02 July 2025 UPSC Current Affairs - Daily News Headlines

On July 02nd, 2025, India & the world witnessed important developments across various sectors. Recent reports from India highlight significant developments across its financial landscape, intellectual property protection, and rich biodiversity. From the RBI's assessment of economic stability and emerging global risks to renewed debates on safeguarding traditional Indian goods with GI tags, and the exciting discovery of numerous new flora and fauna species, these updates underscore the nation's dynamic progress and ongoing challenges in diverse critical sectors.

Awareness regarding daily UPSC current affairs is crucial for cracking the UPSC Prelims, excelling in UPSC Mains. It helps perform well in the UPSC personality test, thus becoming an informed and effective UPSC civil servant.

Below are the current affairs and headlines of the day taken from The Hindu, Indian Express, Press Information Bureau & All India Radio as required for UPSC preparation:

Financial Stability Report (June 2025)

Source: The Hindu

Syllabus: GS Paper III (Economy)

IN NEWS

The Reserve Bank of India (RBI) released the June 2025 edition of its biannual Financial Stability Report (FSR), which assesses the overall health, stability, and risks to the Indian financial system. The report affirms India’s position as a key global economic growth engine and highlights its resilient banking and corporate sectors, while also acknowledging several external and structural risks facing both the Indian and global economy.

Key Data Points from June 2025 FSR

• Macroeconomic Outlook:
  • India remains a global growth engine, buoyed by robust domestic consumption, increased infrastructure investment, and effective fiscal consolidation.
  • RBI’s real GDP growth forecast for FY2026: 6.5%.
  • Risks to growth include: Geopolitical spillovers, climate-related shocks (e.g., erratic monsoons, heatwaves), global trade slowdown, and tariff barriers.
• Inflation Trends:
  • Headline CPI inflation (May 2025): 2.8%, the lowest since Feb 2019.
  • April 2025 CPI inflation: 3.2%.
  • RBI’s Flexible Inflation Targeting (FIT) Framework: Target: 4%, Tolerance Band: .
  • Improved inflation outlook due to stable food and fuel prices, reduced global commodity volatility, and tighter monetary control.
• Financial Sector Stability:
  • Indian banking and financial sector shows robust performance with strong capital adequacy even under stress test scenarios.
  • Declining gross NPAs (Non-Performing Assets) in both public and private banks.
  • High credit growth and strong profitability.
  • NBFCs (Non-Banking Financial Companies) continue to show improvement in capital buffers, asset quality, and liquidity positions.
• Corporate Sector Financial Health:
  • Corporate leverage has reduced significantly over the past three years.
  • Earnings and cash flows have improved, supported by post-pandemic demand recovery.
  • Investment cycle shows early signs of revival due to improved balance sheets and PLI-linked capital formation.
• Global and External Risks:
  • Heightened geopolitical risks: Russia-Ukraine conflict, Middle East tensions, rising Taiwan Strait friction.
  • Protectionist trade policies: US tariff hikes (April 2025) have triggered a new wave of uncertainty.
  • Capital outflows and market volatility: Resulting from global interest rate realignments and inflation uncertainty.
  • Rising global public debt: Seen as a significant concern, especially for developing economies.
• Structural Economic Shifts:
  • Trade fragmentation: Increasing reliance on regional trade blocs.
  • Technological disruptions: Rapid rise of AI and fintech-based models challenging traditional financial frameworks.
  • Climate change: Long-term risks from extreme weather events and rising insurance liabilities.
  • Geopolitical hostilities: Leading to increased defense spending and reduced development financing.
• Financial Market Conditions:
  • Overall financial conditions have eased: Lower volatility in equity and bond markets, greater stability in forex reserves and exchange rates.
  • Supported by: Accommodative monetary policy, improved global investor confidence in India.
  • Stress tests confirm that financial institutions can withstand severe macroeconomic shocks.
• Regulatory Recommendations by RBI:
  • Enhance macroprudential supervision across all sectors.
  • Enforce stricter compliance with capital and liquidity norms.
  • Prioritise implementation of climate-related financial disclosure standards.
  • Expand focus on cybersecurity and operational resilience in digital banking.

Intellectual Property Rights: Geographical Indication (GI)

Source: The Hindu

Syllabus: GS Paper I (Geography)

IN NEWS

An Italian brand showcased footwear resembling Kolhapuri chappals at its Milan Spring/Summer 2026 show, sparking allegations of cultural misappropriation. This incident led to a renewed debate on the protection of India’s GI-tagged goods in global markets.

Examples of GI-tagged Indian products

• Agriculture: Darjeeling Tea, Basmati Rice
• Handicrafts: Channapatna Toys (Karnataka), Madhubani Paintings (Bihar)
• Textiles: Banarasi Sarees (Uttar Pradesh), Pashmina Shawls (J&K)
• Processed Food: Tirupati Laddu, Hyderabadi Haleem

Key features of GI Tags

• GIs are collective rights, not owned by an individual.
• They cannot be assigned, transmitted, or licensed.
• Valid for 10 years, renewable indefinitely.
• Total registered GI goods in India: 658 (as of 2025).
• Leading states in GI registration: Tamil Nadu, Karnataka, West Bengal, Uttar Pradesh among the top.

How are they governed?

• Indian Legal Framework:
  • Governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999.
  • Came into force in 2003.
  • Administered by the GI Registry, under the Controller General of Patents, Designs and Trademarks (CGPDTM).
• International Legal Framework:
  • Rooted in the Paris Convention (1883).
  • Strengthened by the TRIPS Agreement (1995) under the WTO.
  • India is a signatory to TRIPS and obligated to provide protection.

How can Infringement be tackled?

• In India:
  • Registered proprietors or authorised users can file civil suits for misrepresentation of origin, unfair competition, passing off, or misleading the public.
  • Remedies include injunctions, damages, and seizure of goods.
• Globally:
  • There is no automatic international GI protection. GIs are territorial rights; they require separate registration in each country.
  • Possible mechanisms for protection: Bilateral Agreements (e.g., India-EU FTA), recognition under national IP laws of foreign countries, and the Lisbon Agreement (for some jurisdictions).

New Flora and Faunal Discoveries (2024)

Source: The Hindu

Syllabus: GS Paper III (Biodiversity)

IN NEWS

India added a total of 683 new species to its fauna in 2024 (including 459 new species and 224 new records) and 433 taxa to its flora (comprising 410 new plant species and 23 infra-specific taxa). The data was released by the Union Environment Minister in Kolkata.

Faunal Discoveries (2024)

• Total fauna additions: 683 species (459 new species, 224 new records - previously known elsewhere, now recorded in India).
• Top contributing states:
  • Kerala: 101 (80 new species, 21 new records)
  • Karnataka: 82 (68 new species, 14 new records)
  • Arunachal Pradesh: 72 (42 new species, 30 new records)
  • Tamil Nadu: 63 (50 new species, 13 new records)
  • West Bengal: 56 (25 new species, 31 new records)
  • Meghalaya: 42 (25 new species, 17 new records)
  • Andaman & Nicobar Islands: 43 (14 new species, 29 new records)
• Significant discoveries in fauna:
  • 2 new genera, including Dravidoseps gouensis (a new genus of reptiles).
  • 37 new reptile species.
  • 5 new amphibian species.
  • Anguiculus dicaprioi — a new Colubridae snake species named after Leonardo DiCaprio.

Floral Discoveries (2024)

• Total flora additions: 433 taxa (410 new plant species, 23 infra-specific taxa).
• Top contributing states:
  • Kerala: 58
  • Maharashtra: 45
  • Uttarakhand: 40
• Significant floral discoveries:
  • Orchid species: Bulbophyllum gopalianum, Coelogyne tripurensis, Gastrodia indica, Gastrodia sikkimensis.
• Ecological hotspots: Western Ghats and North-Eastern states contributed 35% of the total plant discoveries.

India’s Current Biodiversity Status (2024)

• Documented flora species: Total recorded plant species: 56,177 (Includes angiosperms, gymnosperms, pteridophytes, bryophytes, lichens, fungi, and algae).
• India’s position: India is among the 17 megadiverse countries in the world. It is home to 7–8% of all recorded species globally, while accounting for only 2.4% of the world's land area.

🎯 Question No. 1

With reference to the Reserve Bank of India's (RBI) Financial Stability Report (FSR), consider the following statements:

1. The FSR is a statutory publication released annually by the RBI.
2. It is prepared by the Financial Stability and Development Council – Sub-Committee (FSDC-SC).
3. The June 2025 FSR projected India's real GDP growth for FY2026 at 6.5%.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

✅ Correct Answer: (b)

ℹ️ Explanation:

• Statement 1 is incorrect: The FSR is a semi-annual (biannual) publication, not annual, and it is a non-statutory apex-level body (FSDC) that oversees its preparation, though the report itself is a flagship publication of the RBI.
• Statement 2 is correct: The report explicitly states, "The Financial Stability Report (FSR) is a flagship semi-annual publication of the Reserve Bank of India, prepared by the Financial Stability and Development Council – Sub-Committee (FSDC-SC)."
• Statement 3 is correct: The "Key Data Points from June 2025 FSR" section states, "RBI’s real GDP growth forecast for FY2026: 6.5%."

🎯 Question No. 2

Which of the following are potential risks to India's economic growth highlighted in the RBI's June 2025 Financial Stability Report?

1. Geopolitical spillovers
2. Climate-related shocks
3. Global trade slowdown
4. Rising global public debt

Select the correct answer using the code given below:

(a) 1, 2 and 3 only

(b) 2, 3 and 4 only

(c) 1, 3 and 4 only

(d) 1, 2, 3 and 4

✅ Correct Answer: (d)

ℹ️ Explanation: All four points are explicitly mentioned in the "Risks to growth" and "Global and External Risks" sections of the "Key Data Points from June 2025 FSR":

"Risks to growth include: Geopolitical spillovers, Climate-related shocks (e.g., erratic monsoons, heatwaves), Global trade slowdown and tariff barriers."

"Rising global public debt: Seen as a significant concern, especially for developing economies."

🎯 Question No. 3

With reference to Geographical Indications (GIs) in India, consider the following statements:

1. A GI tag is a form of intellectual property right that identifies a product originating from a specific geographical region.
2. GI tags are individual rights and can be assigned or licensed to others.
3. In India, GI tags are governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999.

Which of the statements given above is/are correct?

(a) 1 only

(b) 1 and 2 only

(c) 1 and 3 only

(d) 2 and 3 only

✅ Correct Answer: (c)

ℹ️ Explanation:

• Statement 1 is correct: The definition of a GI tag provided in the text aligns with this statement.
• Statement 2 is incorrect: The text states, "GIs are collective rights, not owned by an individual. Cannot be assigned, transmitted, or licensed."
• Statement 3 is correct: The text explicitly mentions, "Governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999."

🎯 Question No. 4

Which of the following international agreements or conventions are relevant to the international legal framework for Geographical Indications (GIs)?

1. Paris Convention (1883)
2. TRIPS Agreement (1995) under the WTO
3. Lisbon Agreement

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

✅ Correct Answer: (d)

ℹ️ Explanation: All three are mentioned in the "International Legal Framework" and "How can Infringement be tackled? - Globally" sections:

"Rooted in the Paris Convention (1883)."

"Strengthened by the TRIPS Agreement (1995) under the WTO."

"Lisbon Agreement (for some jurisdictions)."

🎯 Question No. 5

According to the "New Flora and Faunal Discoveries" report for 2024, which of the following states contributed the highest number of new faunal discoveries?

(a) Karnataka

(b) Tamil Nadu

(c) Kerala

(d) Arunachal Pradesh

✅ Correct Answer: (c)

ℹ️ Explanation: The "Faunal Discoveries (2024)" section explicitly states, "Top contributing states: Kerala: 101 (80 new species, 21 new records)." This is the highest number among the options provided.

🎯 Question No. 6

Consider the following statements regarding India's biodiversity status as per the 2024 report on new discoveries:

1. India is one of the 17 megadiverse countries in the world.
2. India accounts for 7–8% of all recorded species globally, while occupying only 2.4% of the world's land area.
3. The Western Ghats and North-Eastern states collectively contributed over 50% of the total plant discoveries in 2024.

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

✅ Correct Answer: (a)

ℹ️ Explanation:

• Statement 1 is correct: The "India’s Current Biodiversity Status (2024)" section states, "India is among the 17 megadiverse countries in the world."
• Statement 2 is correct: The text states, "Home to 7–8% of all recorded species globally, while accounting for only 2.4% of the world's land area."
• Statement 3 is incorrect: The "Floral Discoveries (2024)" section states, "Ecological hotspots: Western Ghats and North-Eastern states contributed 35% of the total plant discoveries," not over 50%.