Why does the RBI want to keep cryptocurrencies out of India’s banking system?
What happened
The RBI told Parliament's Standing Committee on Finance on July 2, 2025 that cryptocurrencies threaten monetary sovereignty and should not be legalised. The central bank advocated a containment strategy to insulate banks from virtual digital assets (VDAs). India currently has 54 FIU-registered crypto providers, approximately 39.3 million verified users, and crypto holdings worth Rs 20,437 crore. The government taxes VDA gains at 30% with 1% TDS, yet no comprehensive regulatory law exists.
Why it matters
India's crypto policy is caught in a fundamental contradiction: the state taxes and counts a market it refuses to legitimise. The RBI's containment pitch rests on three pillars — financial stability, monetary sovereignty, and anti-money laundering — but each runs into a hard structural limit.
On financial stability, ring-fencing domestic banks is logical given crypto's volatility, but most activity has already migrated offshore. The RBI concedes it cannot easily supervise crypto held by offshore entities, meaning containment disciplines only the compliant onshore minority.
On monetary sovereignty, the RBI's critique of stablecoins is well-founded — dollar-pegged tokens can hollow out rupee demand — but its proposed substitute, the digital rupee (CBDC), has seen tepid adoption since its December 2022 launch, unable to displace the deeply entrenched UPI ecosystem.
On anti-money laundering, the government's own admission that it lacks a real-time crypto transaction tracking system undermines the case that prohibition-lite is working.
The deeper fault line is jurisdictional. SEBI has signalled willingness to regulate VDAs as securities, creating a potential multi-regulator framework. The RBI's blanket containment leaves no room for this. The Supreme Court struck down the RBI's earlier 2018 circular banning banks from crypto dealings in 2020, signalling that outright exclusion without legislation is legally fragile. Parliament's Standing Committee report, expected soon, will decide whether India regulates crypto by isolation or by dividing oversight.
India bets on critical minerals, rare earths and chips partnerships
What happened
India is aggressively securing critical minerals and rare earth supply chains amid global geopolitical shifts. Key partnerships with Australia, the USA, Japan, and the EU under frameworks like the Mineral Security Partnership (MSP) and bilateral deals target lithium, cobalt, nickel, and rare earths. The National Critical Mineral Mission (2025) allocates ₹16,300 crore for domestic exploration and overseas acquisition. Simultaneously, India's semiconductor mission (India Semiconductor Mission) aims to reduce chip import dependence, with approved fab projects in Gujarat and Assam.
Why it matters
Critical minerals — lithium, cobalt, nickel, graphite, rare earth elements (REEs) — are foundational to the clean energy transition, defence systems, and digital infrastructure. China currently controls roughly 60% of global REE mining and over 85% of processing, making supply chain diversification a strategic imperative globally and for India specifically.
India's vulnerability is acute: it imports nearly 100% of its lithium, much of its cobalt, and most semiconductor chips. This creates a triple dependency — energy, technology, and defence — that can be weaponised in geopolitical standoffs, as seen when China restricted gallium and germanium exports in 2023.
The National Critical Mineral Mission (launched 2025) addresses this through three tracks: (1) domestic exploration in Rajasthan, Jharkhand, Odisha, and the Himalayan belt; (2) overseas mineral asset acquisition via KABIL (Khanij Bidesh India Ltd) in Argentina, Australia, and Chile; and (3) recycling and urban mining from e-waste.
On semiconductors, the India Semiconductor Mission (ISM) under MeitY cleared projects by Tata Electronics, CG Power-Renesas, and Micron, with fabs in Dholera (Gujarat) and Morigaon (Assam). These chips initiatives are linked to the PLI scheme and the broader 'Atmanirbhar Bharat' goal. Geopolitically, India's participation in the Quad's Critical and Emerging Technology (iCET) initiative with the USA and MSP multilateral framework reflects a strategic technology alignment with the Global West — a significant foreign policy signal.
Government Clears ₹1,238cr for 5 ITI Clusters; Rolls Out PM-SETU Scheme Nationwide
What happened
The Ministry of Skill Development approved ₹1,237.58 crore for upgrading five Industrial Training Institute (ITI) clusters across India. Simultaneously, the PM-SETU (Skill Enhancement and Training for Upliftment) scheme was rolled out nationwide. This investment aims to modernise ITI infrastructure, introduce industry-aligned trade courses, and improve placement outcomes. The cluster-based model consolidates resources, enabling hub-and-spoke arrangements among ITIs to optimise trainer availability, equipment sharing, and curriculum standardisation under one coordinated framework.
Why it matters
India's skill gap is one of its most cited structural weaknesses: over 65% of the workforce lacks any formal vocational certification, even as manufacturing-led growth under PLI schemes demands a technically proficient labour pool. ITIs, with roughly 14,000 institutions enrolling nearly 24 lakh trainees annually, are the backbone of this ecosystem — yet chronic underinvestment has left most facilities outdated, misaligned with industry needs, and poorly connected to employment markets.
The ₹1,237.58 crore cluster upgradation solves a classic public-goods problem: individually, most ITIs lack the critical mass to invest in CNC machines, EV repair labs, or AI-assisted training modules. The cluster model creates a hub ITI supported by 3–5 spoke ITIs, pooling infrastructure and faculty. This mirrors Germany's dual apprenticeship system — a frequent UPSC reference point.
PM-SETU's nationwide rollout is significant because it institutionalises Recognition of Prior Learning (RPL), short-term skill certificates, and bridge courses linking informal workers to formal certification. For UPSC GS3, this connects to multiple themes: human capital formation, demographic dividend, SDG-8 (Decent Work), National Education Policy 2020's emphasis on vocational integration, and the challenge of measuring 'quality' skilling versus mere enrolment numbers. The scheme also has a social equity dimension — targeting women, SC/ST communities, and migrants.
