British In India

• 1600: Royal Charter: Elizabeth I
• 1608: Hawkin : Jahangir
• 1613: Jahangir : 1st Trading post at Surat
• Broach, Ahemdabad, Agra
• 1715: John Surman: Mughal emperor Farrukhsiyar : Farmans: valuable privilaeges in Bengal, Gujarat and Hyderabad.
• 
  

1st Carnetic War (1740-48)

• duplex and Lawrence
• No result

2nd Carnetic War (1749-54)

• Treaty of Pondicherry (1754)

Battle of Plassey (1757)

• Robert Clive led the Company's army against the Siraj-udda-ulah at Plassey
• Company Won the Battle
• Reason for defeat: Mir Jafar was on EIC Side
• EIC 1st victory in the Indian Subcontinent

Battle of Wandhiwash (1760)

• British and French
• 3rd Carnatic war
• Eyre Coote and de Lally
• Treaty of Paris (1763)
• Part of Seven Years War

Battle of Buxar (1764)

Land Settlement Reforms

• Why?? 
• They needed a permanent source of income and reforms in the agriculture sector to improve its revenue

Permanent Settlement (1793)

• Cornwallis
• Sunset Law
• Rajas and taluqdars were recognised as zamindars
• Amount was fixed permanently
• Anyone who failed to pay the revenue losses his zamindari under the act

Mahalwari System (1822)

• Holt Mackenzie
• NWP of Bengal
• Mahal means Village
• Village headman was given the responsibility
• Amount was not fixed

Ryotwari System

• Thomas Munro
• Southern India
• Direct collection of Land Revenue

Jyotedar

• Rich class peasants consolidated their position in the villages.
• They controlled local trade as well as moneylending, exercising immense power over poorer cultivator of the region
• Called as Havaldars, Gantidars or Mandals

Annexation Policies

Doctrine of Lapse

• Dalhousie
• Satara (1848), Udaipur (1852) Jhansi and Nagpur (1854)
• Eight States

Subsidiary Alliance

• Wellesley

Policy of Ring Fence

• Warren Hastings
• Buffer zone 
• The British were safeguarding their territories at the expense of their neighbouring ally states

Debt ceiling

The debt ceiling,which was introduced in 1917 during World War I, is the maximum amount that the US federal government can borrow to fulfill its financial obligations.

Citizenship

 Two well known Principles,

• 'Jus Soli': Citizenship on the basis of place of birth 
• 'Jus Sanguinis':  Basis on blood relation ~> Rejected by Constituent Assembly

Indian Constitution

• Union List
• Constitution does not define the "Citizen"
• Details in the Part II (Article 5 to 11)
• Single Citizenship (e.g. UK)

Article 11

• It empowers Parliament to make any provision wrt the acquisition and termination of citizenship and all matters relating to it.

Acquisition

• By Birth
• By descent
• Registration 
• Naturalisation

Citizenship Act, 1955

• Act has been amended 5 times: 1986, 2003, 2005, 2015 and 2019

Section 6A

• Only applicable to Assam

Swami Vivekananda

• 12th January, 1863 -  161st birth anniversary
• National Youth Day
• 1893: Maharaja Ajit Singh of the Khetri State: Vivekananda
• Netaji Subhas Chandra Bose had called him "the maket of modern India"
• Neo-Vedanta
• World Parliament of Religion in Chicago in 1893
• Swami Vivekananda talked about the four pathways of attaining moksha from worldly pleasure and attachment in his books. Which is Karma Yoga, Bhakti Yoga, Raja Yoga and Jnana Yoga.

Organisations

• Ramakrishna Mission (1897)
• Belur Math, West Bengal (1899):  He died here in 1902 

“Arise! Awake! And stop not until the goal is reached.”

 “Where can we go to find God if we cannot see Him in our own hearts and in every living being.”

“Ask nothing; want nothing in return. Give what you have to give; it will come back to you, but do not think of that now.”

“All the powers in the universe are already ours. It is we who have put our hands before our eyes and cry that it is dark.”

Doctrine of Basic Structure

• Kesavananda Bharati v State of Kerala 1973
• a 13-judge Constitution Bench ruled that the ‘basic structure’ of the Constitution could not be amended by Parliament.
• Origin: German Constitution
• Constitution does not defined "Basic Structure"

Pravasi Bharatiya Diwas (PBD)

• 17th edition, Indore, Madhya Pradesh

Why Celebrated?

• January 9 was selected as it was the date when Mahatma Gandhi returned to India from South Africa in 1915.

The Pravasi Bharatiya Samman Award

Rare earth elements

 a set of 17 chemical elements in the periodic table — the 15 lanthanides, plus scandium and yttrium.

• The 17 rare earths are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb), and yttrium (Y).
• One of the rare earths, promethium, is radioactive.

Kiruna mine in Sweden, where the deposits have been found.

Article 239AA

• 69th Amendment Act, 1991
• S Balakrishnan Committee 1987

Space Mission

 Juice mission

• European Space Agency (ESA)
• Jupiter Icy  Moons Explorer mission in April 2023
• Moons: Europa, Ganymede and Callisto.

Russia’s Luna 25 mission

• Moon 
• July 2023

Ispace’s Hakuto R mission, Rashid Rover

• ispace
• Japanese Space Technology
• the Hakuto lander launched in December 2022, it is only expected to reach the Moon by April 2023

Savitribai Phule

• January 3, 1831, in Maharashtra’s Naigaon village
• Along with Jyotirao, Savitribai started the Balhatya Pratibandhak Griha (‘Home for the Prevention of Infanticide’) for pregnant widows facing discrimination.
• In 1873, the Phules set up the Satyashodhak Samaj (‘Truth-seekers’ society’)
• Savitribai became involved in relief work during the 1896 famine in Maharashtra and 1897 Bubonic plague.
• breathed her last on March 10, 1897.

Source: The Indian Express

Archaeological Survey of India (ASI)

• 1861
• Canning
• Union Ministry of Culture

The Ancient Monuments and Archaeological Sites and Remains Act (AMASR Act) regulates the preservation of monuments and archaeological sites of national importance.

Indian rhinoceros (Rhinoceros unicornis)

• found only in the Brahmaputra valley, parts of North Bengal, and parts of southern Nepal.

IUCN  Status

• Indian rhino is listed as vulnerable.
• It was earlier placed in the endangered category

 September 22, World Rhino Day, in 2021

Green Bonds

• issue Sovereign Green Bonds (SgrBs) worth Rs 16,000 crore.
• issued by any sovereign entity, inter-governmental groups or alliances and corporates with the aim that the proceeds of the bonds are utilised for projects classified as environmentally sustainable.
• Framework issued by the government on November 9, 2022.

Green Hydrogen Mission

Prime Minister Narendra Modi had first announced the National Green Hydrogen Mission (NGHM) in his Independence Day speech in 2021.

Ministry of New and Renewable Energy (MNRE)

• to promote the development of green hydrogen production capacity of at least 5 million metric tonnes (MMT) per annum with an associated renewable energy capacity addition of about 125 gigawatts (GW) by 2030.

A mission outlay of Rs 19,744 crore was cleared by the Union Cabinet

• Hydrogen produced from fossil fuels is called grey hydrogen
• Hydrogen generated from fossil fuels with carbon capture and storage options is called blue hydrogen
•  hydrogen generated using electrolysers powered by renewable power sources is called green hydrogen

Strategic Interventions for Green Hydrogen Transition (SIGHT)

The Preamble

• Foundation: Jawaharlal Nehru’s Objectives Resolution-adopted by the Constituent Assembly on January 22, 1947

IN OUR CONSTITUENT ASSEMBLY  twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.

Keywords

1.Sovereign

2. Socialist

• In Directive Principles of State Policy (Arts. 39(b) and 39(c))
• 42nd Amendment Act in 1976

3. Secular

• 42nd Amendment Act in 1976
• Articles 14, 15 and 27 establish the secular nature of the state.
• Arts. 25–28 guarantee to all individuals, the freedom to profess, practice and propagate their religion, and assure strict impartiality on the part of the state and its institutions towards all religions

4. Democratic

5. Republic

6. Liberty

• an absence of restraints on the activities of individuals 
• The ideals of liberty, equality and fraternity are taken from the French Revolution

7. Equality

• absence of special privileges to any section of the society
• Civic, (Article 14, 15, 17 and 18)
• Political, (Article 325 and 326)
• Economic (Article 39 and 16) 

8. Fraternity

• Article 51A (Fundamental Duties)
• 42nd Amendment Act in 1976

9. Justice

• Social, economic and political

Cases

1.Berubari Union Case, 1960

•  not a part of the Constitution.

2. Kesavananda Bharaticase, 1973

• Preamble is a part of the Constitution
• Doctrine of Basic Structure

3. S R Bommai Case, 1994

• Preamble is a part of the Constitution

Ramabai (1858–1922):

 She championed the cause of women’s education. She never went to school but learnt to read and write from her parents. She was given the title ‘Pandita’ because she could read and write Sanskrit, a remarkable achievement as women then were not allowed such knowledge. 

She went on to set up a Mission in Khedgaon near Pune in 1898, where widows and poor women were encouraged not only to become literate but to be independent. They were taught a variety of skills from carpentry to running a printing press, skills that are not usually taught to girls even today.

The printing press can be seen in the picture on the top left corner. Ramabai’s Mission is still active today.

Mahatma Gandhi

• 2nd October, 1869 Porbandar (Gujarat)
• Gandhi Peace Prize
• International day of Non-Violence 
• 30 January, 1930: Martyrs' Day

South Africa

• 1893-1915
• Satyagrah
• 1899-1902: The Boer War: Awarded the Queen's South Africa Medal for serving the British Empire
• Phoenix (Durban)
• Tolstoy Farm (Johanessburg)
• 1911: Gopal Krishan Gokhale (Political Guru)  Visited South Africa
• Viceroy Hardinge

9th January, 1915: Return to India: Pravasi Bharatiya Divas

Satyagraha Movements

• 1916: Champaran (Bihar): 1st CDM, Rajkumar Shukla, Problems of Indigo Planters, Tinkatiya System (3/20), Rajendra Prasad, Anugrah Sinha
• 1917: Kheda (Gujarat): 1st NCM, Sardar Patel, Indulal Yagnik
• 1918: Ahemdabad (Gujarat): Mill Workers: 1st hunger Strike, Anusuiya Sarabai
• 1919: Nationwide Satyagraha against the Rowlatt Act (1919)
• 13 April,1919: Jallianwalla Bagh: Called off the Movement
• 1920: Non-Cooperation Movement: Calcutta Session: Support Khilafat
• Dec 1920: Nagpur Session: Non-Cooperation Movement Addopted
• 1922: Withdrwa the NCM after the Chauri Chaura Incident
• 1930: Salt March: Civil Disobedience Movement: Sabarmati to Dandi
• 1931: Gandhi Irwin Pact: Called off CDM: 2nd Round Table Conferenece
• 1934: Relaunched CDM
• 1942: The Quit India Movement

Social Work

• Poona Pact (1932): Dr B.R. Ambedkar
• The Hindustani Prachar Sabha (1942) at Wardha (Maharastra)

Books

• Hind Swaraj
• My Experiments with Truth

News Paper

• Harijan (Gujarati)
• Indian Opinion (South Africa)
• Young India (English)

"I cannot possibly bear the idea that a man who has got wealth should get the vote but a man who has got character but no wealth or literacy should have no vote, or that a man who honestly works by the sweat of his brow day in and day out should not have the vote for the crime of being a poor man…".

Women's Suffrage Movement

• Women's struggle for the right to vote during the 1st World war
• USA gave first

Millet

United Nations General Assembly (UNGA) adopted a resolution to declare 2023 as the International Year of Millets. 

Polar Bears

• Canada’s Western Hudson Bay
• Churchill, the town that is known as ‘the Polar Bear Capital of the World’. 

Good Governance Day

• 25 December
• Atal Bihari Vajpayee
• announced in 2014 (Narendra Modi)

e-Governance

• "Good Governance through e-Governance"

Good Governance Report

• Ministry of Communication and Information Technology

Good Governance Index

• 2019
• The Department of Administration Reforms and Public Grievances (DARPG)

Seperation of Powers

 

Advent of Europeans in India

Portuguese (1498)

• Prince Hennry of Portugal (Navigator)
• Treaty of Todesillas (1494): B/w Spain (West) and Portugal (East) [Imaginary line in the Atlantic]
• Bartholomew Dias (1487): Cape of Good Hope (Africa)

Vasco Da Gama (1498):

• Help of  Gujarati - Abdul Majid
• 1501 Returned to India
• Cannanore: Trading Factory
• Calicut, Cannnore, Cochin Commerce centres.

Francisco De Almeida

• Cost of Diu 1507: Egyptian and Gujarat navies - Ameida son Died
• Blue Water Policy (Cartage System)

Alfonso de Albuquerque

• Abolition of Sati

Nino da Cunha

• 1529
• HQ: Cochin to Goa 

Sardar Vallabh Bhai Patel

• Born on 31st October 1875 in Nadiad, Gujarat
• Death 15th December 1950 in Bombay

Headed various Committees of the Constituent Assembly of India

• Advisory Committee on Fundamental Rights. 
• Committee on Minorities and Tribal and Excluded Areas. 
• Provincial Constitution Committee.

 

National freedom movement

• Kheda Satyagraha (1918)
• Bardoli Satyagraha (1928): Title  "Sardar"

Statue of Unity

• 31st October, 2018: 143rt birth anniversary
• tallest: 182 m
• Eight Wonders: Shanghai Cooperation Organization (SCO)

COP15 biodiversity summit

• Delegates committed to protecting 30% of land and 30% of coastal and marine areas by 2030, fulfilling the deal’s highest-profile goal, known as 30-by-30.

Goa Liberation Day

• 19 December, 1961
• ‘Operation Vijay’ undertaken by the Indian armed forces to defeat Portuguese colonial forces and liberate Goa in 1961.

Advent of European

Portuguese

• 1510: Goa: From Sultan of Bijapur: Afonso de Albuquerque

The Portuguese were the first Eutopean to arrive in India and the last to leave.

• 1498: Vasco da Gama, Calicut, Welcomed by the Zamorin
• Trading settlement at calicut, Cochin and Cannanore
• 1st Governor: Francis de Almeida, Blue water policy
• 1509: Afonso de Albuquerque
• 1530: Nino da Cunha: Diu and Bassein from Bahadur Shah of Gujarat

Geminids meteor shower

The constellation for which a meteor shower is named only serves to aid viewers in determining which shower they are viewing on a given night.

SWOT: Surface Water and Ocean Topography

• Surface Water and Ocean Topography
• To conduct a comprehensive survey of the world’s oceans, lakes and rivers for the first time.
• A NASA-led international satellite mission
• Developed by the U.S. space agency in collaboration with its counterparts in France and Canada

SWIFT

• Society for Worldwide Interbank Financial Telecommunications. 
• SWIFT is headquartered in Belgium 

INS Mormugao

• The second of the Project 15B stealth guided missile destroyers built by Mazagon Dock Shipbuilders Limited (MDSL).
• The ship, named after a key port in Goa

Project 15B

• INS Visakhapatanam (November 2021)
• Mormugao, (Dec 2022)
• Imphal, and 
• Surat

Project 15A: built by Mazagon Dock Shipbuilders Limited (MDSL), Mumbai

• The Indian Navy has commissioned three guided missile destroyers of the Kolkata class — INS Kolkata, INS Kochi, and INS Chennai — under the project codenamed 15A.
• Their precursor Delhi class of ships — INS Delhi, INS Mysore, and INS Mumbai.

Link

• The Indian Express
  

Harissa: Spicy

• Harissa is a condiment popular in Tunisia.
• Got special heritage status from UNESCO

Nirbhaya Fund

• The Centre had in 2013 introduced the ‘Nirbhaya Fund’ to help women in distress, provide improved infrastructure and manpower to help women, and create a safer space for them.
• The Nirbhaya Fund has been launched as a non-lapsable fund which is handled by the MoWCD and Ministry of Finance.

Source: The Indian Express

Aurobindo Ghosh

• Aurobindo was a yogi, seer, philosopher and was associated with Indian national movement.
• He held various administrative post in Baroda and Calcutta.
• He took part in the freedom struggle between 1902 and 1910 and during this time he was charged under the ALIPORE BOMB CASE.
• He is credited with publishing Arya magazine between 1914 to 1921 i.e. a periodic magazine which included philosophical messages.
• He is also credited with publishing poem SAVITRI of around 24000 lines.
• English newspaper called Bande Mataram is also associated with him.
• He also developed a kind of Yoga i.e., is known as INTERNAL YOGA.
• He founded a community of spiritual seekers which took place as Sri Aurobindo Ashram.
• He played an instrumental role in setting up Anushilan Samiti and even attended congress sessions.

Organization of Islamic Cooperation (OIC )

• OIC was established at 1969 summit in Rabat (Morocco).
• The organization has 57 countries and India is not a member of the organization.

The headquarter is in Jeddah, Saudi Arabia.

Objective :

To establish solidarity among the member states, supports restoration of complete sovereignty and territorial integrity and combat the defamation of Islam. The decisions regarding membership and granting of observer status are taken by consensus. And this was the prime reason behind the India was not granted membership in 1969 at the behest of opposition from Pakistan. The other decision making at the summit is done by a minimum quorum of two third members and decision is tried to reach by consensus. If the decisions are not reached by consensus the decisions are made by a two third majority.

PRADHAN MANTRI KISAN SAMMAN NIDHI SCHEME (PM-KISAN)

• To provide income support to all land-holding eligible farmer families.
• Central Sector Scheme
• 2018

Mahakaleshwar temple, Ujjain

• It is situated in Ujjain (Madhya Pradesh) on the banks of the river Shipra.
• The Mahakaleshwar Jyotirlinga is among the most eminent of the 12 Jyotirlingas in India.
• The temple complex bears strong influences of the Bhumija, Chalukya, and Maratha architectural styles. 
• It is the only jyotirlinga facing the south
• One of the most famous features of Mahakaleshwar Temple is the Bhasma aarti
• It is believed to be swayambhu i.e. self-manifested 

**

Note 12 Jyotirlingas 

Mapping

 

Navigation with Indian Constellation (NaVIC)

• Navigation with Indian Constellation, is an independent stand-alone navigation satellite system developed by the Indian Space Research Organisation
• NavIC was originally approved in 2006 at a cost of $174 million. It was expected to be completed by late 2011, but only became operational in 2018.
• NavIC consists of eight satellites and covers the whole of India’s landmass and up to 1,500 km (930 miles) from its boundaries.
• NavIC’s use is limited. It is being used in public vehicle tracking in India, for providing emergency warning alerts to fishermen venturing into the deep sea.

Navigation Systems

• Galileo from the European Union,
• Russia-owned GLONASS and 
• China’s Beidou. 
• QZSS, operated by Japan

The Protection of Children from Sexual Offences (POCSO) Act

• The Act came into force on November 14, 2012
• To deal with offences including child sexual abuse and child pornography.
• Act includes punishment for aggravated penetrative sexual assault to be increased to include the death penalty.
• The punishment has increased including the minimum punishment for penetrative sexual assault, which has been increased from seven years to 10 years — and, if the child is below 16 years of age, the minimum punishment has been increased to 20 years.

Western disturbance

• Western disturbances are storms that originate in the Mediterranean region. 
• They bring easterly winds to Delhi, along with a spike in moisture and increased clouding or rainfall. 
• They are regular features in winter. 
• In monsoon and summer, they have more tropical characteristics and bring rain and thunderstorms. 
• In winter, they bring rain and snow over the hills and more moisture to the plains. 
• The cloud cover results in higher minimum temperatures at night and lower day-time or maximum temperatures.

Index For Industrial Production (IIP)

• data released by the National Statistical Office (NSO) 
• The base year for ‘Index For Industrial Production (IIP) was changed to 2011-12 from 2004-05 in the year 2017.

Equal Access to Green cards for Legal Employment (EAGLE) Act of 2021

The White House has supported Congress to pass a legislation that seeks to eliminate the per-country quota on green cards to allow US employers to focus on hiring people based on merit, not their birthplace, a bill if passed would benefit several hundreds of thousands of immigrants specially Indian-Americans.

Electoral Bonds

 Electoral bonds are interest-free bearer instruments (like Promissory Notes) that will be available for purchase from the State Bank of India within a designated window of 10 days in every quarter of the financial year.

Source: The Indian Express

United Nations Convention on Biological Diversity (CBD)

 Aichi Targets

• adopted during the 2010 CBD summit in Nagoya, located in Japan’s Aichi prefecture, included goals such as reducing deforestation by at least half during the coming decade and curbing pollution so that it no longer harmed ecosystems.

Sector of Economy

The real sector of an economy is the key section as activities of this sector persuade economic output and is represented by those economic segments that are essential for the progress of the GDP of the economy. For instance, farmers harvesting their crops or textile mills converting raw cotton into fabrics ensure the increase of economic output and in turn progress of GDP. The sector is crucial for the sustainability of the economy because of its productive capability to meet nations’ aggregate demand.

The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers. The financial sector generates a good portion of its revenue from loans and mortgages. This sector comprises a broad range of industries including banks, investment companies, insurance companies, and real estate firms. Thus, a commercial bank lending money to a trading company or a corporate body issuing rupee-denominated bonds overseas constitutes  financial sector activities and not real sector activities.

Source: Vision IAS

Consumer Protection (E-Commerce) Rules, 2020

The e-commerce entity (also foreign-owned) is any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.

Marketplace based model of e -commerce means providing an IT platform by an e-commerce other hands entity on a digital & electronic network to act as a facilitator between buyer and seller. On other hand, Inventory based model of e-commerce means an e-commerce activity where an inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly. However, FDI is not permitted in an inventory based model of e-commerce marketplace-based

 

According to guidelines for FDI (Foreign Direct Investment) on E-Commerce, an E-commerce entity providing a marketplace will not exercise ownership or control over the inventory i.e. goods purported to be sold. Such ownership or control over the inventory will render the business into the inventory-based model. Inventory of a vendor will be deemed to be controlled by an e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies.

Source:  Vision IAS

Inflation-indexed bonds

the Inflation-indexed bonds in India were issued by the Reserve Bank of India (RBI) in 2013 and were benchmarked to Wholesale Price Index (WPI).

Inflation-indexed bonds are financial instruments that attempt to protect the bonds' purchasing power by tying interest and principal payments to an index of price changes.

Indexed bonds include two types of compensation, a real rate of return plus compensation for the erosion of purchasing power. The inflation component on the principal will not be paid with interest but the same would be adjusted in the principal by multiplying the the principal with index ratio (IR). At the time of redemption, the adjusted principal or the face, whichever is higher, would be paid. The interest rate will be provided protection against inflation by paying fixed coupon rate on the principal adjusted against inflation. 

Economists have argued that inflation-indexed bonds could reduce government borrowing costs. If the market overestimates future inflation, the government will reduce borrowing costs by issuing inflation-indexed bonds rather than nominal bonds. This may occur because, for example, investors• expectations are not completely forward-looking or rational. Alternatively, the government, because it is able to influence inflation through its policies, may have better information about the future course of inflation, or perhaps has more faith in its commitment to contain it than the public does. In these cases a treasury can lower its costs by issuing indexed bonds.

The government can reduce the coupon rates on its borrowing by way of IIBs by reducing inflationary trends.

Extant tax provisions will be applicable on interest payments and capital gains on IIBs. There will be no special tax treatment for these bonds.

Intervention by RBI

A central bank such as the Reserve Bank of India (RBI), periodically intervenes in the debt market to influence the interest rates and rate of inflation in the economy. 

If RBI feels inflation is too high, it will sell government securities, and suck money out of the system. This act will push up interest rates in the economy, and businesses will cut back on capital expenditure financed by loans, reducing the demand for money.

Central banks also intervene periodically in foreign exchange markets.

If the rupee is rapidly depreciating, RBI will sell dollars in the market. This will increase the supply of dollars and the demand for rupees, causing the rupee price of the dollar to come down. 

On the contrary, if the rupee is rapidly appreciating, RBI will buy dollars and inject rupees into the economy. This will increase the demand for dollars and the supply of rupees, thereby leading to an increase in the rupee price of the dollar.

If interest rates in the US or the EU were to fall, FIIs (Foreign Institutional Investors) will ramp up investments in India. The resultant demand for rupees will cause the rupee to appreciate. In response, RBI will buy dollars and inject rupees into the system.

Source: VisionIAS

Exchange Rate

A nominal Effective Exchange Rate (NEER) is a measure of the value of a currency against a weighted average of several foreign currencies. 

• The nominal exchange rate is the amount of domestic currency needed to purchase foreign currency. 
• If a domestic currency increases against a basket of other currencies inside a floating exchange rate regime, NEER is said to appreciate. 
• If the domestic currency falls against the basket, the NEER depreciates..
• An increase in NEER indicates an appreciation of the local currency against the weighted basket of currencies of its trading partners. 

The real effective Exchange Rate (REER) is the real effective exchange rate (a measure of the value of a currency against a weighted average of several foreign currencies) divided by a price deflator or index of costs. 

In simple words, a nation's nominal effective exchange rate (NEER), adjusted for inflation in the home country, equals its real effective exchange rate (REER).

An increase in REER implies that exports become more expensive and imports become cheaper; therefore, an increase indicates a loss in trade competitiveness.

If inflation is in an increasing trend in domestic nation relative to inflation in other countries, there is likely to cause an increasing divergence between NEER and REER.

Source: VisionIAS