NEWS:Equity investors stay put even as ‘smart money’ leaves India
GS-3 economy
July 2025 saw a sharp rise in domestic equity mutual fund inflows even as foreign portfolio investors (FPIs) and company promoters reduced their stakes in Indian equities, indicating a divergence in investment sentiment.
- Equity MF Inflows: Net inflows rose 81% to ₹42,702 crore in July 2025 from ₹23,587 crore in June.
- SIP Contributions: Increased 4.1% to ₹28,464 crore from ₹27,269 crore.
- Domestic Sentiment: AMFI CEO Venkat Chalasani attributed continued inflows to investor confidence in India’s long-term growth despite temporary volatility from US tariffs.
- FPI Activity: FPIs sold a net ₹17,741 crore in Indian equities as of July 31, 2025.
- Foreign Exit Pattern: Elara Capital noted “smart money” funds that drove the 2023–24 rally have been redeeming since late 2024, shifting towards macro-focused ETFs.
- Historical Parallels: Current redemption trend resembles patterns seen before market downturns in 2007 and 2011.
- Promoter Holdings: Private company promoters’ stake fell to 46.9% in June 2025 — down 70 bps QoQ and 170 bps YoY.
Foreign Portfolio Investment (FPI)
Foreign Portfolio Investment (FPI) refers to investments made by foreign entities in financial assets such as stocks, bonds, and other securities of a country.
It is distinct from Foreign Direct Investment (FDI), as it does not involve acquiring control over a business.
Key Characteristics of FPI
Passive investment: Investors do not participate in the management of the company.
Short-term focus: Aims for capital appreciation rather than long-term strategic interests.
Enhances market liquidity: Provides capital flow into financial markets, increasing efficiency and investment potential.
Sensitive to market sentiments: FPI is highly volatile, as investors can quickly withdraw funds in response to economic or political instability.
FPI Policy in India
A foreign investor can hold up to 10% of the total paid-up capital of an Indian company without being classified as an FDI.
If the holding exceeds 10%, it is reclassified as Foreign Direct Investment (FDI).
Regulated by SEBI, ensuring compliance with financial laws
NEWS:India successfxully repatriated the Piprahwa relics, believed to be linked to Lord Buddha,
GS-1 art and culture
from Sotheby’s auction in Hong Kong, marking a milestone in cultural diplomacy and heritage preservation.
- Piprahwa relics excavated in 1898 from a stupa in Uttar Pradesh; linked to Lord Buddha and early followers.
- Taken during the colonial era, they were scheduled for auction by Sotheby’s in Hong Kong.
- India halted the auction through diplomatic intervention and secured their return.
- Relics now housed in the National Museum, ensuring public access.
- Recovery achieved via public-private partnership with Godrej Industries Group.
- Set precedent for combining private sector resources with state authority in heritage recovery.
- Raised global awareness of India’s role in safeguarding Buddhist heritage.
- Piprahwa is an archaeological site in Siddharthnagar district, Uttar Pradesh, near the India–Nepal border.
- It is associated with ancient Kapilavastu, the capital of the Shakya clan (to which Gautama Buddha belonged).
2. Discovery & Excavations
- First excavated in 1898 by William Claxton Peppe, a British landowner.
- A large stupa was uncovered containing stone caskets with Brahmi inscriptions.
- The inscription claimed the relics were of the Buddha, placed there by the Shakya clan.
- Later excavations in the 1970s by the Archaeological Survey of India (ASI) found more relics, stupas, and monastic complexes.
NEWS:Rift between two blocs continues in Geneva Plastics Treaty negotiations
GS-3 environment and ecology
Negotiations under the UN Environment Programme for a legally binding global plastics treaty remain deadlocked between two blocs — one calling for production caps and the other prioritising waste management. India has aligned with the Like Minded Countries (LMC) opposing production cuts.
- Negotiation Platform: Intergovernmental Negotiating Committee (INC) on Plastic Pollution under UNEP since 2022; treaty to address land and ocean plastic pollution.
- Two Blocs:
- High Ambition Coalition (HAC): ~80 countries including EU members, led by Norway & Rwanda; supports capping plastic and polymer production.
- Like Minded Countries (LMC): Iran, Saudi Arabia, Kuwait, Bahrain, China, Cuba; focus on waste management, oppose production caps.
- India’s Position: Expressed solidarity with LMC; advocates waste management, behavioural change, and no cap on primary polymer production.
- Industry Influence: All India Plastic Manufacturers Association submitted concerns against caps, citing unmet material needs in multiple sectors.
- Global Trade Analysis (IEEFA, July): Asia dominates global trade in primary plastic polymers; US largest North American exporter; low African & South American trade volumes.
- US Stance: No support for production cuts despite earlier calls for a “strong treaty.”
United Nations Environment Programme (UNEP)
1. Introduction
- Established: 5 June 1972 (Stockholm Conference on the Human Environment).
- Headquarters: Nairobi, Kenya.
- Mandate: Coordinate the UN’s environmental activities, assist developing countries in implementing environmental policies.
2. Functions
- Conducts environmental assessments and publishes reports (e.g., Global Environment Outlook).
- Promotes international environmental agreements (e.g., Montreal Protocol, Minamata Convention).
- Supports sustainable development and climate change adaptation.
- Works on biodiversity conservation, pollution control, and ecosystem restoration.
NEWS:A Court ruling with no room for gender justice
GS-2 polity and governance
In Shivangi Bansal vs Sahib Bansal (July 2025), the Supreme Court upheld an Allahabad High Court order suspending arrest/coercive action for two months in Section 498-A IPC cases, sparking concerns over women’s safety and judicial overreach.
- SC upheld HC’s directive of a two-month “cool-off” period before arrest under Section 498-A IPC (now Section 85 of BNS).
- Directed formation of Family Welfare Committees for preliminary case review.
- Section 498-A penalises cruelty by husband or relatives, including dowry harassment, suicide abetment, and injury to health.
- Judgment issued in an individual dispute without detailed state consultation or socio-political analysis.
- Suspension applies even when strong evidence exists, potentially risking complainant safety.
- Court’s rationale partly based on alleged misuse of the law, despite lack of comprehensive empirical evidence.
- NCRB 2022: 1,34,506 cases registered; conviction rate ~18%, higher than several other offences.
Supreme Court of India
1. Introduction
- Established: 28 January 1950 (under Article 124 of the Constitution).
- Apex judicial body of India & final court of appeal.
- Guardian of the Constitution and protector of Fundamental Rights (Article 32).
- Motto: “Yato Dharmastato Jayaḥ” – Where there is Dharma, there is Victory.
2. Composition
- Chief Justice of India (CJI) + maximum 33 other judges (Article 124(1)).
- Judges appointed by the President on the recommendation of the Collegium system.
- Eligibility:
- Judge of a High Court for at least 5 years, or
- Advocate of a High Court for at least 10 years, or
- Distinguished jurist (in President’s opinion).
MAINS MOCK QUESTION
“Foreign Portfolio Investment (FPI) plays a crucial role in deepening India’s financial markets, but it also exposes the economy to external shocks.”
