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- Net Foreign Direct Investment (FDI) into India declined sharply by over 96% in 2024–25 compared to the previous year. This drop was mainly due to increased capital outflows by foreign companies and rising overseas investments by Indian firms.
- About FDI:
- FDI refers to investments made by residents outside India through equity in unlisted Indian companies or by acquiring 10% or more equity in listed companies. The Department for Promotion of Industry and Internal Trade (DPIIT) oversees FDI policies. FDI is vital for India’s economy as it provides non-debt finance, brings in capital, technology, and global business practices, fostering job creation and sectoral growth.
- The United Kingdom has officially transferred sovereignty of the Chagos Archipelago to Mauritius, ending decades of dispute. Located in the central Indian Ocean, around 1,600 km south of India, the archipelago consists of seven atolls, with Diego Garcia being the largest and most strategic—home to a key U.S. military base.
- Originally purchased by Britain in 1965 for £3 million, Mauritius has long maintained that it was coerced into the agreement during its decolonization.
- The region is also ecologically significant, with the Great Chagos Bank housing vibrant coral reefs. Under the new arrangement, the UK will pay Mauritius $136 million annually to lease the base for 99 years.
- The New Development Bank (NDB) has approved investment projects totaling over USD 40 billion, primarily in clean energy, infrastructure, and sustainable development. With new members joining, such as Algeria, the bank is poised to extend these opportunities to a broader group of emerging and developing economies.
- About the NDB
- Headquartered in Shanghai, the NDB was established in 2015 by BRICS nations—Brazil, Russia, India, China, and South Africa—to fund infrastructure and development projects across emerging markets. Its membership now includes Bangladesh, UAE, Egypt, and Algeria, with Uruguay set to join soon. The bank’s authorized capital stands at $100 billion, equally shared by its five founding members.
- Relevance of Regional Financial Institutions
- Institutions like the NDB play a vital role in promoting inclusive development and closing investment gaps. India alone has over 20 active NDB-supported projects (worth $4.87 billion), spanning sectors like transportation and water conservation, strengthening regional cooperation and South-South partnerships.