Daily Current Affairs 09 June 2026 – IAS Current Affairs

Current Affairs 09 June 2026 focuses on the Prelims-Mains perspective. Major events are :

Greater Nicobar Project – Strategic Significance

Source: Indian Express
GS III: Infrastructure, Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Overview

1. News in Brief
2. Key components of Great Nicobar island project
3. Strategic significance for India

Why in the News?

The Union Government has defended the proposed Great Nicobar Island development project, stating that GNI project will serve India’s strategic interests.

News in Brief

• India has invested rupees 81,000 crore in Great Nicobar Island (GNI) infrastructure and strategic megaproject.
• The Government highlighted that it is strategically significant national initiative.
• Transform the island into a major maritime focal point in the Indian Ocean Region (IOR).

Key Components of Great Nicobar Island Project

• International Container Transshipment Terminal (ICTT) – Reduces dependence on  foreign transshipment ports, keeping in view the defense and national security purpose.
• Greenfield International Airport – Improves connectivity and open up the island to tourism (destinations include, Senang city, Phuket island, and Langkawi island.
• Township and Supporting Infrastructure- Support to accommodate massive influx of people and economic activities.
• Power plant- Reliable power infrastructure designed to ensure uninterrupted power supply.

About Great Nicobar Island

• Southernmost island of India in the Andaman and Nicobar archipelago.
• Home to India’s southernmost Indira Point.
• Located close to the Malacca Strait, one of the world’s  busiest maritime chokepoints.
• Hosts strategically important naval air station INS Baaz.
• Lies at the junction of the Bay of Bengal and the Andaman Sea.

Strategic Significance for India

• Enhance India’s maritime security
  • • • • Strengthens India’s surveillance and monitoring capabilities in the eastern Indian Ocean.
        • Enhances the operational reach of the Indian Navy and Coast Guard (provide naval logistic support).
        • Supports maritime domain awareness in critical sea lanes.
• Economic and trade benefits
  • • • • Galathea Bay in Great Nicobar reduces dependence on foreign transshipment ports such as those in Singapore, Colombo and Klang – Vizhinjam in Kerala is the sole domestic transshipment port.
        • Boosts India’s logistics competitiveness.
        • Creates opportunities for trade, investment and tourism.
• Proximity to Maritime routes
  • • • • Great Nicobar is located close to key International Sea Lines Of Communication (SLOC).
        • It can improve monitoring of commercial and naval traffic.
        • It can strengthen India’s maritime security.
        • It can develop into a major economic and maritime hub.
        • It can support India’s Indo-Pacific strategy.
        • The Malacca Strait (crucial chokepoint) – nearly one-third of global trade and significant share of global energy shipments happens through the Malacca Strait.
• Indo-Pacific Strategy
  • • • • Acts as a strategic counterbalance to expanding regional influence of other powers.
        • The dual-use airport and port enhance the maritime defense capabilities of the Quad to ensure free and open sea lanes.
        • Strengthen India’s role as a key security provider in the Indo-Pacific region.

The Government assured that environmental safeguards and communities welfare are considered and incorporated while ensuring  that strategic and economic objectives are achieved.

UPSC Prelims Practice Question

Consider the following statements regarding the Great Nicobar Island Project

1. The project is located to closely to major International Sea Line Of Communication (SLOCs).
2. The project includes and International Corridor Transshipment Port and a greenfield airport.
3. Great Nicobar Island is situated near the Strait of Hormuz.

Which of the statements given above is/are incorrect?

a) 1 and 2 only

b) 2 and 3 only

c) 3 only

d)1,2, and 3

Answer: c) 3 only

Explanation: Great Nicobar Island is strategically located near the Malacca Strait, not the Strait of Hormuz.

New Bilateral Investment Model

Source: Indian Express
GS II & III: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests, and Investment Models.

Overview

1. News in Brief
2. Background
3. Key features of the proposed BIT model
4. Significance of the proposed changes

Why in the News?

The Union Government is considering significant changes to its Bilateral Investment Treaty (BIT), safeguarding India’s regulatory sovereignty and legal system.

News in Brief

• Amid the recent debate on various issues with Bilateral Investment Treaty (BIT), the centre is considering  tailoring them according to engagement with countries.
• The review  follows concerns that the 2016 BIT model was too restrictive and may have affected investor confidence.
• The proposed model makes investment agreements more balanced and protect foreign investments.

Background

• 1993 – First BIT model introduced
• 2015 – New BIT model approved.
• 2016 – Adopted the BIT model approved in 2015.
• 2025-2026 – In the Budget, announced the revamping of the 2016 model to make it more investor-friendly and attract sustained foreign investment.
• 2026- Proposed a new BIT model that seeks to balance between investor protection and national interests.

Key features of the proposed BIT model

• Two-Year Local Remedy Requirement
  • • • Foreign investors must first seek remedies through Indian courts or legal mechanisms for at least two years before initiating international arbitration.
      • To strengthen confidence in India’s judicial institutions and protect sovereignty of the country.
• No Most-Favoured Nation (MFN) Clause
  • • • The most-favoured nation clause is a provision in investment treaties which requires a country to extend the same trade concessions granted to one trading partner to all other trading partners covered under the agreement.
      • This can undermine policy autonomy.
      • Under the new model each BIT will operate independently.
      • Foreign investors can only claim rights specifically mentioned in their own treaty.
      • They can not import better provisions from India’s treaties with other countries.
      • To prevent treaty shopping, reduce legal disputes and arbitration claims, and protect India’s regulatory powers.
• Taxation kept outside investment pacts
  • • • Taxation will remain outside the scope of investment treaties.
      • Tax related issues will be governed by domestic laws and separate tax agreements.

Significance of the proposed changes

• Protects foreign investments while preserving India’s regulatory autonomy and legal sovereignty.
• Encourages use of domestic legal remedies and promotes confidence in India’s judicial and dispute-resolution mechanisms.
• Reduces risk of expensive international arbitration cases against India.
• Provides greater policy flexibility in taxation.
• Reduces ambiguities and conflicting interpretations, and facilitates a more predictable investment environment.

Concerns

• Absence of MFN protection may make India’s BITs less attractive compared to those of some competing investment destinations.
• May affect India’s competitiveness in attracting foreign investment if not balanced carefully.

The proposed Bilateral Investment Treaty (BIT) reforms aim to create a balanced investment framework , that can support ongoing Free Trade Agreements (FTAs) negotiations and help to attract quality foreign investments.

UPSC Prelims Practice Question

Consider the following statements regarding Bilateral Investment Treaties (BITs)

1. A BIT primarily aims to protect and promote investments between two countries.
2. The Most-Favoured Nation Clause allows investors to claim non-discriminatory treatment among trading partners.
3. The newly proposed BIT model seeks to include taxation within the provisions of the investment pacts.

Which of the above statements is/are incorrect?

a)1 and 2 only

b) 2 and 3 only

c) 3 only

d) 1,2, and 3

Answer: c) 3 only

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India’s Free Trade Agreement Strategy

Source: Indian Express
GS II: Bilateral, Regional, and Global Groupings and Agreements involving India and/or affecting India’s interests.

Overview

1. News in Brief
2. Key challenges in Free Trade Agreements
3. Way Forward

Why in the News?

A recent opinion article in Indian Express highlighted the challenges India faces in negotiating Free Trade Agreements (FTAs).

News in Brief

• As India expands its network of FTAs, there are challenges that demand attention.
• India has now 15 FTAs covering 27 countries.
• Another 9 agreements with 42 countries are nearing completion, and could account for nearly 75% of the country’s exports, once finalized.

Key challenges in India’s Free Trade Agreements

• Rising trade deficits
  • • • India has witnessed growing trade deficits with several FTA partners, particularly ASEAN countries.
      • Imports have grown faster than exports, reducing the expected benefits of trade liberalisation.
        • • • Under MFN commitments, FTAs often give foreign exporters a much bigger advantage in the Indian market than Indian exporters receive abroad.
• Low utilization of tariff benefits
  • • • Indian exporters often make limited use of FTAs because many partner countries already have very low MFN tariffs.
      • The small tariff savings frequently do not justify the costs of complying with Rules of Origin and documentation requirements.
        • • • Only about 20-30%  of India’s eligible reportedly use FTA preferences.
      • India maintains significantly higher MFN tariffs than its FTA partners, creating stronger incentives for foreign exporters to utilise FTAs than for Indian exporters.
• Worsening Inverted duty structure
  • • • An inverted duty structure occurs when import duties on raw materials and industrial inputs are higher than those on finished products.
      • Due to FTAs, many finished goods enter India at low or zero duty, while Indian manufacturers often pay higher duties on imported inputs.
      • This increases production costs for domestic industries, reduces competitiveness, discourages value addition, and can undermine the goals of Make In India.
• “Make in ASEAN, Sell in India”
  • • • Due to FTAs and inverted duty structures, it can become cheaper to manufacture goods in ASEAN countries and export them duty-free to India than to produce them within India.
      • As a result, firms may shift investment and production to countries such as Vietnam, Thailand, and Indonesia, benefitting from lower costs and preferential market access.
      • This can lead to the relocation of jobs and value addition abroad, weakening India’s domestic manufacturing ecosystem and supply chains.
      • And encourage firms to ‘Make in ASEAN, Sell in India’, rather than ‘Make in India’.

Way Forward

• India’s tariffs should better align with FTAs commitment.
• The government and industries must work together.
• Ensure FTAs strengthen India’s manufacturing base instead of encouraging higher imports, overseas production and loss of industrial capacity.

UPSC Prelims Practice Question

Consider the following statements regarding the utilization of Free Trade Agreements(FTA)

1. Indian exporters often make limited use of FTAs when MFN tariffs in partner countries are already very low.
2. Compliance costs related to Rules of Origin and certification requirements can discourage firms from claiming FTA benefits.
3. Low MFN tariffs in partner countries generally increase the utilization of FTAs by exporters.

Which of the statements given above are correct?

a)1 and 2 only

b) 2 and 3 only

c) 1and 3 only

d) 1,2and 3

Answer: a) 1 and 2 only

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