.S. dollar.
• Bilateral Currency Arrangements: India has experimented with non-dollar mechanisms for settling oil imports, including rupee-based trade frameworks and third-currency settlements, particularly for discounted Russian crude.
  • The Reserve Bank of India (RBI) established a formal framework for international trade settlement in INR in July 2022.
  • This is also a step towards Internationalisation of Indian Rupee.
• Weaponisation of the Dollar through Sanctions: Extensive U.S. use of financial sanctions against Iran, Russia, and Venezuela has incentivised countries to build parallel payment systems such as China’s Cross-Border Interbank Payment System (CIPS).
• Rise of Multipolar Energy Markets: The diversification of oil suppliers, growth of spot markets, and regional energy hubs are weakening the monopoly of any single currency in oil trade.

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Conclusion

The petrodollar system is gradually weakening amid geopolitical fragmentation, de-dollarisation efforts, and energy transition, with oil increasingly shaped by currency politics as much as by market fundamentals.

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The Karnataka Border Area Development Authority (KBADA) has demanded that linguistic minority areas in Kasaragod district (Kerala) be explicitly excluded from provisions of the Malayalam Bhasha Bill, 2025, which mandates Malayalam as the compulsory first language in schools.

• Earlier, The Karnataka government had formally urged the Kerala Governor to reject the Bill,  alleging that it is unconstitutional and violates the linguistic rights of Kannada-speaking minorities, particularly in Kasaragod district of Kerala.

Key Provisions of the Malayalam Bhasha Bill

• Official Language Status: The Bill formally adopts Malayalam as the official language of Kerala for use in government, education, judiciary, public communication, commerce, and the digital domain, subject to constitutional provisions.
• Language Mandate in School: Malayalam will be the compulsory first language in all government and aided schools up to Class 10.
  • Presently, the State recognises both English and Malayalam as official languages.
• Judiciary and Legislature: 
  • Judgments and court proceedings will be translated into Malayalam in a phased manner.
  • Bills and Ordinances will be introduced in Malayalam.
  • Important Central and State Acts, currently published in English, will be translated into Malayalam.
• Digital and IT Integration: The Information Technology Department will develop open-source software and tools to facilitate the use of Malayalam in the IT sector.
• Institutional Framework: 
  • Renaming of the Personnel and Administrative Reforms (Official Language) Department as the Malayalam Language Development Department.
  • Creation of a Malayalam Language Development Directorate under the department.

Contested Provisions of the Bill

• Compulsory First Language: Section 2(6) of the Bill mandates Malayalam as the compulsory first language in all government and aided schools up to Class 10 across Kerala.
• Article 350 and 350A: Karnataka argued that it is the constitutional duty of the State to provide facilities for instruction in the mother tongue at the primary stage for linguistic minorities.
• Violation of Minority Rights: The petition alleged violations of Articles 30, 347, 350, 350A and 350B, which collectively safeguard linguistic minority rights.
• Forcible Language Imposition: Karnataka stated that acceptance of the Bill would lead to coercive language learning, infringing constitutional protections.
• Impact on Minority Students: Kannada-speaking students in Kasaragod, who currently study Kannada as their first language, may be forced to learn Malayalam.
• Historical Precedent: A similar Bill (Malayalam Language (Dissemination and Enrichment) Bill, 2015,  passed in 2017 was earlier rejected by the President, strengthening Karnataka’s argument.
  • Under Article 200, the Governor may: Give assent or Withhold assent or Reserve the Bill for the consideration of the President.

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Core Demand of Karnataka Border Area Development Authority

• Explicit Exemption Sought: KBADA demanded that Kannada-speaking linguistic minority areas in Kasaragod be explicitly exempted from the compulsory Malayalam first-language requirement.
• Retention of Kannada: The Authority insisted that Kannada must be allowed to remain the first language in these minority-dominated areas.

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The Financial Intelligence Unit–India (FIU-IND), under the Ministry of Finance, has issued updated guidelines to strengthen regulatory oversight of cryptocurrency and Virtual Digital Asset (VDA) entities operating in India.

• The directives also discourage Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs), equivalent to IPOs in stock markets, by the exchanges.

Key Highlights of the Guidelines

• Mandatory Registration: 
  • All crypto exchanges must register with the FIU as Reporting Entities (REs).
  • Exchanges must submit Suspicious Transaction Reports (STRs) and maintain detailed records of clients and transactions to identify illicit financial activities.
• Principal Officer (PO): Every VDA Reporting Entity must appoint a Principal Officer (PO) mandatorily.
  • Role and Responsibility: Overall responsibility for Anti-Money Laundering (AML); Countering Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) compliance.
• Cybersecurity and Data Protection Norms: VDA service providers must obtain a Cyber Security Audit Certificate from a CERT-In empanelled auditor.
  • Certificate must confirm compliance with CERT-In Directions and applicable cybersecurity frameworks.
• Unhosted Wallet and Peer-to-Peer Transactions: Reporting entities must collect information related to unhosted wallet transfers.
• Enhanced KYC Requirements: 
  • Exchanges must mandatorily collect Permanent Account Number (PAN), Selfie with liveness detection to verify physical presence and Geo-Tagging.
  • Account Verification: Client bank accounts must be verified using the ‘penny-drop’ mechanism.
    • ‘Penny-Drop’ Bank Account Verification: A refundable ₹1 transaction is credited to confirm ownership and operational status of the bank account.

Regulatory Authority and Legal Basis

• Legal Framework: Guidelines are issued under the Prevention of Money Laundering Act (PMLA).
• Status of Crypto: Cryptocurrencies are not legal tender in India, but are taxed under the Income-Tax Act.
  • VDAs are defined under Section 2(47A) of the Income-tax Act, 1961

Why Was There a Need to Update the Crypto Guidelines?

• Rising Risk of Money Laundering and Terror Financing: Increased use of cryptocurrencies for anonymous, cross-border transactions raised concerns regarding money laundering, terror financing and proliferation financing.
• Regulatory Gaps in a Rapidly Evolving Sector: Expansion of VDA activities such as peer-to-peer transactions, unhosted wallets and offshore exchanges creates gaps in monitoring and enforcement under the existing framework.
• Alignment with FATF Recommendations: The update was necessary to align India’s crypto regulatory regime with FATF AML/CFT standards, including enhanced KYC norms, reporting obligations and the Travel Rule.
• Ensuring Effective Oversight Post-PMLA Inclusion: After VDA service providers were notified as Reporting Entities under PMLA in 2023, detailed operational guidelines were required to ensure uniform compliance and effective supervision.

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About Financial Intelligence Unit – India (FIU-IND)

• Nature: FIU-IND is the central national agency responsible for handling financial intelligence related to suspicious transactions.
  • The FIU acts as the single-point regulator for cryptocurrency exchanges in India.
• It plays a vital role in countering money laundering and financing of terrorism, both domestically and internationally.
• Establishment: It was established in November 2004 by the Government of India by an order. ((Not a statutory body)
• Governance: It functions as an independent body, directly reporting to the Economic Intelligence Council (EIC) chaired by the Union Finance Minister

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The Supreme Court of India has urged the Union government to consider introducing a “Romeo–Juliet clause” in the Protection of Children from Sexual Offences (POCSO) Act.

Case Background

• The judgment arose from an appeal filed by the State of Uttar Pradesh against an Allahabad High Court order granting interim bail.
• The High Court had relied on wide inconsistencies in the victim’s age as reflected in school records and her own statements regarding age and intimacy.

Supreme Court’s Observations on POCSO Abuse

• Weaponisation of Law: The court warned that a law enacted with “noble intent” is being used to “settle scores” and exact revenge.
• Judicial Alarm: Courts have repeatedly sounded alarm over the misuse and misapplication of POCSO
• Familial Opposition: The law is often invoked by families seeking to disrupt relationships they oppose, rather than to protect against abuse.
• Two Contrasting Realities: 
• • Child survivors of heinous sexual offences remain “silenced by fear” and constrained by poverty and stigma.
  • Privileged families with literacy, social and monetary capital are able to manipulate the law.

What is the Romeo–Juliet Clause ?

• Origin: First developed in the United States and parts of Europe.
• Purpose: A legal exemption to decriminalise consensual sexual activity between adolescents close in age, without lowering the age of consent.
• Core Objective: 
  • Retain a strong child-protection law while preventing its distortion into a tool of over-criminalisation
  • Intended to prevent criminal prosecution for statutory rape in cases of consensual, age-proximate relationships

Age of Consent

• The age of consent refers to the legally prescribed age at which an individual can validly agree to sexual activity. 
• In India, this age is 18 years, as mandated under the POCSO Act, 2012, Indian Penal Code (IPC), and the Bharatiya Nyaya Sanhita (BNS), 2023.

Key Trends and Data

• Early Sexual Experience: According to NFHS-4, nearly 39% of Indian girls reported having their first sexual experience before the age of 18, indicating a gap between social realities and legal thresholds.
• Nature of POCSO Cases: Studies conducted by Enfold and Project 39A (2016–2020) revealed that around 25% of POCSO cases involved consensual adolescent relationships, rather than instances of sexual abuse or exploitation.
• Changing Case Patterns: A growing number of POCSO cases reflect parental opposition to teenage romantic relationships, highlighting the increasing use of criminal law to regulate adolescent behaviour rather than to address coercive crimes.

Existing Legal Framework

• Under POCSO Act, IPC Section 375, and BNS Section 63, any penetrative sexual act involving a person below 18 years attracts stringent punishment.
• Section 6, POCSO Act, Section 9, Prohibition of Child Marriage Act, 2006, and provisions of IPC/BNS prescribe severe penalties, even in consensual cases.

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Law Commission’s Position (2023)

• Against lowering the age of consent.
• Recommended Approach: Adoption of “guided judicial discretion” during sentencing in cases involving children aged 16–18 years engaged in voluntary, consensual relationships.

Judicial Recommendations

• Madras High Court (2021): Vijayalakshmi vs State Rep.: 
  • Suggested that in consensual adolescent relationships, the age difference should not exceed five years.
  • Legal Literacy: Adolescents must be educated about sexual offence laws and consequences.

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The Prime Minister paid homage to Swami Vivekananda on his birth anniversary. 

About National Youth Day (12th January)

• National Youth Day is observed annually on 12 January to commemorate the birth anniversary of Swami Vivekananda.
• First observed in 1985.
• Objective: To inspire youth, promote education, character-building, and community service.
• Nodal Ministry: Ministry of Youth Affairs and Sports (MYAS).
• Approach: Inter-ministerial collaboration to position youth as active partners, not passive beneficiaries of development.
• The occasion highlights India’s youth-centric policies, recognising that over 65% of India’s population is below 35 years, positioning youth as the backbone of Viksit Bharat @2047.

About Swami Vivekananda (1863 – 1902)

• Birth and Early Life: Swami Vivekananda was born as Narendra Nath Datta on 12 January 1863 in Calcutta (now Kolkata) into a Bengali Kayastha family.
• Guru: Sri Ramakrishna Paramahansa
• Adopted name: ‘Vivekananda’ in 1893 at the request of Maharaja Ajit Singh of Khetri
• Netaji Subhas Chandra Bose: Described him as the “maker of modern India”
• Death: Vivekananda passed away on 4 July 1902 at the age of 39 at Belur Math, West Bengal.

Vision of Religion and Spirituality

• Synthesis of Thought: Combined Sri Ramakrishna’s spiritual insights with Advaita Vedanta.
• Religion as Science of Consciousness: He viewed religion as a universal, experiential realization of truth.
• Universal Religion: Free from superstition, dogma, intolerance, and priestcraft.
• Goal of Life: Attainment of supreme freedom, knowledge, and happiness.
• Path to Self-Realisation: Emphasised selfless work (Karma Yoga), devotion, and mental discipline to realise the divinity of the soul.

Ethical and Social Philosophy

• Ethical Theory: Swami Vivekananda proposed an ethics based on the intrinsic purity and unity of the Atman.
• Moral Principle: He believed morality flows from the realization that all beings are one in Brahman.
• Service Ethos: Love, compassion, and service to humanity were central to his moral vision.
• Education: He stressed the importance of secular education for economic upliftment and spiritual education for moral strength.
• Antyodaya: He asserted that true development is achieved only when the last and poorest person is uplifted.

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Major Contributions and Institutions

• Chicago Address (1893): His speech at the World’s Parliament of Religions emphasized universal brotherhood and tolerance.
• Ramakrishna Mission: He founded the Ramakrishna Mission in 1897 to blend spirituality with social service.
• Vedanta Society: He established the Vedanta Society of New York in 1894 to spread Indian philosophy abroad

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Operation Hawkeye Strike

Context: The United States has launched extensive airstrikes across Syria as part of Operation Hawkeye Strike, aiming at multiple Islamic State (ISIS) targets.

Operation Hawkeye Strike

• Background: Operation Hawkeye Strike is a U.S.-led military campaign launched after an ISIS-linked attack in Palmyra, Syria, which killed two U.S. soldiers.
• Name: The operation is named after US State Iowa’s nickname, “Hawkeye State”, honoring the fallen soldiers.

Recent U.S. Military Operations

• Operation Southern Spear:
  • Location: Red Sea–Gulf of Aden region
  • Parties: United States, UK, allied naval forces vs Houthi rebels (Yemen)
  • Purpose: Precision air & naval strikes to deter Houthi attacks on commercial shipping and ensure freedom of navigation.
• Operation Absolute Resolve:
  • Location: Syria & Iraq border regions
  • Parties: United States and coalition forces vs ISIS
  • Purpose: Targeted airstrikes and special-forces actions to dismantle ISIS leadership, logistics, and sleeper cells.
• Operation Midnight Hunter: 
  • Location: Syria
  • Parties: United States Special Operations Forces vs ISIS leadership
  • Purpose: Night-time precision raid aimed at eliminating high-value ISIS operatives and disrupting command structures.
• Operation Prosperity Guardian:
  • Location: Red Sea
  • Parties: United States-led multinational naval coalition
  • Purpose: Protect international maritime trade routes from missile and drone threats.

Weimar Triangle

Context: India has participated for the first time in the Weimar Triangle format which is a significant milestone in its deepening ties with Europe.

• External Affairs Minister S. Jaishankar joined an extended meeting in Paris with the foreign ministers of France, Germany, and Poland.

About the Weimar Triangle

• The Weimar Triangle is a trilateral political and diplomatic regional alliance and forum for coordination between Germany, France, and Poland. 
• Establishment: Founded on 28 August 1991 in Weimar, Germany, through a joint declaration by the three countries. 
• Primary Goal: To support Poland’s (and later, other Central European states’) integration into NATO and the European Union after the fall of communism. 
• It aimed to overcome historical divisions and build a “European core.”
• Recent Revival and Significance (post-2022): Largely dormant during the 2010s (especially under Poland’s previous government), but revived strongly after Russia’s full-scale invasion of Ukraine in 2022.  
• • Has become a key format for coordinating support to Ukraine, sanctions against Russia, European defense strengthening, and deterrence on NATO’s eastern flank.

Catastrophe Bonds

Context: Kerala has urged the Union Government to introduce catastrophe bonds (CAT bonds) as a financial safeguard against losses from natural disasters. 

• Kerala has faced frequent and severe natural calamities in recent years, especially during monsoons, including devastating floods and landslides.

What Are Catastrophe Bonds (CAT Bonds)?

• CAT bonds are insurance-linked securities that transfer disaster-related financial risks from the issuer (e.g., government or insurer) to investors in the capital markets.
• Features of CAT Bonds: 
• • Investors buy the bonds and provide funds (principal).
  • If no major disaster occurs during the bond term, investors receive their principal back plus high interest.
  • If a qualifying catastrophe triggers the bond (based on predefined criteria like loss thresholds), part or all of the principal is used for relief — investors bear the loss.
• Significance: This innovative structure provides quick, collateralized funding without relying solely on government budgets.
• Global Examples: Countries like Mexico and the Philippines already use CAT bonds successfully to protect against earthquakes, hurricanes, and other perils.

Key Benefits of Catastrophe Bonds

• Enables rapid access to funds post-disaster without immediate fiscal strain.
• Shifts risk to global capital markets, reducing pressure on state/central finances.
• Offers multi-year protection, unlike traditional insurance which can be expensive or limited.

Other Types of Bonds Prevalent in Capital Market

• Green Bonds: Debt instruments used to finance climate-friendly projects like renewable energy, energy efficiency, and pollution control.
  • In India, issued by entities like SBI, IREDA; aligned with India’s climate commitments (NDCs).
• Blue Bonds: Bonds raised to support sustainable ocean and water-related projects such as fisheries, marine conservation, and wastewater management.
  • Promote the blue economy and conservation of coastal and marine ecosystems.
• Masala Bonds: Rupee-denominated bonds issued overseas by Indian entities to raise foreign capital.
  • Reduce currency exchange risk for Indian issuers; first issued in 2014.
• Agri Bonds: Issued to finance agricultural infrastructure, irrigation, storage, and rural development.
  • Support farm credit flow and long-term investment in the agri-sector.
• Municipal Bonds: Issued by Urban Local Bodies (ULBs) to fund urban infrastructure like water supply and transport.
• Sustainability Bonds: Combine objectives of green and social bonds (environmental protection and social welfare).
  • Used for projects like clean energy and affordable housing.
• Social Bonds: Funds raised for social projects such as health, education, housing, and employment generation.
  • Gained importance during COVID-19 recovery financing.
• Infrastructure Bonds: Long-term bonds issued to finance roads, railways, power, and ports.
  • Offer stable returns and support India’s National Infrastructure Pipeline (NIP).

Param Shakti Supercomputing Facility

Context: India has inaugurated its first fully domestically developed supercomputing system, named ‘Param Shakti’, at IIT Madras. 

About Param Shakti

• Param Shakti is a 3.1-petaflop supercomputer, meaning it can perform over 3.1 quadrillion calculations per second. 
• Developed by: The Centre for Development of Advanced Computing (C-DAC).
• Key Components: Built using C-DAC’s indigenously developed RUDRA server series and runs on an open-source software stack (including AlmaLinux).
• Funding: Part of the National Supercomputing Mission (NSM).
• Purpose: The supercomputer is designed to empower India’s research community by enabling complex, large-scale simulations and computations.
• Key Research Areas: Aerospace engineering, materials science, climate modelling, drug discovery, and advanced manufacturing.

National Supercomputing Mission (NSM)

• A flagship initiative of the Government of India launched to strengthen the country’s High-Performance Computing (HPC) capabilities.
• Aims: To build a robust supercomputing ecosystem, promote research, innovation, and self-reliance in HPC technologies.
• Launch: Launched in 2015.
• Nodal Ministry: Jointly by the Ministry of Electronics and Information Technology (MeitY) and the Department of Science and Technology (DST).
• Implemented By: Centre for Development of Advanced Computing (C-DAC), Pune, and the Indian Institute of Science (IISc), Bengaluru.

Indigenous Technologies and Key Systems Developed in NSM

• PARAM series supercomputers (e.g., PARAM Shivay – first indigenously assembled, PARAM Pravega at IISc, PARAM Rudra series).
  • PARAM 8000 was the first supercomputer developed in India, built by the Centre for Development of Advanced Computing (C-DAC) and released in 1991.
  • PARAM stands for “PARAllel Machine” and also means “supreme” in Sanskrit.
• Rudra servers: Indigenously designed HPC servers manufactured in India, at par with global standards.
• Trinetra: Indigenous high-speed interconnect network (deployed in phases up to 100–200 Gbps).
• PARAM Shavak: Supercomputing-in-a-box for educational institutions.
• Flagship systems like AIRAWAT (AI-focused, ranked globally).

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