UPSC Prelims Practice
Current Affairs Quiz 7 November 2026
Test Your Knowledge
10 questions based on today’s current affairs & editorials
Choose number of questions
Question 1 of 10
1 Article 16(4) of the Constitution permits reservation of appointments or posts for any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.
2 In Indra Sawhney, the Supreme Court directed the Government to specify the basis for excluding socially and economically advanced persons from the Other Backward Classes.
3 The Office Memorandum of 1993 on the creamy layer specifies six categories, of which Category VI is the Income/Wealth Test.
4 In Union of India v Rohith Nathan, the Supreme Court held that because the relief was confined to the parties, the interpretation laid down in its judgment binds no other case.
How many of the above statements are correct?
Facts
Statement 1Correct
This is the text of Article 16(4).
Statement 2Correct
The Court had ‘directed the Government to specify the basis’ for that exclusion, as a Cabinet release records.
Statement 3Correct
The Memorandum specifies six categories, and Category VI is the Income/Wealth Test.
Statement 4Incorrect
The relief was ‘inter partes’, but the interpretation ‘constitutes a binding precedent under Article 141 of the Constitution and attracts the doctrine of stare decisis’.
Analysis
The Order of 6 November 2026 (2026 INSC 1201) separates the principle from the relief in the judgment of 11 March 2026 (2026 INSC 230).
Concept note
Article 15(4) lets the State make special provision for the advancement of socially and educationally backward classes, and Article 16(4) deals with posts under the State. The Office Memorandum No. 36012/22/93-Estt (SCT) is dated 8 September 1993, and it modified an earlier memorandum of 13 August 1990.
Its post-based categories cannot be applied to a Public Sector Undertaking or a bank until those posts are matched with Government posts. Because such equivalence ‘had not been formally determined’, the Department of Personnel and Training applied the Income/Wealth Test under Category VI, read with a letter of 14 October 2004, to parents employed in Public Sector Undertakings.
The Court rejected that approach in March. The November Order then settled its reach: the ratio ‘shall not, by itself, furnish a ground for reopening selections or appointments already concluded’ (para 18(v)), and equivalence and policy matters ‘fall within the domain of the executive and the legislature’ (para 18(viii)).
The issue, the Court said, was ‘confined to delineating the ambit of the operative directions’.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS2 reservation under Articles 15(4) and 16(4), the binding force of Supreme Court decisions, judicial limits on executive policy. ** |
| ✍️ Mains Keywords | ** inter partes relief, stare decisis, equivalence of posts, hostile discrimination. ** |
| ⚠️ Common Mistake | ** treating a judgment’s relief and its principle as one thing; relief reaches the parties, the principle binds under Article 141. ** |
| 📌 Exam Tip | ** the Memorandum is dated 8 September 1993, not August; 13 August 1990 is the earlier memorandum it modified. ** |
| 🎤 Interview | ** should a Court’s reading of a rule reopen selections already concluded, if that reading shows the earlier method was wrong? |
Question 2 of 10
1 Article 131 of the Constitution gives the Supreme Court original jurisdiction, to the exclusion of any other court, in a dispute between States if it involves a question on which the existence or extent of a legal right depends.
2 Article 131 lays down a period of limitation for suits brought under it.
3 Article 262(2) allows Parliament to provide by law that neither the Supreme Court nor any other court shall exercise jurisdiction over a dispute on the use, distribution or control of the waters of an inter-State river.
4 In the suit on Himachal Pradesh’s share of Bhakra-Beas power, Article 262(2) was held to bar the suit because the projects stand on inter-State rivers.
How many of the above statements are correct?
Facts
Statement 1Correct
This is the text of Article 131, leaving aside its proviso.
Statement 2Incorrect
The suit ‘was not barred by limitation, since Article 131 prescribes no period of limitation’.
Statement 3Correct
This follows Article 262(1) and (2).
Statement 4Incorrect
Article 262(2) was no bar ‘since it concerned sharing of power and not the use of inter-State river waters’.
Analysis
On 6 November 2026 (2026 INSC 1200), a Bench of Surya Kant, CJI, and Justices Joymalya Bagchi and V. Mohana gave final directions in the suit of 1996, describing the judgment as ‘in the nature of execution proceedings’.
Concept note
Original jurisdiction means a case begins in the Supreme Court. Article 131 covers disputes between the Government of India and States, or between States, on a legal right.
Article 363 is a separate bar, on disputes arising out of pre-Constitution agreements executed by Rulers of Indian States. It did not apply here, because the only proved agreement, the Merger Agreement of 15 August 1948, ‘contained no provision touching allocation of power’.
The legal right came from statute: section 78(1) of the Punjab Reorganisation Act, 1966 ‘itself conferred a legal right enforceable under Article 131’. The right was enforceable against Punjab, Haryana, Chandigarh and the Union, but not against Rajasthan, which had never formed part of composite Punjab.
The State’s 7.19% share rested on the proportion of composite Punjab’s population transferred to it, while its claim to 12% free power failed. The Court took the arrears at 13,066 million units, adjusted about 1,093 against the State’s capital-cost liability, and directed Punjab and Haryana to supply the balance of about 11,973 million units over 20 lean seasons, about 598 a year.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS2 federal disputes and the Supreme Court’s jurisdiction; GS3 hydropower and water resources. ** |
| ✍️ Mains Keywords | ** original jurisdiction, statutory entitlement, inter-State river, execution proceedings. ** |
| ⚠️ Common Mistake | ** assuming any dispute linked to a river falls under Article 262; here the dispute was over power, not water. ** |
| 📌 Exam Tip | ** Article 131 is States and legal rights; Article 262 is river water and a bar Parliament may enact; Article 363 is pre-Constitution agreements. ** |
| 🎤 Interview | ** why should a suit filed in 1996 take three decades to end, and what does that say about remedies between States? |
Question 3 of 10
Dam or reservoir : Linked with
1. Gobind Sagar : Bhakra Dam
2. Maharana Pratap Sagar : Pandoh Dam
3. Pandoh Dam : River Beas
4. Bhakra Dam : River Satluj (Sutlej)
How many of the pairs given above are correctly matched?
Facts
Pair 1Correct
Gobind Sagar is the reservoir behind Bhakra.
Pair 2Incorrect
Maharana Pratap Sagar is the lake of Pong Dam, not Pandoh Dam.
Pair 3Correct
Pandoh stands on the Beas, in Mandi district.
Pair 4Correct
The Bhakra Beas Management Board describes the Bhakra Dam as ‘constructed across River Satluj’.
Analysis
These works are the Bhakra-Nangal and Beas Projects at the centre of the Supreme Court’s judgment of 6 November 2026 on Himachal Pradesh’s share of power.
Concept note
Under Article II(1) of the Indus Waters Treaty, the waters of the three eastern rivers (the Ravi, the Beas and the Satluj) are available ‘for the unrestricted use of India’. Pandoh and Pong both stand on the Beas, which flows through Himachal Pradesh and Punjab into the Sutlej in Punjab.
Pandoh diverts Beas water through tunnels and an open channel to the Dehar power house, which the Board describes as ‘connecting the mighty rivers of Beas and Satluj’. Pong stands in Kangra district, just upstream of Talwara.
The Bhakra Management Board was constituted under section 79 of the Punjab Reorganisation Act, 1966, and was renamed the Bhakra Beas Management Board with effect from 15 May 1976. It regulates water and power from the Projects for Punjab, Haryana, Rajasthan, Himachal Pradesh, Delhi and Chandigarh.
The judgment records the submergence of about 27,869 acres of the erstwhile State of Bilaspur for Bhakra-Nangal and over 65,050 acres in Kangra district for Beas, which is why these places matter in the case and in an answer on it.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS1 rivers and the Indus system; GS2 the Indus treaty and inter-State bodies; GS3 multipurpose projects and displacement. ** |
| ✍️ Mains Keywords | ** multipurpose project, submergence, inter-basin diversion, eastern rivers. ** |
| ⚠️ Common Mistake | ** placing Pong and Pandoh on the Sutlej because their water and their Board are tied to Bhakra; both stand on the Beas. ** |
| 📌 Exam Tip | ** learn each dam in a set of three: its river, its lake and its State or district, and mark them on a map. ** |
| 🎤 Interview | ** those who gave up land for a project often get the least of its power; how should the benefit be shared? |
Question 4 of 10
1 Article 324(1) of the Constitution vests in the Election Commission the superintendence, direction and control of elections to the offices of President and Vice-President, along with the preparation of electoral rolls for, and the conduct of, elections to Parliament and State Legislatures.
2 Under the Representation of the People Act, 1950, a person who is not a citizen of India is disqualified for registration in an electoral roll.
3 Under the same Act, a person aged eighteen on the qualifying date is entitled to be registered in the roll of any constituency, whether or not ordinarily resident there.
Which of the statements given above is/are correct?
Facts
Statement 1Correct
Article 324(1) names all of these.
Statement 2Correct
Section 16(1)(a) disqualifies a person who ‘is not a citizen of India’.
Statement 3Incorrect
Section 19 requires both, that the person ‘is not less than eighteen years of age on the qualifying date’ and ‘is ordinarily resident in a constituency’.
Analysis
The Hindu’s editorial of 7 November 2026, ‘Epic failures’, is about the roll and welfare. These provisions tie enrolment to citizenship, age and ordinary residence, while welfare has a different test, need.
Concept note
Article 326 entitles a citizen aged 18 or above, not otherwise disqualified, to be registered as a voter at elections to the House of the People and State Assemblies. The Representation of the People Act, 1950 turns this into rules for the roll: section 16 on disqualification, section 19 on conditions of registration and section 20 on the meaning of ‘ordinarily resident’.
Section 21(3) adds the power to direct a special revision of a roll. In 2026 INSC 564, the Supreme Court dismissed the challenge to the Special Intensive Revision in Bihar, and its reasoning drew on section 16.
These tests explain why a roll cannot cover everyone who may need a welfare benefit: a citizen under 18 has no place on it, and enrolment turns on ordinary residence in a constituency. The Electors Photo Identity Card (EPIC) is the voter ID, and the e-EPIC is a secure PDF version of it.
Keep two questions apart in an answer: who may be on the roll is settled by law, and whether the roll should serve other purposes is a question of policy.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS2 elections, the Election Commission and the Representation of the People Acts; welfare delivery and identity documents. ** |
| ✍️ Mains Keywords | ** adult suffrage, ordinary residence, roll-based identity, wrongful deletion. ** |
| ⚠️ Common Mistake | ** treating age as enough for enrolment; section 19 also asks for ordinary residence in the constituency. ** |
| 📌 Exam Tip | ** section 16 is the bar, section 19 the entitlement, and section 20 the meaning of ordinarily resident. ** |
| 🎤 Interview | ** should a roll prepared for voting decide who receives welfare, when a citizen under 18 cannot be on it at all? |
Question 5 of 10
1 Article 22(4)(a) of the Constitution provides for an Advisory Board, consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court, to report on detention for longer than three months.
2 Under the National Security Act, 1980, the maximum period of detention under a confirmed detention order is six months from the date of detention.
3 Under Section 8(1) of the same Act, the grounds of detention are to be communicated ordinarily not later than five days, and in exceptional circumstances, for reasons recorded in writing, not later than ten days from the date of detention.
Which of the statements given above is/are correct?
Facts
Statement 1Correct
The Board must report ‘before the expiration of the said period of three months’ that there is ‘sufficient cause for such detention’.
Statement 2Incorrect
Section 13 sets the maximum at ‘twelve months from the date of detention’.
Statement 3Correct
This is the time limit in Section 8(1).
Analysis
On 6 November 2026, PTI reported that the Gauhati High Court had quashed the detention of Pranab Doley under this Act. That account came from counsel, who said details would be known once the complete order was available.
Concept note
Article 22(3)(b) takes preventive detention outside clauses (1) and (2), so the 24-hour rule for production before a magistrate does not govern it. Article 22 supplies its own safeguards instead.
Clause (4) deals with the Advisory Board, and clause (5) requires the grounds to be communicated ‘as soon as may be’ with ‘the earliest opportunity of making a representation’. The National Security Act, 1980 builds its clocks on these clauses: the grounds under Section 8(1), a reference to the Advisory Board within three weeks under Section 10, a Board report within seven weeks under Section 11(1), and the outer limit under Section 13.
The detention order in this case was issued under Section 3(2), and cited activities ‘prejudicial to the maintenance of public order as well as security of the state’, PTI reported. Read the Article and the Act together: three months is the point at which the Constitution requires a Board’s opinion, and twelve months is the ceiling set by the Act.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS2 Fundamental Rights and judicial review; GS3 internal security and public order; GS4 liberty against security. ** |
| ✍️ Mains Keywords | ** preventive detention, Advisory Board, right of representation, proximate grounds. ** |
| ⚠️ Common Mistake | ** confusing three months (Article 22(4)) with twelve months (Section 13 of the Act), or five days with the Board’s three and seven weeks. ** |
| 📌 Exam Tip | ** keep a ladder of the Act’s clocks: 5 or 10 days, 3 weeks, 7 weeks, 12 months. ** |
| 🎤 Interview | ** when a person has just been granted bail, what should a court ask before accepting a preventive detention order that follows? |
Question 6 of 10
1 Its provisions, in so far as they relate to personal guarantors to corporate debtors, were brought into force by a notification issued in 2019.
2 On the passing of a bankruptcy order under Section 126, the estate of the bankrupt vests in the bankruptcy trustee.
3 An application for bankruptcy under Section 121 may be filed within six months of the date of the Adjudicating Authority’s order on which it rests.
How many of the above statements are correct?
Facts
Statement 1Correct
The provisions came into force on 1 December 2019, by notification S.O. 4126(E) of 15 November 2019.
Statement 2Correct
Under Section 128(1)(a), ‘the estate of the bankrupt shall vest in the bankruptcy trustee’.
Statement 3Incorrect
Section 121(2) sets ‘a period of three months’ from the Adjudicating Authority’s order.
Analysis
On 5 November 2026, NCLT Mumbai declared former Videocon promoter Venugopal Dhoot bankrupt under Section 126, on State Bank of India’s petition under Section 123, over his personal guarantee, as LiveLaw Business and Bar & Bench reported.
Concept note
The Code applies to ‘personal guarantors to corporate debtors’ through Section 2(e). In the Dhoot matter, as reported, the guarantees were invoked in February 2018 and Videocon Industries was admitted to the corporate insolvency resolution process in June 2018.
Personal insolvency resolution was admitted on 8 April 2026, and a repayment plan of Rs 600 crore over 36 months was rejected, ending that process on 17 July 2026. Under Section 128(1), the estate vests in the bankruptcy trustee and ‘shall be divided among his creditors’.
Bar & Bench reported that the Tribunal appointed Asish Narayan as trustee, directed Dhoot to submit his financial position to the trustee within seven days, and asked the trustee to invite creditors’ claims and submit a preliminary report within 90 days. The liabilities were reported as Rs 12,668.06 crore, including interest and penalties.
Keep the company’s insolvency process and the guarantor’s own process apart in an answer: the reported dates for each are different.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS3 banking, stressed assets and the insolvency framework; GS2 tribunals. ** |
| ✍️ Mains Keywords | ** personal guarantor, bankruptcy trustee, vesting of estate, creditor recovery. ** |
| ⚠️ Common Mistake | ** treating insolvency and bankruptcy as one stage; here the bankruptcy order followed a failed personal insolvency resolution. ** |
| 📌 Exam Tip | ** Section 2(e) is the reach, Section 126 the order, Section 128 the vesting. ** |
| 🎤 Interview | ** should promoters who gave personal guarantees be pursued as hard as the companies they ran? |
Question 7 of 10
1 Section 3(1) of the Essential Commodities Act, 1955 allows the Central Government to regulate by order the production, supply and distribution of an essential commodity, and trade and commerce in it.
2 Rice under the Open Market Sale Scheme (Domestic) is sold to private parties through e-auctions.
3 Additional quantities of Bharat Rice have been allocated to NAFED, NCCF and Kendriya Bhandar.
4 The Centre’s order itself fixes stock limits on paddy and rice in every State and Union Territory.
How many of the above statements are correct?
Facts
Statement 1Correct
This is the general power in Section 3(1).
Statement 2Correct
PIB refers to rice ‘sold to private parties through OMSS (D) e-auctions’.
Statement 3Correct
PIB names these three agencies.
Statement 4Incorrect
The order requires stock disclosure, and the Centre gave five States its concurrence to impose limits ‘wherever considered necessary’.
Analysis
The order is dated 6 November 2026. The release reports no State order on stock limits yet, so limits should not be described as imposed.
Concept note
The order covers traders and wholesalers, retailers, big chain retailers and processors or millers in every State and Union Territory. They must ‘disclose their stock positions every Friday on the Food Stock Portal’, in six categories: Basmati Rice, Non-Basmati Premium Rice, non-Basmati Rice, Parboiled Rice, Broken Rice and Paddy.
The stated aim is to ‘ensure adequate domestic supplies, maintain price stability, prevent hoarding and safeguard consumer interests’. The concurrence went to Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana, and any such limits ‘shall remain in force up to 31st January 2027’.
The rice sale target under the Open Market Sale Scheme (Domestic) has been doubled from 25 LMT to 50 LMT for 2026-27. Private parties bought 25 LMT through e-auctions up to 31 October 2026, against 11 LMT in the corresponding period of the previous financial year.
Any entity found unregistered on the portal or violating the prescribed stock limits faces action under Sections 6 and 7 of the Act, PIB said. These are three separate tools: disclosure gives information, open market sales add supply, and stock limits restrict holding.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS3 food security, public distribution and price stability; GS2 Centre-State roles in supply management. ** |
| ✍️ Mains Keywords | ** stock disclosure, open market sale, hoarding, price stabilisation. ** |
| ⚠️ Common Mistake | ** writing that the Centre imposed stock limits; it gave concurrence to five States, to impose them wherever considered necessary. ** |
| 📌 Exam Tip | ** keep the tools apart: disclosure (all States), concurrence (five States), target (OMSS(D)), retail sale (Bharat Rice). ** |
| 🎤 Interview | ** do stock limits protect consumers, or do they penalise legitimate traders and discourage private storage? |
Question 8 of 10
1 Semicon 2.0, under the India Semiconductor Mission, has six pillars, which include Design of Chips and Talent Development.
2 The recent approvals under the Electronics Component Manufacturing Scheme were given by the Department for Promotion of Industry and Internal Trade.
3 The Semicon 2.0 web portal has opened applications for all six pillars.
How many of the above statements are correct?
Facts
Statement 1Correct
Pillar 1 is Design of Chips and Pillar 6 is Talent Development.
Statement 2Incorrect
PIB says ‘MeitY has further approved 12 applications’, MeitY being the Ministry of Electronics and Information Technology.
Statement 3Incorrect
‘applications are now live for Pillar 2, 3 & 4’.
Analysis
Semicon 2.0 itself is not new. What PIB reported on 6 November 2026 is the portal and the 12 approvals, which bring the Electronics Component Manufacturing Scheme to 118 applications covering 34 products across 16 States.
Concept note
The Union Cabinet approved Semicon 2.0 with a fiscal outlay of Rs 1,27,500 crore under the India Semiconductor Mission, PIB said on 15 July 2026, and that release has the first fab scheduled to be commissioned in 2028. The six pillars are Design of Chips; Machines and Materials; Setting up More Fabs; Further Strengthening the ATMP/OSAT Industry; Research and Development; and Talent Development.
The portal is open for the second, third and fourth of these, under the Semicon India Programme. The 12 approvals carry a projected investment of Rs 7,503 crore and projected production of Rs 39,045 crore, and are expected to generate 7,127 direct jobs across seven States: Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh.
The scheme’s cumulative figures are expected investment of Rs 77,051 crore and projected production of Rs 5,73,146 crore. Read such numbers as projections: an approval is not yet a factory, and a projected figure is not output.
An answer should keep the Semicon programme and the components scheme apart.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS3 industrial policy, electronics manufacturing and technology; GS2 government policies and interventions. ** |
| ✍️ Mains Keywords | ** semiconductor value chain, fabs, component ecosystem, import dependence. ** |
| ⚠️ Common Mistake | ** treating the portal as a new scheme; only the portal is new, and the scheme dates from the Cabinet’s approval. ** |
| 📌 Exam Tip | ** Pillars 2, 3 and 4 are live on the portal: Machines and Materials, More Fabs, ATMP/OSAT. ** |
| 🎤 Interview | ** should India spend so heavily on chip manufacturing, or put more into chip design? |
Question 9 of 10
Statement-I: Under Section 26(2) of the Reserve Bank of India Act, 1934, the Central Government may, on the recommendation of the Central Board, declare by notification in the Gazette of India that any series of bank notes of any denomination shall cease to be legal tender.
Statement-II: The Specified Bank Notes (Cessation of Liabilities) Act, 2017 provides that the specified bank notes shall cease to be liabilities of the Reserve Bank.
Which one of the following is correct in respect of the above statements?
Facts
Statement ICorrect
This is the text of Section 26(2), the executive route to withdrawing legal tender.
Statement IICorrectDoes not explain Statement I
Section 3 of the 2017 Act deals with the notes after the event, ending the Reserve Bank’s liability and the Central Government’s guarantee. It does not give or explain the power to withdraw legal tender.
Analysis
The notification of 8 November 2016 under Section 26(2) withdrew legal tender status from Rs 500 and Rs 1,000 notes. Its tenth anniversary falls on 8 November 2026.
Concept note
Under section 26(1) of the RBI Act, every bank note is legal tender for the amount written on it, and is guaranteed by the Central Government. Section 26(2) is the power to end that status for a series of notes, on the recommendation of the Central Board.
The Specified Bank Notes (Cessation of Liabilities) Act, 2017 is Act No. 2 of 2017. It received assent on 27 February 2017 and is deemed to have come into force on 31 December 2016.
It defines a specified bank note as a Rs 500 or Rs 1,000 note of the series existing on or before 8 November 2016. According to the Supreme Court Observer’s summary of Vivek Narayan Sharma v Union of India, decided on 2 January 2023, a five-judge Bench upheld the 2016 scheme by 4:1, the majority read ‘any series’ to include ‘all series’, and Justice B.V. Nagarathna held that the exercise ‘ought to have been done through a legislation or an ordinance’.
The same summary records the petitioners’ argument that the 1946 and 1978 exercises were carried out through legislative means. So the legal question has been the route, not only the outcome.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS3 money, banking and the informal economy; GS2 executive power and judicial review. ** |
| ✍️ Mains Keywords | ** legal tender, currency in circulation, cash-reliant economy, consultation with the Central Board. ** |
| ⚠️ Common Mistake | ** treating the 2017 Act as the source of the power to demonetise; the power is in section 26(2) of the 1934 Act. ** |
| 📌 Exam Tip | ** section 26(1) makes a note legal tender, section 26(2) ends it, and the 2017 Act ends the liability on the old notes. ** |
| 🎤 Interview | ** was the cost of a sudden withdrawal of cash justified by its stated aims, and how would you test that? |
Question 10 of 10
Statement-I: In the Reserve Bank of India’s data, India’s net foreign direct investment can fall in a year in which gross inflows rise.
Statement-II: In the same data, net foreign direct investment is what remains after repatriation and disinvestment, and FDI by India, are taken out of gross inflows.
Which one of the following is correct in respect of the above statements?
Facts
Statement ICorrect
In RBI’s Handbook of Statistics (Table 143), gross inflows rose from US$ 71,302 million in 2023-24 to US$ 80,615 million in 2024-25, while net FDI fell from US$ 10,152 million to US$ 959 million.
Statement IICorrectExplains Statement I
Net FDI also depends on what leaves. In 2024-25, repatriation and disinvestment were US$ 51,486 million and FDI by India US$ 28,171 million.
Analysis
This data frames the debate over the RBI’s draft foreign investment rules of 21 July 2026, which remain a draft.
Concept note
RBI reports foreign direct investment in steps. Start with gross inflows, subtract repatriation and disinvestment to get Direct Investment to India, then subtract FDI by India, the investment Indian entities make abroad, to get net FDI.
RBI’s table shows net FDI at US$ 43,955 million in 2020-21, US$ 959 million in 2024-25 and US$ 6,947 million in 2025-26 (provisional). Gross inflows in 2025-26, at US$ 94,836 million, stood above the 2020-21 level of US$ 81,973 million.
So the fall in net FDI is not mainly a fall in gross inflows, and the table does not say why money left or why Indian entities invested more abroad. Foreign investment is presently governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, under the Foreign Exchange Management Act, 1999.
The draft Foreign Exchange Management (Foreign Investment) Rules, 2026 are meant to rationalise them and will be finalised after public consultation. Niharika Yadav argues in The Indian Express that a rewrite of the rules will not be enough unless the statute itself changes.
That is the author’s argument, and a Mains answer should attribute it as such.
🎯 Concept Kit tap to expand
| 🔗 Cross-Paper Links | ** GS3 foreign investment and the external sector; GS2 regulatory institutions. ** |
| ✍️ Mains Keywords | ** gross and net FDI, repatriation, outward FDI, capital account. ** |
| ⚠️ Common Mistake | ** reading a fall in net FDI as a fall in foreign interest; gross inflows may be rising while exits and outward investment grow faster. ** |
| 📌 Exam Tip | ** gross inflows, less repatriation and disinvestment, gives Direct Investment to India; less FDI by India gives net FDI. ** |
| 🎤 Interview | ** is a high level of repatriation a sign of weakness, or of a market where investors can exit and earn returns? |
Performance
Question-wise Result