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Current Affairs for 18 August 2026

India’s First Guide to Grasslands and Open Natural Ecosystems: Theme, Grasslands, Ecological significance and Key threats

Why in news

India launched its first-ever Guide to Grasslands and Other Open Natural Ecosystems (ONEs) of India on 17 August 2026 during the 17th Session of the Conference of the Parties (COP17) to the United Nations Convention to Combat Desertification (UNCCD) in Ulaanbaatar, Mongolia.

Key facts

Aspect

Details

Guide

First-ever Guide to Grasslands and Other Open Natural Ecosystems of India

Launch

17 August 2026

Venue

Ulaanbaatar, Mongolia

Event

UNCCD COP17

Theme

“Restoring Land, Restoring Hope”

Main focus

Grasslands and other naturally open ecosystems

Importance

Biodiversity + Climate + Livelihoods + Land Restoration

Major global framework

UNCCD

Key concept

Land Degradation Neutrality

Special 2026 connection

International Year of Rangelands and Pastoralists

What are Open Natural Ecosystems (ONEs)?

  • ONEs are landscapes that are naturally open or sparsely treed not degraded forests characterised by grasses, shrubs, and scattered trees, shaped over millennia by climate, soil, fire, and grazing rather than by deforestation.

Types of ONEs found in India

  • Himalayan and Terai grasslands: high-altitude and foothill grass ecosystems supporting unique fauna
  • Thar and Banni landscapes: arid and semi-arid grasslands/desert ecosystems of Rajasthan and Gujarat
  • Deccan savannas: tropical grass-and-tree mosaics of peninsular India
  • Rocky plateaus: lateritic and basaltic plateau grasslands (e.g., Western Ghats plateaus)
  • Ravines: eroded riverine badlands (e.g., Chambal ravines)
  • Scrublands: dry thorn-scrub ecosystems
  • Coastal ecosystems: coastal grasslands and open scrub
  • Desert landscapes: cold and hot desert open ecosystems

What is a Grassland?

  • A grassland is an ecosystem in which grasses and herbaceous plants dominate vegetation while trees are absent, scattered or relatively sparse.
  • Grassland structure depends upon rainfall, seasonality of rainfall, soil characteristics, temperature, fire, grazing and herbivory, topography, and water availability. 

Major Grasslands and Open Ecosystems of India

  • Thar Desert and Associated Grasslands
    • Region: Mainly Rajasthan and parts of Gujarat
    • Importance: Arid ecosystem, Desert biodiversity, Pastoralism, Habitat of the Great Indian Bustard, Important for understanding desertification and land degradation. 
    • Banni Grasslands
    • Location: Kutch, Gujarat
    • Importance: Pastoral livelihoods, Livestock grazing, Grassland biodiversity, Community-based resource use
    • Major issues: Salinity, Invasive species, Changes in grazing patterns, Land-use change
  • Terai Grasslands
    • Location: Himalayan foothills
    • Characteristics: Tall grasses, Floodplain environment, Seasonal wetlands, Grassland–forest mosaics
    • They provide habitat for several large mammals and birds.
  • Himalayan Grasslands
    • These occur across high-altitude Himalayan landscapes.
    • They are generally seasonal, high-altitude, climate-sensitive, important for pastoralism. 
    • Traditional communities may use these landscapes for seasonal livestock grazing.
  • Deccan Savannas
    • Region: Peninsular India
    • These landscapes are characterised by grasses, scattered trees, seasonal rainfall, fire, and herbivory
    • They demonstrate that not every naturally open landscape is a degraded forest.
  • Shola Grasslands
    • Region: High-elevation Western Ghats
    • They form a characteristic Shola Forest–Grassland Mosaic
    • Importance: Water regulation, Mountain hydrology, Endemic biodiversity, Climate regulation
  • Ravines
    • Ravines are deeply dissected landscapes generally associated with erosion. A major example is the Chambal Ravine landscape.
    • They can support specialised vegetation, riverine ecosystems, wildlife, and unique geomorphological features
  • Scrublands
    • Scrublands are generally dominated by shrubs and herbs.
    • They are common in dry regions, semi-arid regions, and water-stressed environments

Ecological and Socio-Economic Significance

  • Biodiversity: Support distinct, often endemic flora and fauna adapted to open habitats e.g., the Great Indian Bustard, blackbuck, wolf, caracal, and numerous grassland-specialist birds and insects that cannot survive in dense forest.
  • Carbon storage: Grasslands store substantial carbon below ground, in root systems and soil, making them significant and resilient (fire- and drought-tolerant) carbon sinks studies have estimated grassland soil carbon sequestration at roughly 146 tonnes per hectare per year, comparable to tropical forests.
  • Water and soil processes: Regulate groundwater recharge, prevent soil erosion, and maintain watershed health, particularly in arid and semi-arid zones.
  • Livelihoods: They sustain pastoral and agro-pastoral communities, livestock-rearing, and nomadic/transhumant tribes supporting an estimated 500 million livestock and about half of India's fodder production, along with the livelihoods of more than 20 nomadic pastoral communities.
  • Climate resilience: Being naturally drought and fire-adapted, ONEs offer a lower-cost, higher-resilience alternative to inappropriate afforestation in dry and semi-arid regions.

Key Threats to India's ONEs

  • Misclassification as “wastelands” nearly 70% of officially designated “wasteland” areas overlap with open natural ecosystems, exposing them to diversion for “development.”
  • Inappropriate afforestation drives planting trees on natural grasslands disrupts native ecology instead of restoring it
  • Land-use conversion intensive/expanding agriculture and infrastructure projects
  • Renewable energy expansion large solar and wind installations sited on open lands without ecological assessment
  • Overgrazing and loss of traditional pastoral rotation systems
  • Absence of a distinct legal/policy category unlike forests, ONEs have historically lacked a dedicated conservation and land-use framework in India

Related Schemes, Concepts and Terms

  • Land Degradation Neutrality (LDN): UNCCD/SDG target 15.3 to avoid, reduce and reverse land degradation
  • Bonn Challenge: global effort to restore degraded/deforested land, to which India has committed 26 million hectares
  • National Mission for a Green India (GIM): one of the eight missions under India's National Action Plan on Climate Change
  • Banni Grasslands (Gujarat): Asia's largest tropical grassland, threatened by Prosopis juliflora invasion
  • Great Indian Bustard: critically endangered grassland bird, flagship species for India's grassland conservation debate
  • Desertification and Land Degradation Atlas of India: published by ISRO, maps land degradation status across states
  • Rangelands: land used for grazing livestock/wildlife, largely overlapping with ONEs; focus of IYRP 2026

Relevant Indian Laws and Policies

Law/Policy

Relevance

Wildlife Protection Act, 1972

Wildlife and habitat protection

Environment Protection Act, 1986

Umbrella environmental legislation

Biological Diversity Act

Biodiversity conservation and sustainable use

National Biodiversity Action Plan

Biodiversity planning

Green India Mission

Ecosystem restoration

Land degradation programmes

Restoration and sustainable land management

National Livestock Mission

Livestock and fodder-related support

Rural employment programmes

Potential support for soil/water restoration

Significance for India

  • First formal policy recognition that grasslands and open ecosystems are not “wastelands” but distinct, valuable ecosystems
  • Provides a science-based framework to guide land-use planning, reducing indiscriminate afforestation or diversion of ONEs for infrastructure/renewable energy
  • Strengthens India's international climate and biodiversity diplomacy by showcasing indigenous ecosystem knowledge at a global platform
  • Supports livelihood security of pastoral and nomadic communities by recognising their traditional land-use systems
  • Aligns with India's broader commitments under UNCCD (Land Degradation Neutrality), CBD (30x30 target) and UNFCCC (carbon sequestration)

Way Forward

  • Formal legal/administrative recognition of ONEs as a distinct land-use category, separate from “wastelands” and forests
  • Satellite-based national mapping and periodic monitoring of ONEs (building on ISRO/SAC's technical role)
  • Integrating pastoral community rights and traditional grazing systems into conservation planning
  • Careful ecological screening before siting afforestation or renewable energy projects on open lands
  • Mainstreaming ONE conservation into India's Land Degradation Neutrality and Nationally Determined Contribution (NDC) targets 

Prelims MCQ

Q. Consider the following statements regarding Open Natural Ecosystems (ONEs) in India:

  1. ONEs include grasslands, savannas, scrublands, ravines and deserts.
  2. Nearly 70% of India's officially classified ‘wastelands’ overlap with ONEs.
  3. ONEs sequester negligible carbon compared to forests.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 only

(d) 1, 2 and 3

Mains Practice Question

Q. "India's conservation policy needs to move beyond a forest-centric approach." Discuss with reference to Grasslands and Open Natural Ecosystems.

FAQs

What are Open Natural Ecosystems (ONEs)?

Naturally open landscapes dominated by grasses, herbs or shrubs with limited tree cover.

What is UNCCD COP17?

The 17th UNCCD Conference focuses on land restoration, desertification, drought and sustainable land management.

Why are grasslands important ?

They support biodiversity, carbon storage, soil conservation, pastoralism and climate resilience.

Do grasslands store carbon?

Yes, mainly through extensive roots and soil organic carbon stored underground.

Which SDG is most relevant?

SDG 15 – Life on Land is most directly connected with grassland and biodiversity conservation.

India’s First Virtual Zoo in Indore: 14-D Cinema, Virtual Safari, and Technology

Why in news?

Indore, Madhya Pradesh, has introduced a new technology-driven attraction at the Kamla Nehru Prani Sangrahalaya (Indore Zoo) a virtual zoo featuring a 14-D cinema and virtual jungle safari.


Key Highlights

Feature

Details

Location

Indore, Madhya Pradesh

Venue

Kamla Nehru Prani Sangrahalaya (Indore Zoo)

Major attraction

Virtual/Digital Zoo

Special facilities

14-D Cinema & Virtual Jungle Safari

Inauguration

16 August 2026

Inaugurated by

CM Dr. Mohan Yadav

Development model

Public-Private Partnership (PPP)

Reported investment

Around 4.5 crore

What is a Virtual Zoo?

  • A virtual zoo uses technologies such as Virtual Reality (VR), 3D visuals, digital projections and interactive simulations to recreate wildlife habitats and animal experiences.
  • Unlike a conventional zoo, visitors do not necessarily observe live animals. Instead, they experience digitally created environments that can demonstrate:
    • Wildlife habitats
    • Animal behaviour
    • Forest ecosystems
    • Biodiversity
    • Conservation challenges
    • Human-wildlife interactions

14-D Cinema: An Immersive Experience

  • One of the major attractions is the 14-D cinema, which goes beyond conventional 2D and 3D viewing. The experience can combine visual content with physical and environmental effects such as:
    • Moving seats
    • Vibrations
    • Wind
    • Water or rain effects
    • Motion simulation
    • VR glasses
  • For example, while watching a virtual jungle journey, visitors may simultaneously experience movement, wind or other effects corresponding to what is happening on screen. This makes the experience more immersive and experiential than traditional cinema.

Virtual Jungle Safari

  • Visitors can digitally experience a wildlife environment and observe animals and their habitats through immersive technology.
  • This can be particularly useful for children, school students, families, tourists, and people who cannot access actual wildlife reserves. The virtual format also provides an opportunity to showcase wildlife and ecosystems that may be difficult to experience directly.

Other Digital Attractions

  • The project is not limited to the virtual zoo and safari. Reported facilities include:
    • Hologram Zoo
    • Digital Garden
    • Digital Maze
    • Digital Experience Zone
    • Waterfall-themed attractions
    • Cafeteria
  • These features aim to transform the zoo into a more interactive and technology-oriented recreational space.

Technology behind the experience

  • Virtual Reality (VR): This technology creates a simulated environment in which visitors can feel as though they are actually present inside a forest or wildlife habitat.
  • 3D and Holographic Technology: Three-dimensional and holographic displays can create realistic representations of animals and natural environments.
  • Motion Simulation: Motion-enabled seats can reproduce movements corresponding to scenes shown on the screen.
  • Environmental Effects: Wind, water, vibration and other sensory effects can make the experience more realistic.
  • Digital Interpretation: Interactive digital content can provide information about animals, habitats, biodiversity and conservation.

Why is the Virtual Zoo Important?

  • Wildlife Education: Traditional wildlife education often depends on books, photographs or direct observation. Virtual experiences can make concepts more visual and engaging. Students can learn about:
    • Food chains
    • Ecosystems
    • Endangered species
    • Animal behaviour
    • Biodiversity
    • Conservation
  • Conservation Awareness: A virtual environment can communicate the importance of protecting forests and wildlife through immersive storytelling. It can explain issues such as:
    • Habitat destruction
    • Poaching
    • Climate change
    • Human-wildlife conflict
    • Species extinction
  • Tourism Promotion: Indore is already an important tourism and commercial centre of Madhya Pradesh. A technology-based attraction can provide visitors with another reason to visit the city. Increased tourism can also benefit:
    • Local transport
    • Hospitality
    • Food businesses
    • Retail
    • Local employment
  • Public-Private Partnership Model: The project has been developed under the Public-Private Partnership (PPP) model. Under a PPP arrangement, government authorities and private entities work together to develop or operate infrastructure and services. For such a project, the model can combine:

Government support + Private technology/expertise + Public access

The reported investment in the project is around 4.5 crore.

Virtual Zoo vs Traditional Zoo

Traditional Zoo

Virtual Zoo

Mainly involves live animals

Mainly uses digital simulations

Physical enclosures required

Digital environments

Animal welfare and enclosure management are central

Technology and content management are central

Direct observation of animals

Simulated/immersive observation

Limited by animal behaviour and location

Can recreate different habitats

Conservation education through live exhibits

Conservation education through immersive technology

Benefits

The project can provide several benefits:

  • Makes wildlife education more engaging.
  • Encourages environmental awareness.
  • Provides experiential learning for students.
  • Adds a new tourism attraction to Indore.
  • Allows visitors to explore difficult-to-access ecosystems.
  • Uses technology for public education.
  • Can reduce dependence on physical wildlife experiences for certain educational purposes.

Challenges

  • Maintenance: VR equipment, motion systems and digital displays require regular maintenance and upgrades.
  • Accuracy of Content: The digital representation of animals and ecosystems should be scientifically accurate. Entertainment should not come at the cost of factual wildlife education.
  • Accessibility: The facility should be designed to accommodate children, elderly visitors and people who may experience discomfort from motion-based or VR experiences.
  • Technology Costs: Continuous technological upgrades may increase operational expenses.

Way Forward 

  • India should promote virtual zoos as complementary tools for wildlife education, rather than substitutes for conventional zoos and natural habitats. 
  • Regular technological upgrades, scientifically accurate content and accessibility for diverse users should be ensured. Partnerships among governments, technology firms, schools and conservation organisations can expand such facilities.
  • Virtual experiences should also highlight biodiversity conservation, climate change and human-wildlife conflict, helping create informed citizens while promoting responsible tourism and experiential learning.

Prelims MCQ

Q. With reference to India’s first virtual zoo in Indore, consider the following statements:

  1. It includes a 14-D cinema and virtual jungle safari.
  2. It has been developed under the Public-Private Partnership model.
  3. It is located in the Kamla Nehru Prani Sangrahalaya.

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

Mains Question

Q. “Virtual zoos can complement traditional wildlife conservation and environmental education.” Discuss in the context of India’s first virtual zoo in Indore.

FAQs

1. Where is India’s first virtual zoo located?

It is located at the Kamla Nehru Prani Sangrahalaya (Indore Zoo), Madhya Pradesh.

2. What are its major attractions?

The major attractions include a virtual zoo, 14-D cinema and virtual jungle safari.

3. What is a virtual zoo?

A virtual zoo uses technologies such as VR, 3D visuals and digital simulations to recreate wildlife and natural habitats.

4. What is special about the 14-D cinema?

It combines visual content with effects such as motion, vibration, wind and water to create an immersive experience.

5. Why is the Indore project important?

It demonstrates how technology can be integrated with wildlife education, tourism and conservation awareness.

RBI Closes FCNR(B) Deposit Window Early: Impact on Rupee and Forex Reserves.

Why in news ?

  • The Reserve Bank of India (RBI) has decided to prematurely close its special foreign exchange (forex) swap facility for fresh FCNR(B) deposits on August 31, 2026, following a strong response from banks and overseas depositors. The facility has mobilised $52.3 billion through FCNR(B) deposits.
  • However, banks can continue to undertake swaps against FCNR(B) deposits mobilised under the facility with the RBI until September 11, 2026
  • The special facilities related to External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs) will remain operational until December 31, 2026.
  • The development is significant from the perspective of India's external sector, foreign exchange liquidity, rupee stability, capital inflows and RBI's monetary management.

What is the FCNR(B) Deposit?

  • FCNR(B) stands for Foreign Currency Non-Resident (Bank) Account.
  • It is a type of bank deposit that allows Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) to hold deposits in specified foreign currencies rather than in Indian rupees.

Key Features of FCNR(B) Deposits

  • Deposits are maintained in foreign currency.
  • They are available to NRIs and eligible persons of Indian origin.
  • Both principal and interest are fully repatriable.
  • FCNR(B) deposits are exempt from income tax in India.
  • They protect depositors from the risk of rupee depreciation because the deposit is denominated in foreign currency.
  • They provide Indian banks with access to foreign currency resources.

What Did the RBI Announce?

The RBI had introduced a special US dollar-rupee forex swap facility on June 8, 2026.

Under the facility:

  • Banks could mobilise fresh three-to-five-year FCNR(B) deposits.
  • Banks could then swap the foreign currency raised through these deposits with the RBI.
  • The RBI provided the swap at a concessional rate.
  • The arrangement effectively reduced or absorbed the hedging cost faced by banks.
  • This made FCNR(B) deposits more attractive for Indian banks and enabled them to offer competitive interest rates to overseas depositors.

Following the strong response, the RBI has now decided to close the window for fresh FCNR(B) mobilisation on August 31, 2026, earlier than originally envisaged.

Scale of Foreign Currency Inflows

According to data reported by authorised dealer banks, the three components of the special forex facility had attracted $56.846 billion in foreign currency inflows up to August 13, 2026.

Component

Inflows

FCNR(B) deposits

$52.3 billion

Overseas Foreign Currency Borrowings (OFCBs)

$2.805 billion

External Commercial Borrowings (ECBs)

$1.741 billion

Total

$56.846 billion

The FCNR(B) component accounted for the overwhelming majority of the inflows.

Why Did the RBI Introduce the Special Facility?

The facility was part of a broader policy response aimed at strengthening India's external-sector position.

Major Objectives

  1. Increase Foreign Capital Inflows:- The facility sought to encourage NRIs, overseas investors and Indian entities to bring more foreign currency into the Indian financial system.
  2. Improve Forex Liquidity :-Additional foreign currency resources can strengthen the availability of forex liquidity within the banking system.
  3. Support Rupee Stability :-Greater foreign currency inflows can reduce pressure on the rupee, particularly during periods of capital-flow uncertainty.
  4. Strengthen External Sector Resilience :-The facility provides Indian banks and companies with an additional channel for accessing foreign currency funding.
  5. Reduce Hedging Costs :-One of the biggest constraints on FCNR(B) mobilisation was the relatively high cost of hedging foreign currency exposure. The RBI's swap facility substantially reduced this burden for banks.

How Did the Forex Swap Facility Work?

  • The mechanism can be understood in simple terms: -NRI/PIO FCNR(B) deposit Indian Bank Forex Swap with RBI Foreign Currency Liquidity
  • Under the arrangement, banks mobilised eligible foreign currency deposits from overseas customers and subsequently entered into a USD-INR buy/sell swap with the RBI.
  • The RBI's concessional swap terms reduced the cost associated with managing the currency risk.
  • Importantly, the swap covered the principal amount of eligible FCNR(B) deposits and not the interest component.

Why Were FCNR(B) Deposits Attractive to Banks?

  • Normally, raising foreign currency deposits involves a significant currency hedging cost for Indian banks.
  • For example, if a bank accepts a dollar-denominated deposit but ultimately needs rupee liquidity, it must manage the foreign exchange risk. When hedging costs are high, the economics of mobilising FCNR(B) deposits become less attractive.
  • The RBI's special swap facility helped reduce this cost.
  • As a result, banks could:
    • Mobilise larger foreign currency deposits.
    • Offer more attractive interest rates to NRIs.
    • Improve access to overseas funding.
    • Strengthen their foreign currency liquidity position.

Several banks reportedly offered FCNR(B) deposit rates of around 7% following the temporary relaxation of the interest-rate ceiling.

Temporary Removal of Interest Rate Ceiling

  • As part of the broader package, the RBI had temporarily removed the interest-rate ceiling on fresh FCNR(B) deposits with maturities of three to five years until September 30, 2026.
  • This allowed banks greater flexibility to offer competitive interest rates to overseas depositors.
  • The combination of: Higher deposit rates + Lower hedging costs + RBI forex swap support made the FCNR(B) route significantly more attractive.

Why Has the RBI Closed the Window Early?

  • The primary reason is the strong response to the facility.
  • The FCNR(B) component alone generated $52.3 billion, substantially exceeding the scale of inflows seen during the initial weeks of the scheme.
  • The RBI therefore decided that there was no need to keep the fresh FCNR(B) mobilisation window open for the originally intended period.
  • However, the existing deposits mobilised under the facility can still be swapped with the RBI until September 11, 2026.

ECB and OFCB Facilities to Continue

  • Unlike the FCNR(B) window, the special facilities for ECBs and OFCBs will remain open until December 31, 2026.

External Commercial Borrowings (ECBs)

  • ECBs are loans raised by eligible Indian entities from recognised foreign lenders.
  • Under the special facility, ECBs with an average maturity of three years or more can qualify, with the swap tenor linked to the repayment schedule or maturity, subject to a maximum of five years.

Overseas Foreign Currency Borrowings (OFCBs)

  • OFCBs refer to foreign currency borrowings undertaken by eligible entities from overseas sources.
  • The continued availability of these facilities is intended to support access to foreign currency funding even after the FCNR(B) mobilisation window closes.

FCNR(B) Facility vs ECB and OFCB Facility

Feature

FCNR(B)

ECB

OFCB

Main source

NRIs/PIOs

Overseas lenders

Overseas borrowing

Nature

Foreign currency deposit

Foreign currency borrowing

Foreign currency borrowing

Main purpose

Mobilise foreign currency deposits

Raise overseas capital

Access foreign currency funding

Special window

Closes Aug. 31, 2026

Open till Dec. 31, 2026

Open till Dec. 31, 2026

RBI swap support

Yes

Yes

Yes

Significance for the Indian Rupee

The facility was introduced at a time when the Indian rupee was facing pressure amid:

  • Global economic uncertainty
  • Geopolitical risks
  • Changing capital flows
  • External financing pressures
  • Volatility in international currency markets

Large foreign currency inflows can increase the supply of foreign exchange and potentially reduce pressure on the rupee.

However, the inflows do not automatically translate into a sharp appreciation of the rupee. According to CareEdge Ratings, the facility should primarily be viewed as a liquidity and stability measure rather than a mechanism for generating a sharp appreciation of the rupee or a major increase in forex reserves.

Why May Forex Inflows Not Lead to a Proportionate Rise in Reserves?

  • A key factor is the RBI's management of foreign exchange exposure.
  • The central bank may undertake forward and swap transactions that create corresponding future obligations.
  • Therefore, a headline increase in foreign currency inflows does not necessarily mean that India's net usable forex reserves will rise by the same amount.
  • This distinction is important for UPSC aspirants: Gross forex inflows equivalent increase in net forex reserves.
  • The impact depends on the nature of the transaction, RBI intervention, forward liabilities and subsequent foreign exchange movements.

Lessons from the 2013 Forex Crisis

  • The current facility has similarities with the RBI's measures during 2013, when India faced significant pressure on the rupee amid concerns over capital outflows and the global financial environment.
  • At that time, the RBI used measures to attract foreign currency inflows, including encouraging FCNR(B) deposits.
  • The 2026 facility therefore represents a revival of a policy instrument that had previously been used to strengthen India's external-sector position.
  • However, the economic environment in 2026 differs from 2013, particularly in terms of India's foreign exchange reserves, banking-sector resilience and the nature of global capital flows.

Leveraged FCNR(B) Deposits

  • The strong response to the facility also encouraged some banks to facilitate leveraged FCNR(B) structures.
  • In a leveraged structure, an investor uses a portion of their own funds and borrows additional foreign currency against the deposit.
  • The borrowed funds may then also be placed in FCNR(B) deposits.
  • The strategy is based on interest-rate arbitrage:FCNR(B) deposit yield > Cost of foreign currency borrowing The difference between the deposit return and borrowing cost can potentially generate additional returns.
  • However, leveraged structures also involve interest-rate, credit, liquidity and market risks and should not be interpreted as risk-free returns.

Overall Significance

The RBI's decision to close the FCNR(B) window early indicates that the facility has achieved a strong mobilisation response.

The $52.3 billion inflow through FCNR(B) deposits demonstrates the effectiveness of combining:

  • Concessional forex swaps
  • Lower hedging costs
  • Competitive deposit rates
  • Temporary regulatory relaxation

From a macroeconomic perspective, the facility is significant because it can strengthen foreign currency liquidity and external-sector stability.

At the same time, the inflows should not be interpreted simply as a permanent addition to India's forex reserves, because the RBI's swap and forward positions create corresponding obligations.

FAQs: RBI’s Special FCNR(B) Forex Swap Facility

1. What is the FCNR(B) account?

Answer: FCNR(B) stands for Foreign Currency Non-Resident (Bank) Account. It allows NRIs and eligible Persons of Indian Origin to keep fixed deposits in specified foreign currencies without taking direct rupee-exchange-rate risk.

2. Why did the RBI introduce the special FCNR(B) forex swap facility?

Answer: The RBI introduced the facility to attract foreign currency inflows, improve forex liquidity, reduce banks’ hedging costs and support external-sector and rupee stability.

Reliance–Rolls-Royce Partnership for Indigenous AMCA Fighter Jet Engine

Prelims: Advanced Medium Combat Aircraft (AMCA) | Rolls-Royce | Reliance Industries | Aero-Engine | Aerospace Gas Turbine | Fighter Jet Propulsion | Strategic Autonomy | Atmanirbhar Bharat | Defence Manufacturing | Technology Transfer
Mains: GS Paper III – Defence Technology & Indigenisation | Strategic Autonomy | Defence Manufacturing | Public-Private Partnership | Critical Technologies

Why in News?

Reliance Industries Limited (RIL) and British aerospace major Rolls-Royce announced, their strategic intent to partner for the design, development, manufacturing and delivery of a sovereign indigenous combat engine for India’s Advanced Medium Combat Aircraft (AMCA) programme.

Important Point

  • The proposed partnership includes exploring a dedicated Aerospace Gas Turbine Complex in India, which would function as a centre of excellence for advanced power and propulsion technologies.
  • The companies aim to build capabilities across the complete aero-engine lifecycle—from design and development to manufacturing, testing, production and through-life support. 
  • This announcement represents a strategic intent to partner; it should not be treated as the final government selection of an AMCA engine supplier or as an awarded engine contract.

What is the AMCA Programme?

The Advanced Medium Combat Aircraft (AMCA) is India’s proposed twin-engine, stealth-capable, fifth-generation fighter aircraft programme. It is being developed to strengthen the Indian Air Force’s capability in high-end air combat and reduce dependence on foreign combat aircraft and critical technologies.

Key Features of AMCA

  • Type: Advanced multirole combat aircraft
  • Configuration: Twin-engine
  • Generation: Fifth-generation class
  • Key feature: Stealth technology
  • Developer: Aeronautical Development Agency (ADA) with Indian industry participation
  • Role: Air superiority, ground attack, precision strike and other advanced combat missions
  • Strategic objective: Development of indigenous high-end aerospace and defence technology
  • Expected prototype: Around 2028, according to current reporting.

The engine is arguably one of the most technologically demanding components of the programme because modern fighter engines require advanced materials, high-temperature metallurgy, sophisticated cooling, precision manufacturing and highly reliable propulsion systems.

What does the Reliance–Rolls-Royce Partnership Propose?

The proposed collaboration seeks to combine the respective strengths of both companies.

Reliance Industries

Rolls-Royce

Industrial scale

Advanced propulsion expertise

Manufacturing capabilities

Century-long aerospace engineering experience

Technology and execution capabilities

Aero-engine design expertise

Indian industrial ecosystem

Global engine development experience

Supply-chain and production capabilities

Power and propulsion technology

The companies will explore establishing an Aerospace Gas Turbine Complex in India. The proposed complex could eventually create an integrated ecosystem covering:

Design Development Manufacturing Testing Production Maintenance & Through-life Support

This end-to-end approach is important because merely assembling foreign-designed engines in India would provide much less strategic autonomy than developing and controlling critical technologies domestically.

Why is an Indigenous Fighter Engine Important for India?

1. Strategic Autonomy

A fighter aircraft is only as capable as its propulsion system. Dependence on foreign engines can create strategic vulnerabilities during geopolitical crises, sanctions or supply-chain disruptions. Indigenous engine capability would strengthen India’s strategic autonomy.

2. Closing India's Critical Technology Gap

India has developed significant capabilities in aircraft design, missiles, radar and space technology, but high-performance fighter aero-engines remain a major technological challenge. The proposed collaboration could help India address this long-standing gap.

3. Atmanirbhar Bharat

The project aligns with India's broader objective of increasing domestic defence manufacturing and reducing dependence on imported military hardware.

4. High-End Manufacturing Ecosystem

A modern fighter engine requires a sophisticated industrial ecosystem involving: Advanced materials, Super alloys, Single-crystal turbine blades, precision machining, Additive manufacturing, Thermal barrier coatings, Digital manufacturing, advanced testing facilities, Maintenance, Repair and Overhaul (MRO). Therefore, the project could generate technological spill overs beyond the AMCA programme.

5. Future Export Potential

If India develops competitive aero-engine capabilities, it could eventually participate in the global aerospace supply chain and potentially export components, subsystems and propulsion technologies.

Why Rolls-Royce?

  • Rolls-Royce brings extensive experience in advanced propulsion technology and has a long-standing presence in India's aerospace and defence ecosystem.
  • Its expertise could complement India's growing manufacturing capabilities.
  • The company has also expressed interest in expanding its Indian industrial footprint and local supply chains in defence, aviation and energy sectors.
  • For India, the attraction is not simply the acquisition of an engine but the possibility of developing a domestic ecosystem for advanced propulsion technology.

What is an Aero-Engine? 

An aero-engine is the propulsion system that generates thrust to propel an aircraft. Modern fighter aircraft generally use gas-turbine engines.

A simplified working sequence is:

Air Intake Compression Combustion Turbine Exhaust Thrust

In a turbofan/turbojet-type military engine:

  1. Air enters the engine.
  2. Compressors increase its pressure.
  3. Fuel is injected and burned in the combustion chamber.
  4. Expanding gases drive the turbine.
  5. The remaining high-energy gases generate thrust.

For advanced fighter aircraft, the engine must deliver a difficult combination of:

High thrust + low weight + fuel efficiency + reliability + thermal management + combat survivability

India's Fighter Engine Challenge

  • India's experience with the Kaveri engine illustrates the difficulty of developing a modern high-performance fighter engine indigenously.
  • The Gas Turbine Research Establishment (GTRE) pursued the Kaveri programme for the Light Combat Aircraft ecosystem, but the engine did not achieve the required performance for operational integration with the Tejas fighter.
  • The AMCA programme therefore makes the development of a suitable high-thrust engine a critical strategic requirement.
  • India has explored international partnerships to overcome this technological gap, including discussions involving major global engine manufacturers.

Significance for Defence Indigenisation

The partnership is significant because it indicates a greater role for private-sector participation in strategic defence technologies. India's defence-industrial ecosystem is increasingly moving from a model dominated by government-owned organisations towards collaboration among:

Government + DRDO/ADA + DPSUs + Private Industry + Global Technology Partners + MSMEs + Start-ups

Such an ecosystem can accelerate innovation, manufacturing capacity and technology absorption.

Challenges Ahead

Despite its potential, developing an indigenous fighter engine will not be easy.

  1. Extremely Complex Technology: High-performance military engines involve some of the most difficult engineering challenges in defence manufacturing.
  2. Technology Transfer and Intellectual Property: The actual level of technology sharing, ownership of intellectual property and access to critical design knowledge will be crucial.
  3. Time and Cost: A new fighter engine can require years of research, testing, certification and flight trials.
  4. Testing Infrastructure: India needs advanced facilities for engine testing, high-altitude simulation, thermal testing, vibration testing and endurance trials.
  5. Production Quality: Designing an engine is only one part of the challenge. Producing thousands of precision components consistently at military-grade standards is equally important.
  6. Government Approval: The announcement is a strategic intent to collaborate, and the eventual engine-development pathway will depend on the government's procurement and programme decisions.

Strategic Significance for India

The Reliance–Rolls-Royce proposal should be viewed in the larger context of India's attempt to build sovereign defence capabilities. The most important lesson is that defence self-reliance does not necessarily mean developing every technology in isolation. India can combine:

Foreign technological expertise + Indian manufacturing + domestic R&D + indigenous supply chains

If successfully executed, the proposed Aerospace Gas Turbine Complex could become a major hub for India's future military and civil aerospace propulsion ecosystem.The partnership also has the potential to expand beyond the AMCA engine into defence, civil aerospace and next-generation power and propulsion systems, according to the companies.

Key Takeaways for UPSC

  • AMCA is India's advanced twin-engine stealth fighter programme.
  • The proposed Reliance–Rolls-Royce partnership focuses on an indigenous combat engine.
  • A dedicated Aerospace Gas Turbine Complex is being explored in India.
  • The proposed ecosystem would cover design, development, manufacturing, testing, production and through-life support.
  • The initiative is linked to strategic autonomy and Atmanirbhar Bharat.
  • Fighter-engine technology remains one of India's major defence-industrial challenges.
  • The partnership represents increasing private-sector participation in strategic defence technologies.
  • It is a strategic intent, not yet a final government engine contract.

Challenges

  • Technological: Mastering high-temperature materials, turbine technology and advanced propulsion.
  • Financial: Large investment and long development timelines.
  • Industrial: Building a reliable domestic supply chain for thousands of precision components.
  • Strategic: Ensuring meaningful access to critical technologies and intellectual property.
  • Institutional: Coordinating government agencies, private industry, DRDO/ADA and international technology partners.

UPSC Prelims MCQ

Q. With reference to the proposed Reliance Industries–Rolls-Royce partnership, consider the following statements:

  1. It aims to develop an indigenous combat engine for India's AMCA programme.
  2. The companies have proposed exploring an Aerospace Gas Turbine Complex in India.
  3. The announcement itself constitutes the final government award of the AMCA engine contract.

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

Mains Practice Question

Q. “Indigenous aero-engine capability is central to India's strategic autonomy in military aviation.” Discuss the technological, industrial and strategic significance of the proposed Reliance–Rolls-Royce partnership for the AMCA programme.

FAQs

1. What is AMCA?

Answer: AMCA is India's proposed twin-engine, stealth-capable fifth-generation combat aircraft programme aimed at strengthening the Indian Air Force's advanced air-combat capabilities.

2. What is the Reliance–Rolls-Royce partnership about?

Answer: It aims to explore joint design, development, manufacturing and delivery of a sovereign indigenous combat engine for the AMCA programme.

3. What is the proposed Aerospace Gas Turbine Complex?

Answer: It is a proposed Indian facility intended to build end-to-end capabilities in aero-engine design, development, manufacturing, testing, production and through-life support.

4. Why is an indigenous fighter engine important for India?

Answer: It can reduce dependence on foreign propulsion systems, strengthen strategic autonomy and create a high-end domestic aerospace manufacturing ecosystem.

5. Is the AMCA engine contract finally awarded to Reliance and Rolls-Royce?

Answer: No. The August 2026 announcement represents a strategic intent to partner; it is not itself a final government selection or awarded engine contract. 

Hara Mangrove Forests: Persian Gulf Oil Spill, Ecological Importance and Lessons for India

Prelims: Hara Mangroves, Qeshm Island, Strait of Hormuz, Avicennia marina, UNESCO Biosphere Reserve, Persian Gulf, Blue Carbon, Ramsar Site, Mangrove Ecosystem
Mains: GS Paper I – Geography & Environment, GS Paper III – Environment, Biodiversity & Disaster Management, Marine Pollution, Coastal Ecosystems, Blue Carbon, and India’s Mangrove Conservation
Keywords: Hara Biosphere Reserve, Qeshm Island, Mangrove Forest, Oil Spill, Minoan Pioneer, Avicennia marina, Strait of Hormuz, Persian Gulf, Blue Carbon, Coastal Protection, Marine Biodiversity

Why in News?

A major oil-spill incident in the Persian Gulf is threatening the ecologically important Hara mangrove forests around Qeshm Island, Iran.

Important Point

  • Satellite imagery has detected oil slicks near Qeshm following damage to the Liberia-flagged bulk carrier Minoan Pioneer, which was struck by a projectile near the Strait of Hormuz on August 3–4, 2026. Reuters reported that the Qeshm slick is associated with heavy fuel oil, while another slick has extended for roughly 160 km.
  • Oil has also been observed reaching Qeshm’s shoreline.
  • The incident is particularly significant because the affected coastline contains the Hara Biosphere Reserve, one of the most important mangrove ecosystems of the Persian Gulf.

What are Hara Mangrove Forests?

  • The Hara mangrove ecosystem is located in southern Iran, around the Mehran River delta and Strait of Khuran, between Qeshm Island and mainland Iran, opening toward the Persian Gulf.
  • UNESCO's Man and the Biosphere Programme describes Hara as a major Avicennia mangrove ecosystem. The reserve was nominated in 1976 and covers approximately 206,244 hectares, including both terrestrial and marine areas.

The ecosystem consists primarily of the grey mangrove, scientifically known as Avicennia marina.

1. Natural adaptation to saline water

Mangroves survive in environments where ordinary terrestrial plants cannot. Avicennia marina possesses specialised mechanisms for dealing with salt. Its roots and leaves help regulate salt and water balance, allowing the species to survive in highly saline coastal environments. This makes Hara an excellent example of halophytic vegetation.

2. Coastal protection

Mangrove roots bind sediments and reduce the energy of waves and tidal currents. Therefore, they help protect coastal communities from:

  • Coastal erosion
  • Storm surges
  • Strong waves
  • Tidal flooding
  • Sediment loss

This function becomes particularly important for low-lying islands such as Qeshm.

3. Blue Carbon ecosystem

Mangroves are among the world's important Blue Carbon ecosystems. They capture atmospheric carbon dioxide and store carbon in:

  • Biomass
  • Roots
  • Sediments
  • Waterlogged soils

4. Nursery for Marine Life

Hara's complex network of tidal channels provides shelter and breeding habitat for marine organisms. It supports: Fish, Shrimp, Crabs, Molluscs, Other aquatic organisms

5. Importance for Birds

Hara is also an important habitat for migratory and wetland birds. UNESCO records species and habitats associated with the reserve, including the great white pelican (Pelecanus crispus), while the wider ecosystem supports numerous waterbirds and herons. The mangrove canopy and surrounding mudflats provide:

  • Feeding grounds
  • Resting areas
  • Breeding habitat
  • Seasonal refuge for migratory birds

What Happened to the Hara Mangroves?

The immediate concern is an oil spill following damage to the Minoan Pioneer, a Liberia-flagged dry bulk carrier. According to maritime reports, the vessel was struck by an unidentified projectile while travelling near Oman's side of the Strait of Hormuz. The projectile reportedly hit the engine room, and the crew abandoned the vessel; one seafarer was reported missing. Subsequent satellite observations detected oil slicks near Qeshm.

Why is Oil Spill Dangerous for Mangroves?

Oil pollution can be particularly damaging to mangrove ecosystems because mangroves occupy shallow coastal waters and intertidal mudflats.

Why Cleanup is Difficult?

Oil-spill response in mangrove ecosystems is complicated. Aggressive mechanical cleanup can itself:

  • Damage fragile roots
  • Disturb sediments
  • Destroy seedlings
  • Increase trampling
  • Spread contaminated material

Therefore, response agencies have to balance oil removal with ecosystem protection. The current geopolitical situation further complicates emergency response and access to affected areas. Reuters reported that clean up and salvage operations have faced delays linked to the wider regional tensions.

Hara Mangroves: Important Species and Wildlife

Category

Examples

Dominant mangrove

Avicennia marina

Birds

Pelicans, herons, migratory shorebirds

Reptiles

Green turtle, hawksbill turtle, sea snakes

Marine organisms

Fish, shrimp, crabs

Habitat

Tidal mudflats, shallow coves, mangrove channels

Important wetland

Strait of Khuran

Conservation status

UNESCO Biosphere Reserve

UNESCO also records the presence of the critically endangered hawksbill turtle and green turtle-associated feeding habitat in the reserve.

Mangroves in India

The Hara incident is highly relevant for India because India also possesses extensive mangrove ecosystems along its eastern and western coasts and in the Andaman & Nicobar Islands.

Major Indian mangrove regions include:

1. Sundarbans – West Bengal

Located in the Ganga-Brahmaputra-Meghna delta, the Sundarbans are India's most extensive mangrove ecosystem.

It is globally significant for:

  • Royal Bengal Tiger
  • Estuarine biodiversity
  • Coastal protection
  • Carbon storage
  • Fisheries
  • Local livelihoods

The Sundarbans are also a UNESCO World Heritage Site.

2. Bhitarkanika – Odisha

Located in the deltaic region of the Brahmani and Baitarani rivers, Bhitarkanika is one of India's most important mangrove ecosystems.

It is particularly famous for:

  • Saltwater crocodiles
  • Mangrove biodiversity
  • Olive ridley turtle-associated coastal ecosystems
  • Fisheries
  • Wetland habitats

3. Gulf of Kutch – Gujarat

The Gulf of Kutch contains extensive mangrove habitats on India's western coast.

Its ecological importance is linked with:

  • Mangroves
  • Coral reefs
  • Marine biodiversity
  • Fisheries
  • Coastal protection

The Gujarat mangrove system is ecologically distinctive because it occurs in a relatively arid environment compared with India's humid eastern mangrove regions.

4. Gulf of Khambhat – Gujarat

Mangroves are also present around the Gulf of Khambhat, where strong tidal conditions influence coastal ecosystems.

5. Pichavaram – Tamil Nadu

Pichavaram is one of India's well-known mangrove ecosystems and lies between the Vellar and Coleroon estuaries.

It is important for:

  • Fish breeding
  • Bird habitat
  • Coastal protection
  • Tourism
  • Mangrove biodiversity

6. Muthupet – Tamil Nadu

Muthupet lies in the southern Cauvery delta region.

Avicennia marina is particularly important here, demonstrating that the same dominant mangrove species found in Hara also occurs prominently in parts of India's coast.

7. Godavari–Krishna Delta – Andhra Pradesh

The Godavari and Krishna delta systems support important mangrove ecosystems.

Coringa Mangroves, near Kakinada, are among India's major mangrove habitats.

8. Andaman & Nicobar Islands

The islands possess highly diverse mangrove communities because of their tropical island environment. They also form part of India's important coastal and marine biodiversity network.

Hara vs Indian Mangroves

Feature

Hara Mangroves

Indian Mangroves

Country

Iran

India

Major region

Persian Gulf

Arabian Sea, Bay of Bengal, Indian Ocean

Key location

Qeshm–Strait of Khuran

Sundarbans, Odisha, Gujarat, Tamil Nadu, A&N

Major species

Avicennia marina

Avicennia, Rhizophora, Bruguiera, etc.

Major function

Coastal protection & marine nursery

Coastal protection, fisheries & biodiversity

Carbon role

Blue Carbon

Blue Carbon

Major threat

Oil pollution, coastal pressure

Pollution, reclamation, aquaculture, erosion, cyclones

Conservation

UNESCO Biosphere Reserve

Multiple protected areas & conservation programmes

India's Mangrove Conservation: MISHTI

India has recognised mangrove restoration as an important component of climate and coastal resilience. The MISHTI – Mangrove Initiative for Shoreline Habitats & Tangible Incomes programme focuses on mangrove restoration and conservation.

Its broader objectives include:

  • Increasing mangrove cover
  • Restoring degraded mangrove ecosystems
  • Supporting coastal communities
  • Enhancing carbon sequestration
  • Strengthening climate resilience
  • Creating livelihood opportunities

Thus, the Hara oil-spill incident provides a useful international case study for understanding why India's mangroves require protection from oil pollution, industrialisation, coastal development and climate change.

Why Oil Spills are a Major Threat to India's Mangroves?

India has a long coastline and several major ports, oil terminals and shipping corridors. Important areas at risk include:

  • Gulf of Kutch
  • Mumbai coast
  • Gulf of Khambhat
  • Kochi region
  • Chennai–Ennore coast
  • Visakhapatnam
  • Paradip
  • Sundarbans
  • Andaman & Nicobar Islands

Conclusion

  • It demonstrates the intersection of maritime security, geopolitical conflict, marine pollution, biodiversity conservation, climate change and coastal livelihoods.
  • Hara's importance comes from its combination of mangrove biodiversity, blue-carbon storage, fisheries support, bird habitat and coastal protection. UNESCO identifies it as a major Avicennia ecosystem around the Strait of Khuran.
  • For India, the incident offers an important lesson. From the Sundarbans and Bhitarkanika to Gujarat's Gulf of Kutch and Tamil Nadu's Pichavaram, mangroves function as natural infrastructure protecting coastlines and supporting millions of people.

Prelims MCQ

Q. With reference to the Hara Mangrove Forests, consider the following statements:

  1. They are located in Iran around the Strait of Khuran.
  2. Avicennia marina is the dominant mangrove species.
  3. Hara is recognised under UNESCO's Man and the Biosphere Programme.
  4. It is located on the eastern coast of India.

Which of the statements given above are correct?

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

Mains Practice Question

Q. “Mangroves are natural infrastructure for coastal resilience.” Discuss with reference to the ecological functions of Hara Mangroves and India's major mangrove ecosystems. Also examine the threats posed by oil pollution and suggest suitable conservation measures.

FAQs 

Q1. Where are the Hara Mangrove Forests located?

Answer: They are located in southern Iran, around Qeshm Island and the Strait of Khuran.They form an important Avicennia marina mangrove ecosystem in the Persian Gulf.

Q2. What is the UNESCO status of Hara Mangroves?

Answer: Hara is recognised as a UNESCO Biosphere Reserve.It is important for biodiversity, marine life and local livelihoods.

Q3. Which is the major mangrove species found in Hara?

Answer: The dominant species is the Grey Mangrove (Avicennia marina).It is adapted to survive in highly saline coastal environments.

Q4. Why are Hara Mangroves in the news?

Answer: A major oil spill near Qeshm Island is threatening the Hara mangrove ecosystem.The pollution can damage mangrove roots, marine life, fisheries and coastal biodiversity.

Q5. Why are Hara Mangroves important for UPSC?

Answer: They link Mangroves, Blue Carbon, Marine Pollution, Strait of Hormuz and Coastal Ecosystems.They can be compared with India’s Sundarbans, Bhitarkanika and Gulf of Kutch.

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