Foreign Exchange & Foreign Trade

📊 High-Yield Data & Statistical Fact Sheet

Cue Words	Notes
Forex Reserve & Import Cover	**Forex Reserves**: Reached **$505.7 Billion+**, ranking among the top 5 globally. **Import Cover**: India's forex cover of imports stood at **14.8 months** (against traditional 3-month rule).
Guidotti-Greenspan Rule	Forex reserves must cover 100% of short-term external debt (falling due within 1 year). India's short-term debt to forex reserves ratio stands comfortably at ~20.8%.
Exchange Rate System Evolution	**1947–71**: Par Value System (Bretton Woods, pegged to USD ±1%). **1971–75**: Pegged to UK Pound Sterling. **1975–92**: Pegged to a trade-weighted basket of currencies. **1992–93**: **LERMS** (Liberalised Exchange Rate Management System - Dual rate: 40% official, 60% market). **1993–Present**: **Unified Exchange Rate System (UERS)** following a **Managed Float (Dirty Float)**.
Current Account Convertibility	**100% Fully Convertible since 1994** (IMF Article VIII compliance).
Capital Account Convertibility	**Partially Convertible**. Pre-conditions specified by **Tarapore Committees (I in 1997, II in 2006)**.
Top Export & Import Partners	**Top Export Destinations**: **USA** > **China** > **UAE** > Hong Kong > Singapore. **Top Import Sources**: **China** > **USA** > **UAE** > Hong Kong > Saudi Arabia. **FY26 shift**: **China overtook the USA as India's largest trading partner** — bilateral trade of **$151.1 Billion** (exports +36.66% to $19.47B, imports +16% to $131.63B). US trade: exports $87.3B (+0.92%), imports $52.9B (+15.95%).
Cumulative Trade, April-November 2024 (Interim, Pre-Full-Year)	2024 **Total exports** (merchandise + services), **Apr-Nov 2024**: **US$536.25 Billion**, up from **US$498.33 Billion** in Apr-Nov 2023 (**+7.61%**) — an earlier 8-month data point ahead of the full FY2024-25 figures below. **Merchandise exports**: **US$284.31 Billion** (+2.17%); **services exports**: **US$251.94 Billion** (+14.48%), with a **services trade surplus of US$119.48 Billion**. **Non-petroleum exports** (Apr-Nov 2024): **US$239.70 Billion** (+7.38%), surpassing the prior **Apr-Nov 2022 record of ~US$233 Billion**. **November 2024 alone**: total exports **US$67.79 Billion** (+9.59% YoY); monthly **trade deficit widened to -US$19.84 Billion**. Top export growth drivers: **Electronic Goods (+54.72%)**, **Rice (+95.18%)**, **Engineering Goods (+13.75%)**.
FY2024-25 Full-Year Trade Data (Apr-Mar, Provisional)	2025 **Total exports** (merchandise + services), FY2024-25: **US$820.93 Billion** (+5.50% YoY from US$778.13 Billion in FY2023-24); **total imports**: **US$915.19 Billion** (+6.85% YoY); **overall trade deficit**: **US$94.26 Billion**. **Merchandise exports**: **US$437.42 Billion** (nearly flat, +0.08%); **merchandise imports**: **US$720.24 Billion**; **merchandise trade deficit**: **US$282.83 Billion**. **Services exports**: **US$383.51 Billion** (+12.45%); **services imports**: **US$194.95 Billion**; **services trade surplus**: **US$188.57 Billion**. **Fastest-growing export categories**: **Coffee (+40.37%)**, **Tobacco (+36.53%)**, **Electronic Goods (+32.47%)**, **Rice (+19.73%)**. 2025 **RBI report figure (mild upward revision)**: India's total exports grew **6.01% to a record US$824.9 billion** in FY2024-25, up from **US$778.1 billion** in FY2023-24 — a slightly higher estimate than the Commerce Ministry's US$820.93 billion figure above, from a different source/timing.
Latest Trade Data — Jan 2026 & Cumulative Apr-Jan FY26	2026 **Jan 2026 total exports** (merchandise + services, estimated): **US$80.45 Billion**, up **13.17% YoY**. **Cumulative April-January 2025-26**: Total exports **US$720.76 Billion** (+6.15% YoY); total imports **US$823.41 Billion** (+6.54% YoY); overall **trade deficit widened to US$102.65 Billion** (from US$93.83 Billion in April-January 2024-25). **Merchandise trade deficit, April-January 2025-26**: **US$283.23 Billion**.
Trade Surplus & Deficit Partners	**Largest Trade Surplus**: **USA** > Bangladesh > Nepal > UK > Netherlands. **Largest Trade Deficit**: **China** > Iraq > Saudi Arabia > Switzerland > Indonesia. **China deficit at record high**: **$112.6 Billion** in FY26 (up from $99.2B in FY25).
US Tariff Dispute (2025-26)	US imposed a **25% "reciprocal" tariff** plus an additional **25% penalty** (tied to India's Russian oil imports) — totaling **50%** on Indian exports. **Reversed 20 Feb 2026**: US Supreme Court struck down the IEEPA-based reciprocal tariffs; replaced by a flat **10% Section 122 surcharge** applying to most countries regardless of origin.
Top Commodity Profile	**Top Export Items**: Petroleum products > Drug formulations > Pearls & precious stones. **Top Import Items**: Crude petroleum > Petroleum products > Gold > Telecom instruments.
DGFT Prohibits All Imports from Pakistan (2025)	2025 **DGFT Notification No. 06/2025-26**: prohibited **direct or indirect import/transit of all goods originating in or exported from Pakistan** to India, effective immediately, "in the interest of national security and public policy" — inserted as new **Para 2.20A in FTP 2023**.
RoDTEP Export Scheme	Rolled out on January 1, 2021 replacing MEIS. Refunds embedded central, state, and local taxes/duties on export inputs.
India-UK FTA — Negotiations Launched (Jan 2022)	2022 India-UK FTA negotiations formally launched 13 January 2022 in New Delhi by Commerce Minister Piyush Goyal and UK Secretary of State for International Trade Anne-Marie Trevelyan — this is the origin/launch event; the deal was eventually signed as CETA on 24 July 2025 and entered into force 15 July 2026 (see next row). Target set: double bilateral trade by 2030 (goal fixed by PM Modi and UK PM Boris Johnson, May 2021). Expected gains for India: labour-intensive sectors — Leather, Textile, Jewellery, processed Agri-products; Marine Products exports via recognition of 56 Indian marine units; possible Mutual Recognition Agreements (MRAs) on Pharma; services potential in IT/ITES, Nursing, education, healthcare (incl. AYUSH), audio-visual services; India sought special arrangements for movement of people (Mode 4). Parties agreed to explore a possible "Interim Agreement" for quicker gains during the negotiation process.
India-UK CETA (2025-26)	Concluded 6 May 2025, signed 24 July 2025, entered into force 15 July 2026. 99% of Indian goods into the UK and 90% of UK goods into India now duty-free/reduced. Bilateral trade (~$56 Billion) targeted to double by 2030.
Export Promotion Mission — NIRYAT PROTSAHAN	2026 **Two key interventions** launched under the **NIRYAT PROTSAHAN** sub-scheme of the **Export Promotion Mission** (Ministry of Commerce & Industry, 2 Jan 2026) to strengthen **MSME exports**: 1. **Interest subvention** for pre- and post-shipment export credit — a **base 2.75% subvention** on rupee export credit, with additional incentive possible for exports to notified under-represented/emerging markets. 2. **Collateral guarantee** for export credit, to improve MSME access to finance.
Union Budget 2025-26 — Exports (4th Engine)	2025 **Export Promotion Mission** announced (jointly driven by Ministries of Commerce, MSME, and Finance, with sectoral/ministerial targets) — later operationalised via the NIRYAT PROTSAHAN sub-scheme above. **'BharatTradeNet' (BTN)**: A unified platform for international trade documentation and financing solutions. **National framework for Global Capability Centres (GCCs)** in emerging tier-2 cities.
India-EU FTA (2026)	Negotiations concluded 27 January 2026 — the largest trade deal either side has ever concluded. Grants immediate duty-free access on 70.4% of Indian tariff lines (covering ~90.7% of India's export value to the EU), rising to 99% at full implementation. Now undergoing legal scrubbing and ratification by all 27 EU member states + European Parliament.
Trade Deficit Contraction (2025)	India's trade deficit narrowed by over 54% to $9.9 Billion (2025) from $21.7 Billion (2024). Driven by robust merchandise and services exports alongside a fall in merchandise imports.
Trade Openness Trend (Post-1991)	**Trade/GDP ratio**: Rose from **15.5% (1991)** to **55.6% (2011)**, then eased to **37.9% (2020)** as GDP growth outpaced trade growth. **Net FDI/GDP**: Rose from **0.03% (1991)** to **2.42% (2020)**, reflecting deepening global integration since the 1991 reforms.

📈 FY2023-24 Full-Year Trade Data — Record Exports (April 2024)

2024

Cue Words	Notes
Overall Exports — New All-Time Record	India's overall exports (merchandise + services), FY2023-24: USD 776.68 Billion — a new all-time record, marginally surpassing FY2022-23's USD 776.40 Billion (+0.04%), achieved despite global headwinds. Merchandise exports: USD 437.06 Billion (down from USD 451.07 Billion in FY2022-23). Services exports: USD 339.62 Billion (up from USD 325.33 Billion in FY2022-23).
Trade Deficit — Significant Improvement	Overall trade deficit improved 35.77%, narrowing to USD 78.12 Billion (from USD 121.62 Billion in FY2022-23). Merchandise trade deficit improved 9.33% to USD 240.17 Billion (from USD 264.90 Billion).
Key Growth Drivers & March 2024	Electronic Goods exports +23.64% (USD 23.55bn → 29.12bn); Drugs & Pharmaceuticals +9.67% (USD 25.39bn → 27.85bn); Engineering Goods +2.13% (USD 107.04bn → 109.32bn). March 2024 alone: highest monthly merchandise exports of FY2023-24, at USD 41.68 Billion.

> **Summary**: This FY2023-24 figure (USD 776.68bn overall exports, a marginal-growth record) is the earliest full-year data point in this section's trade-growth series, preceding FY2024-25's USD 820.93bn (+5.50%, see Economic Survey snapshot and full-year table below) and FY2025-26's USD 860.09bn — with the sharp 35.77% trade-deficit improvement in this year driven by electronics, pharma, and engineering-goods export growth.

📉 Economic Survey 2024-25 — External Sector Snapshot

2025

• Exports (merchandise + services) grew +6% YoY (9 months FY25); services exports +11.6%.
• India is the 2nd largest exporter in Telecom/Computer/Information Services, with a 10.2% global share (per UNCTAD).
• Current Account Deficit (CAD) at 1.2% of GDP (Q2 FY25).
• Gross FDI inflows at $55.6 billion (8 months FY25), +17.9% YoY from $47.2 billion.
• Forex reserves at $640.3 billion (Dec 2024) = 10.9 months of import cover, ~90% of external debt.
• External debt/GDP ratio: 19.4% (Sep 2024).

1. FOREIGN EXCHANGE RATE REGIMES & EVOLUTION

Cue Words	Notes
Fixed Exchange Rate	Rate fixed by central bank/government. Provides price certainty but requires massive forex reserves and sacrifices monetary policy independence. **Devaluation**: Official reduction in currency value by central bank under fixed regime (e.g. India in July 1991).
Floating Exchange Rate & Managed Float	**Free Float**: Market forces of demand and supply determine currency rate without intervention. **Managed Float (Dirty Float)**: Currency rate determined by market, but central bank intervenes (buying/selling USD) to contain excessive volatility (**India's System**). **Depreciation**: Automatic fall in currency value under market supply-demand forces.
NEER vs REER	**NEER (Nominal Effective Exchange Rate)**: Weighted average of bilateral exchange rates against a trade partner currency basket. **REER (Real Effective Exchange Rate)**: NEER adjusted for inflation differentials. **REER > 100 indicates overvaluation / loss of export competitiveness**.
Big Mac Index	Informal measure of Purchasing Power Parity (PPP) developed by The Economist based on McDonald's Big Mac price across nations.
RBI Forex Sterilization	During capital surges, RBI buys USD to prevent sharp Rupee appreciation, injecting domestic Rupees into banks. To prevent inflation, RBI sterilizes liquidity by selling G-Secs or Market Stabilization Scheme (MSS) bonds.

2. RUPEE CONVERTIBILITY & INTERNATIONAL CONCEPTS

Cue Words	Notes
Current Account Convertibility Rules	Freedom to convert local currency for trade in goods/services, interest payments, and worker remittances under **IMF Article VIII**. **Exceptions**: >10,000 tourism foreign exchange, >1 Lakh medical/education, and lottery/gambling remittances.
Capital Account Convertibility (CAC) Pre-conditions	**Tarapore Committee Recommendations**: Fiscal Deficit ≤ **3.5% of GDP**. Inflation Target **3%–5%**. Reduction of Gross NPAs ≤ **3%**. Setup of Consolidated Sinking Fund for debt.
Liberalised Remittance Scheme (LRS)	Permits resident individuals to freely remit up to $250,000 per financial year for permissible current or capital account transactions.
Dutch Disease	Economic phenomenon where a sudden boom/resource discovery causes heavy capital inflows, inflating currency value and harming manufacturing export competitiveness.
Currency Swap Agreement	Bilateral central bank contract to exchange equivalent funds in local currencies to hedge forex risk and finance trade during liquidity crunches.

3. STAGES OF TRADE INTEGRATION & EXPORT SCHEMES

Cue Words	Notes
1. Preferential Trade Area (PTA)	Lowest integration tier where member countries reduce tariffs on select specified goods (e.g. SPARTECA).
2. Free Trade Area (FTA)	Elimination of tariffs and quotas on substantially all trade among member countries (e.g. SAFTA, AFTA).
3. Customs Union	Free Trade Area + adoption of a Common External Tariff (CET) on imports from non-member nations (e.g. GCC, EAC).
4. Common Market	Customs Union + Free movement of Capital and Labour across member borders.
5. Economic Union	Common Market + Harmonized fiscal and monetary policies among member states.
6. Monetary Union	Complete integration with Common Currency and single central bank (e.g. Eurozone).
RoDTEP Scheme (WTO-Compliant)	Replaced MEIS (Jan 1, 2021). Reimburses un-refunded central, state, and local taxes/duties embedded in export products.
EPCG Scheme	Export Promotion Capital Goods scheme allowing import of capital machinery at Zero Customs Duty against an export obligation of 6x duty saved over 6 years.
SCOMET Regulations	Special Chemicals, Organisms, Materials, Equipment & Technologies list regulated by DGFT for dual-use (civilian & military) export licensing.
Duty Drawback Scheme	Refunds customs/excise duty paid on imported inputs used in manufacturing exported goods, to keep Indian exports duty-neutral and competitive.
District Export Hub Initiative	Aims to identify export-potential products/services at the district level and build local infrastructure/institutional support to boost grassroots export capacity.
MEIS & SEIS (FTP 2015-20 — RoDTEP's Predecessors)	**MEIS (Merchandise Exports from India Scheme)**: Merged 5 older duty-scrip schemes (Focus Product, Market Linked Focus Product, Focus Market, Agri Infra Incentive, VKGUY) into one freely-transferable scrip with no end-use conditions. **SEIS (Service Exports from India Scheme)**: Replaced SFIS; applied to "Service Providers located in India" (not just "Indian" providers), regardless of ownership. Both were WTO-incompatible export subsidies and were **replaced by RoDTEP on 1 Jan 2021**. FTP 2015-20 targeted raising India's goods+services exports from **$465 Billion (2013-14)** to **$900 Billion (2019-20)**, and global export share from **2% to 3.5%**.

4. EXPORT PROMOTION BODIES & LEGACY RTAs

Cue Words	Notes
Statutory Commodity Boards (Dept. of Commerce)	**Coffee Board** (1942, Bengaluru), **Rubber Board** (1947, Kottayam), **Tea Board** (1953, Kolkata), **Tobacco Board** (1975, Guntur), **Spices Board** (1986, Kochi) — each a statutory body promoting production, R&D, quality standards, and exports of its respective commodity.
Other Statutory Export Bodies	**Export Inspection Council (EIC)**: Pre-shipment quality inspection under the Export (Quality Control and Inspection) Act, 1963. **MPEDA** (1972, Kochi): Marine Products Export Development Authority. **APEDA** (1986, New Delhi): Agricultural and Processed Food Products Export Development Authority. **IIFT** (New Delhi) & **IIP** (Mumbai): Indian Institute of Foreign Trade (deemed university) and Indian Institute of Packaging — training/research bodies.
Advisory & Apex Trade Bodies	**Board of Trade (BoT, 1989)**: Chaired by Commerce & Industry Minister; advises on export-import policy. **Export Promotion Board (EPB)**: Chaired by Cabinet Secretary; inter-ministerial coordination for export growth. **FIEO**: Apex body of India's export promotion organisations. **DGAD**: Directorate General of Anti-Dumping and Allied Duties (est. 1998) — recommends anti-dumping/countervailing duties.
Legacy RTAs & Trade Groupings	**SAFTA** (in force Jan 1, 2006): Zero customs duty from India to LDC members (Afghanistan, Bangladesh, Bhutan, Maldives) on all but ~25 sensitive items. **GSTP (Global System of Trade Preferences, 1988)**: Tariff preferences among developing countries; India offers a 20% margin of preference generally and 25% to LDC participants. **BIPA (Bilateral Investment Promotion & Protection Agreement)**: India's bilateral alternative to the World Bank's ICSID (of which India is not a member) for investor protection.

5. GLOSSARY: TEXTILE QUOTA REGIME, TARIFF FORMULAE & TRADE PRINCIPLES

Cue Words	Notes
Multi-Fibre Arrangement (MFA) & Its Phase-Out	MFA (1974) allowed bilaterally-negotiated selective quantitative restrictions (quotas) on textile/clothing trade — a major departure from GATT's non-discrimination principle. Replaced from 1 January 1995 by the WTO's Agreement on Textiles and Clothing (ATC), which phased out quotas over 10 years (16%/17%/18%/49% integration in four stages) — full dismantling completed 31 December 2004. India was considered the second-largest beneficiary of quota dismantling after China, given its integrated fibre-to-fashion textile industry.
Swiss Formula (Tariff-Cut Method)	A non-linear tariff-reduction formula (used in WTO NAMA industrial-goods negotiations) under which cuts are proportionally steeper for initially higher tariffs, unlike a linear formula's flat percentage cut. Uses separate reduction coefficients for developed vs developing countries; India sought a coefficient gap of at least 25 points to offset the formula's inherent bias favouring countries with already-low tariffs.
Most Favoured Nation (MFN) Treatment	Core WTO/GATT non-discrimination principle: a trade concession (e.g., lower customs duty) granted to one member must be extended to all WTO members. Governs GATT (goods), GATS (services) and TRIPS (IP); exceptions permit FTAs, preferential access for developing countries, and anti-unfair-trade barriers.
Dumping & Comparative Advantage	**Dumping**: exporting a good below its domestic-market price; importing countries counter with anti-dumping duty. **Comparative Advantage** (David Ricardo): the basis of free-trade theory — countries gain from trade even if one has an absolute advantage in every activity, by specialising where they are *relatively* most efficient.
Autarky, Free Trade & Trade Creation	**Autarky**: a policy of complete national self-sufficiency with no international trade — historically pursued at the cost of efficiency/prosperity. **Free Trade**: trade among countries without tariffs/quotas/forex controls, aimed at specialisation gains. **Trade Creation**: the rise in trade volume from removing/reducing trade barriers.
Parallel Importing	An arbitrage-based trade practice: an independent importer buys a supplier's genuine product cheaply in one country and resells it in another where the supplier's own distributors charge more — promotes competition but undercuts supplier price-discrimination strategies.

6. GLOSSARY: WTO ENFORCEMENT, EXPORT INCENTIVES & PRICE CONTROLS

Cue Words	Notes
Cross-Retaliation	Under WTO's Dispute Settlement Mechanism, if suspending trade concessions in the same sector wouldn't hurt an economically powerful non-compliant member, the complainant may instead suspend that member's intellectual property rights — a stronger deterrent, especially against developed countries.
Duty Credit Scrip	An export-promotion incentive: government issues exporters a transferable scrip worth 2-5% of export value, usable to offset import duty on raw materials or other manufacturing-related taxes.
Minimum Export Price (MEP) & Minimum Import Price (MIP)	**MEP**: The floor price below which exports of a good aren't permitted — used to curb domestic price rise/supply disruption (e.g., onion exports). **MIP**: The floor price below which imports aren't allowed — used to protect domestic producers from cheap imports.
Non-Tariff Barriers (NTBs)	Trade restrictions other than tariffs — import licensing, pre-shipment inspection, rules of origin, customs delays, and similar mechanisms that the WTO recognises as impeding trade.
Tariff Rate Quotas (TRQs)	Allow a fixed quantity of a product to be imported at a lower "in-quota" duty rate; imports beyond that quantity attract the normal (higher) duty.
Terms of Trade (ToT)	Ratio of a country's export price index to its import price index — measures how much import volume a unit of exports can command; e.g., exporting apples at ₹120/kg against importing oranges at ₹40/kg gives a ToT of 3.
Force Majeure	A contractual clause (Indian Contract Act 1872, Sections 32 & 56) excusing a party from liability for non-performance due to a "superior force" event (Act of God, war, epidemic/pandemic) beyond its control — common in commercial/trade contracts.

7. FUNDAMENTALS CHECK — BASIC TRADE CONCEPTS

Cue Words	Notes
Balance of Trade (BoT) — Basic Definition	The difference between the value of a country's merchandise (visible/goods) exports and imports over a period. A trade surplus = exports > imports; a trade deficit = imports > exports. Narrower than the Current Account, which also includes services, income, and transfers.
Export Promotion Zones — EPZ to SEZ	**Export Processing Zones (EPZs)**: India's first-generation model (Kandla EPZ, 1965 — Asia's first) — designated enclaves with duty-free import of inputs for 100% export-oriented production. Evolved into today's **SEZs** (SEZ Act 2005) with broader fiscal incentives and single-window clearance (see Infrastructure notes, Section 6).
Rupee Depreciation — Effect on Trade	**Depreciation** (Rupee weakens vs USD): Exports become **cheaper/more competitive** for foreign buyers (boosts exports); imports become **costlier** in Rupee terms (discourages imports, worsens import bill for oil/gold) — intended to narrow the trade deficit, though J-Curve effects mean the impact lags.
Rupee Appreciation — Effect on Trade	**Appreciation** (Rupee strengthens vs USD): Exports become **costlier/less competitive** abroad (hurts exporters); imports become **cheaper** (benefits import-dependent sectors, curbs imported inflation) — opposite effects of depreciation.

8. RoDTEP, ADVANCE AUTHORISATION & DEEMED EXPORTS

Cue Words	Notes
RoDTEP — Rationale & Mechanics	Replaces the Merchandise Exports from India Scheme (MEIS), which was found to violate WTO rules as it was export-focused. RoDTEP complies with WTO rules because it refunds indirect taxes on inputs consumed in the production process. A fully automated route for Input Tax Credit in GST to help increase exports — will reimburse all taxes and duties paid on inputs consumed in exports. Additional ₹10,000 crore revenue to be forgone. Scheme monitored by the Ministry of Finance. Background: GST was already exempted for exports, and import/customs duty on inputs used to manufacture the exported product was refunded through MEIS via Duty Credit Scrips. But certain items outside GST (VAT on fuel, mandi tax, duty/tax on electricity etc.) still carried embedded duty. Under RoDTEP these too are covered ⇒ exports become effectively zero-rated.
Advance Authorisation (AA)	Issued to allow duty-free import of inputs physically incorporated in export products — including fuel, oil and catalyst used in production of the export product. Under the purview of the Directorate General of Foreign Trade (DGFT), an attached office of the Ministry of Commerce & Industry.
Deemed Exports	Transactions in which the goods supplied do not leave the country, and payment for such supplies is received either in ₹ or in foreign exchange.
Deemed Exports Benefit (DEB) Schemes	Aim: create a level playing field for domestic industry vis-à-vis direct import, by providing duty-free inputs or exemption/refund of duty paid on goods manufactured in India — i.e. an instrument of import substitution. Helps create manufacturing capability, value addition and employment. Availed by units in: Power, Petroleum refining, Fertilizer, Nuclear power.
Merchanting Trade	Where the buyer is from one foreign country and the seller from another foreign country, with an Indian intermediary. Exempt from GST.

9. CUSTOMS, TARIFF STRUCTURE & GST TREATMENT OF TRADE

Cue Words	Notes
Taxes NOT Subsumed under GST (trade-relevant)	**Customs Duty** and **Anti-dumping Duty** remain outside GST (along with central excise on petroleum products, state VAT on alcohol, real estate, electricity, stamp duty, property tax etc.).
GST & Exports — Zero Rating	**No GST on exports** — hence exports are called **zero-rated**: taxes are first imposed and then the government **credits back all taxes**. **Exports, imports and interstate supplies ⇒ IGST is levied**.
Residual Cascading on Imports	**Customs Duty is still levied on imports**, so **some cascading effect persists** — customs duty is imposed first, then **IGST is imposed on top of it**.
Pre-GST Customs Duty	Before GST, Customs Duty was a central tax on imports and exports (mostly exempted for exports).
Inverted Duty Structure	Where the import duty on finished goods is low compared to the import duty on raw materials — industry wants the government to remove this anomaly.
Beggar-thy-Neighbour Policy	A policy through which a country attempts to remedy its economic problems by means that worsen the economic problems of other countries — e.g. invoking the Essential Commodities Act for onions, triggering Bangladesh's onion woes.

10. TRADE PREFERENCES, FTAs & ECONOMIC INTEGRATION (SOURCE LIST)

Cue Words	Notes
Generalized System of Preferences (GSP)	Originated at the **UNCTAD II Conference in New Delhi, 1968** — a **generalized, non-reciprocal, non-discriminatory** system of preferences in favour of developing countries. Under the aegis of **UNCTAD (NOT WTO)**. Certain products originating in developing countries are granted **reduced or zero tariff rates over the MFN rates**. **13 nations currently give GSP**. The **US discontinued India's duty-free status in 2019**.
Economic Integration — Ladder (source version)	**PTA (Preferential Trade Agreement)**: tariff reduction on some goods. **FTA**: a PTA with **tariff abolition on most goods**. **Customs Union**: FTA + **common external tariff** for non-members. **Common Market**: Customs Union + **free movement of labour & capital**. **Economic & Monetary Union**: Common Market where members **coordinate macro-economic & exchange rate policies**.
India's Bilateral FTAs — Legacy List (10 countries)	**Sri Lanka, Afghanistan, Bhutan, Nepal, Thailand, Singapore, Malaysia, South Korea, Japan, Chile** (Chile is the **only country outside Asia** on this list). *(Older list; superseded by the India-UK CETA (in force 2026) and the concluded India-EU FTA in the fact sheet above.)*
India's Regional FTAs (3)	**SAFTA, 2004**; **India-ASEAN Agreement, 2010**; **MERCOSUR** (Brazil, Argentina, Paraguay, Uruguay, Venezuela — Venezuela suspended since 2016). *(Note: the fact sheet/Section 4 dates SAFTA's entry into force as 1 Jan 2006 — 2004 is the signing year.)*
Trade-to-GDP Ratio	**(Exports + Imports of Goods and Services) / GDP** — measures a country's **openness to international trade**. Large countries tend to trade less than small countries, since small countries lack an internal market — **but India trades far more for its size**. **India (53%) > China (38%) > US (28%)**. *(Older figures; superseded by the post-1991 trade-openness series in the fact sheet showing India's trade/GDP easing to 37.9% by 2020.)*
India-EU FTA — 2025 Commitment to Conclude by Year-End	2025 Commerce Minister **Piyush Goyal** and EU Trade Commissioner **Maroš Šefčovič** reaffirmed commitment to **conclude the India-EU FTA by end of 2025**, building on the EU College of Commissioners' visit to New Delhi in **Feb 2025**. Monthly negotiating rounds were ongoing at the time, with the next round scheduled **12-16 May 2025** in New Delhi. *(FTA negotiations were eventually concluded 27 January 2026 — see below.)*
India-EFTA TEPA — Entry into Force (Origin Event)	2025 India-European Free Trade Association (EFTA — **Switzerland, Norway, Iceland, Liechtenstein**) **Trade and Economic Partnership Agreement (TEPA)** came into force on **1 October 2025** (signed **10 March 2024** at New Delhi). *(For the subsequent 2-year milestone update, see the India-EFTA TEPA entry in `upsc/gs2/international-relations/nordic-india.md`.)* India's **first FTA with a binding commitment linked to investment and job creation**: EFTA committed to increase FDI into India by **USD 100 billion over 15 years** (USD 50bn within the first 10 years, an additional USD 50bn in the next 5) and facilitate generation of **1 million direct jobs** in India — explicitly **excluding portfolio investment** (long-term capital only). EFTA's market access offer covers **92.2% of tariff lines** (**99.6% of India's exports**), including **100% of non-agri products**. India's offer covers **82.7% of tariff lines** (**95.3% of EFTA's exports**, of which **>80% is Gold**, with no change in effective Gold duty). **14 chapters** covering goods, rules of origin, trade facilitation, IPR (TRIPS-level), services, sustainable development. Includes **Mutual Recognition Agreements (MRAs)** in professional services (nursing, chartered accountancy, architecture). India's exports to EFTA in **2024: USD 72.37 million** (**Guar Gum >70%** of the basket). A dedicated **EFTA Desk** (single-window investment facilitation mechanism) has been operational since **February 2025**.
India-New Zealand FTA — First Round of Negotiations Concluded (2025)	2025 First round of India-NZ FTA negotiations held **5-9 May 2025** in New Delhi, concluding **9 May 2025**. FTA talks were launched at a meeting between **Piyush Goyal** and NZ Trade Minister **Todd McClay** on **16 March 2025**, following PM Modi's meeting with NZ PM **Christopher Luxon** in March 2025. Next round was scheduled for **July 2025**, with both sides aiming to conclude the FTA within 2025. *(The FTA was eventually signed 27 April 2026 — see below.)*
India-New Zealand FTA — Negotiations Concluded (22 Dec 2025)	2025 India-NZ FTA negotiations **concluded on 22 December 2025** — India's **3rd FTA concluded in 2025** (after UK and Oman) — via **5 formal negotiation rounds**, one of India's **fastest-concluded FTAs with a developed country** (launched 16 March 2025, concluded in ~9 months). This is the **origin conclusion event**; the FTA was formally **signed 27 April 2026** — see below.
India-New Zealand FTA (Signed 27 Apr 2026)	2026 - Signed **27 April 2026 at Bharat Mandapam** (Commerce Minister Piyush Goyal + NZ Trade Minister Todd McClay) — concluded in **9 months** (negotiations launched 16 Mar 2025, concluded 22 Dec 2025). India's **9th FTA with a developed country** (7th in 3.5 years), covering **38 advanced economies (~65-70% of global GDP)**. 2026 **100% duty-free access** for India's exports to NZ on entry into force; India offers tariff liberalization on **70.03% of tariff lines** (covering **95% of bilateral trade value**), excluding sensitive sectors (dairy, onions, sugar, edible oils). NZ offers market access in **118 service sectors** + MFN commitment in **139 sub-sectors**. 2026 **USD 20 billion investment commitment** from New Zealand into India. New **Temporary Employment Entry (TEE) visa**: 5,000-strong quota, up to 3-year stay, covering AYUSH practitioners, yoga instructors, IT/engineering professionals. 2026 Student mobility: no numerical caps, post-study work rights up to **3 years** (STEM Bachelor's/Master's) or **4 years** (Doctoral); **1,000 Working Holiday Visas/year** for young Indians. 2026 First-ever dedicated **Health & Traditional Medicine Services chapter** in any NZ FTA (covers AYUSH + Maori health practices). NZ committed to amend its **Geographical Indications law within 18 months** to enable registration of Indian wines/spirits/other-goods GIs. 2026 Bilateral merchandise trade in **FY2024-25 was $1.3 billion (+49% YoY)**.
India-UK CETA Signed (24 Jul 2025)	2025 India-UK CETA **signed on 24 July 2025** in London, in the presence of PM **Narendra Modi** and UK PM **Keir Starmer** — signed by Commerce Minister **Piyush Goyal** and UK Business Secretary **Jonathan Reynolds**; negotiations had concluded **6 May 2025**. This is the **signing/origin event** — CETA + the DCC only **entered into force on 15 July 2026** (see next row). 2025 At signing, bilateral trade stood at **~USD 56 billion**, with a joint goal to **double it by 2030**. Terms agreed: **zero-duty access on 99% of tariff lines** (covering nearly 100% of trade value) — benefiting labour-intensive sectors (**textiles, leather, footwear, gems & jewellery, marine products, toys**) plus **engineering goods, auto components, organic chemicals**. 2025 Services commitments — **a first by the UK in any FTA** — cover **IT/ITeS, financial/professional services, business consulting, education, telecom, architecture, engineering**. Enhanced mobility for Indian professionals: **Contractual Service Suppliers, Business Visitors, Intra-Corporate Transferees, Independent Professionals** (e.g. yoga instructors, chefs, musicians). 2025 **Double Contribution Convention (DCC)** agreed alongside CETA: exempts Indian workers and employers from UK social security contributions for **up to 3 years** (this exemption period was later extended to 5 years by the time of entry into force — see next row).
India-UK CETA & DCC (In Force 15 Jul 2026)	2026 CETA + the **Double Contribution Convention (DCC)**, social security enter into force **15 July 2026**. Signed **24 July 2025** in London (Piyush Goyal + UK's Jonathan Reynolds), concluded after **14 negotiation rounds** (concluded 6 May 2025); DCC signed **10 February 2026**. Builds on the 2021 Enhanced Trade Partnership/Roadmap 2030 target of **$100 billion** bilateral trade by 2030. 2026 CETA has **30 chapters**; **~99% zero-duty access** on India's exports to UK (covering nearly 100% of trade value) — eliminating UK tariffs of up to 70% (processed food), 21.5% (marine products), 18% (engineering/auto components), 16% (leather/footwear), 12% (textiles/clothing), 8% (chemicals/pharma). India protects dairy, cereals, millets, edible oils, oilseeds, apples. 2026 UK offers services market access across **137 sub-sectors**. DCC exemption period extended from 3 to 5 years — benefits **75,000+** Indian professionals and **900+** companies. First-ever dedicated annual mobility quota in any FTA: **1,800** Indian chefs, yoga instructors, and classical musicians. 2026 Steel exporters protected from UK's steel safeguard measures effective 1 July 2026 — **85%** of India's steel exports exempted via CSQ/residual quota/Authorised Use Scheme mechanisms.
India-Oman CEPA — Signed (18 Dec 2025)	2025 India-Oman CEPA **signed on 18 December 2025**, in the presence of PM **Narendra Modi** and Sultan **Haitham bin Tarik**, by Commerce Minister **Piyush Goyal** and Oman's Commerce Minister **Qais bin Mohammed Al Yousef** — India's **2nd FTA signed in 6 months** (after UK's CETA). This is the **origin signing event**; CEPA **entered into force 1 June 2026** — see below. 2025 Oman offered zero-duty access on **98.08%** of tariff lines (**99.38%** of India's exports by value), with **97.96%** getting **immediate** tariff elimination — spanning gems & jewellery, textiles, leather, footwear, engineering products, pharmaceuticals, automobiles. Services: Oman offered **127 sub-sectors** — a first-of-its-kind offer by Oman. 2025 Mobility: Intra-Corporate Transferee quota raised from **20% to 50%**; Contractual Service Supplier stay extended from **90 days to 2 years** (extendable by 2 more). **100% FDI** committed for Indian companies in major Omani services sectors. First-ever commitment by any country on **Traditional Medicine** (across all modes) — opens AYUSH/wellness opportunities. 2025 Context at signing: ~**7 lakh** Indian nationals reside in Oman, **6,000+** Indian establishments, ~**$2bn** annual remittances, bilateral trade **>$10bn**. This is the **first bilateral agreement Oman has signed with any country since the USA in 2006**.
India-Oman CEPA (In Force 1 Jun 2026)	2026 India-Oman CEPA entered into force **1 June 2026** (signed 18 December 2025 in Muscat). India becomes only the **second nation** (after the United States) to secure a comprehensive bilateral trade pact with Oman. 2026 India's exports gain **99.38%** duty-free access by value (up from 15.33% under MFN); India liberalizes **77.79%** of tariff lines (covering 94.81% of imports from Oman by value), protecting dairy, cereals, fruits, edible oils, rubber, leather, spices via an exclusion list + Tariff Rate Quotas. 2026 Oman's services offer covers **127 sub-sectors** (best-ever GCC services offer to India); ICT ceiling raised from 20% to 50%. Pharma products approved by USFDA/EMA/UK MHRA/TGA get marketing authorization in Oman within **90 days** without prior inspection. 2026 Bilateral trade reached **$11.18 billion** in FY2025-26 (up from $10.61 billion in FY2024-25). Oman's logistics hubs at Sohar, Duqm, Salalah serve as a gateway to the wider GCC and East African markets.
Terms of Trade (ToT) — Detail	**Relative price of exports in terms of imports** — the ratio of **export price index to import price index**, i.e. the amount of import goods an economy can purchase per unit of export goods. **Adverse movement in ToT** badly affects exporters, but **decreases the quantity of imports ⇒ improves the trade balance in the BoP**. A **rise in export goods' prices raises ToT**; a **rise in import goods' prices lowers ToT**.

12. ECONOMIC SURVEY 2025-26 — TRADE PERFORMANCE & CGSE

2026

Cue Words	Notes
Merchandise & Services Export Trends (Economic Survey 2025-26)	India's **share of global merchandise exports** nearly doubled — from **1%** to **1.8%** between **2005 and 2024**. **Services exports** touched an **all-time high of USD 387.6 billion in FY25**, growing **13.6%**.
Credit Guarantee Scheme for Exporters (CGSE)	**CGSE made operational via the Jan Samarth Portal from 1 December 2025**. Within the first month: applications worth **over ₹8,500 crore** received and sanctions of **over ₹3,100 crore** made. Benefits both **MSME and non-MSME exporters** via liquidity support; the **Government provides a 100% guarantee** for the additional loan facility under the scheme. Context: **exports account for ~21% of GDP**; **MSMEs contribute ~45%** of total exports.
Export Preparedness Index (EPI) 2024 — 4th Edition	2026 NITI Aayog released the **4th edition of the Export Preparedness Index (EPI)**, assessing export readiness across India's States/UTs, aligned with India's **USD 1 trillion merchandise export target by 2030** (first edition published **August 2020**).
FY2025-26 Full-Year Trade Data (April-March)	2026 - **Total exports** (merchandise+services): **$860.09 billion** (+4.22% YoY, from $825.26 billion in FY2024-25); **total imports**: **$979.40 billion** (+6.47% YoY); **overall trade deficit** widened to **$119.30 billion** (from $94.66 billion). 2026 **Merchandise exports**: **$441.78 billion** (+0.93%); **merchandise trade deficit** widened to **$333.19 billion** (from $283.50 billion). 2026 **Services exports**: **$418.31 billion** (+7.94% YoY); **services trade surplus**: **$213.89 billion** (up from $188.84 billion).

11. TRADE FACILITATION BODIES, CLASSIFICATION & STANDARDS

Cue Words	Notes
EXIM Bank of India	Established 1 January 1982; 100% government owned — Export-Import Bank of India Act, 1981. Mandate: promoting, financing and facilitating foreign trade; extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other overseas entities. Facilitates two-way technology transfer — financing import of technology into India, and investment abroad by Indian companies setting up joint ventures or undertaking overseas operations. India recently extended a $75 million LOC via EXIM Bank for solar parks in Cuba.
Harmonized System (HS) Code	HS Code is a **6-digit identification code** issued by the **World Customs Organization**. **MoCommerce & Industry allocates HS codes** in India — India uses an **8-digit code** (2 extra digits for more detailed classification). A **separate HS code for Khadi** was created, which will boost Khadi exports.
APEDA — Statute & Scope	Established under the Agricultural and Processed Food Products Export Development Authority Act, 1985, under MoCommerce & Industry. Responsible for export promotion and development of fruits, vegetables, meat, dairy, alcoholic & non-alcoholic beverages, biscuits etc.
Rice Export Promotion Forum (REPF)	Recently set up by the government to **increase rice exports** by recommending measures to improve the supply chain etc. **India is the 2nd largest rice producer and the largest rice exporter**.
Codex Alimentarius Commission (CAC)	**International food standards body**, run jointly by **WHO & FAO**, to protect consumer health and **ensure fair practices in free trade**. **India became a member in 1964**.
Eco-Mark (trade labelling)	Voluntary labelling service by BIS (MoConsumerAffairs) for quickly identifying environment-friendly products — products conforming to a set of standards aimed at the least impact on the ecosystem, since 1991.
National Medical Devices Promotion Council (NMDPC)	Set up under DPIIT in MoCommerce & Industry, headed by the Secretary of DPIIT — will support domestic manufacturing, reduce import dependence to meet local demand, and boost exports.

📰 Export Promotion Mission (EPM) 2025

Cue Words	Notes
Cabinet Approval — Scale & Purpose	Approved on **12 November 2025** — outlay of **₹25,060 crore** for **FY2025-26 to FY2030-31**. A **flagship scheme announced in Budget 2025-26**, replacing multiple fragmented export-support schemes with a **single unified mechanism**. Targets **MSMEs, first-time exporters, labour-intensive sectors** (textiles, leather, gems & jewellery, engineering goods, marine products — sectors hit by recent **global tariff escalations**).
Two Sub-Schemes	**NIRYAT PROTSAHAN**: trade finance access — interest subvention, export factoring, collateral guarantees, e-commerce exporter credit cards. **NIRYAT DISHA**: non-financial enablers — quality/compliance support, branding, trade fair participation, export warehousing/logistics, trade intelligence. Consolidates the **Interest Equalisation Scheme (IES)** and **Market Access Initiative (MAI)**. **Implementing agency: DGFT**, via a dedicated digital platform.

📰 India-UAE CEPA Negotiations Formally Launched 2021

Cue Words	Notes
Launch — Origin Event (22 Sept 2021)	India-UAE CEPA negotiations were **formally launched on 22 September 2021 in New Delhi** by Commerce Minister **Piyush Goyal** and UAE Minister of State for Foreign Trade **Dr. Thani bin Ahmed Al Zeyoudi** — this is the **negotiations-launch event**, preceding the **signing on 18 February 2022** and **entry into force on 1 May 2022** (both covered in the entry below). The **first round of negotiations** was held **23-24 September 2021**. Target set at launch: **conclude negotiations by December 2021**, **sign the formal agreement by March 2022** — a timeline that was **later realized** (signed 18 Feb 2022, in force 1 May 2022). Built on the **Comprehensive Strategic Partnership signed in 2017**.
Bilateral Trade Context (at time of launch)	UAE was India's **3rd-largest trading partner**, with bilateral trade of **$59 billion in 2019-20**. UAE was India's **2nd-largest export destination** after the US (**~$29 billion in exports, 2019-20**). UAE was India's **8th-largest investor** (**$11 billion invested, April 2000-March 2021**), while Indian investment in UAE was estimated at **over $85 billion**.
Trade Composition	India's **major exports to UAE**: petroleum products, precious metals/stones/gems/jewellery, minerals, food items (cereals, sugar, fruits/vegetables, tea, meat, seafood), textiles, engineering/machinery products, chemicals. India's **major imports from UAE**: petroleum products, precious metals/gems/jewellery, minerals, chemicals, wood products — India imported **$10.9 billion of crude oil from UAE in 2019-20**.
Other Cooperation Areas	Both sides discussed cooperation on **trade remedy measures** (per a **January 2017 MoU**) and coordination ahead of the **WTO's 12th Ministerial Conference (MC12)** in Geneva.

📰 India-UAE CEPA Enters Into Force 2022

Cue Words	Notes
CEPA Signed — Origin Event (18 Feb 2022)	2022 India-UAE CEPA was **signed on 18 February 2022** at a **Virtual Summit** between PM **Narendra Modi** and UAE Crown Prince **Sheikh Mohamed bin Zayed Al Nahyan** — this is the **signing/origin event**, distinct from entry into force on 1 May 2022 (below). UAE's **first-ever bilateral trade accord**, and India's **first bilateral trade agreement in the MENA region**. Negotiations were concluded in **record time — less than 3 months**. PM Modi stated bilateral trade would grow **from $60 billion to $100 billion within 5 years**. At the time, **UAE was India's 3rd largest trading partner**; India was **UAE's #1 trading partner for non-oil exports** (~**14%** of UAE's global non-oil exports). Part of the **"Comprehensive Strategic Partnership"** established in **2017**; tied to UAE's **"Projects of the 50"** vision.
Timeline & Significance	2022 India-UAE **Comprehensive Economic Partnership Agreement (CEPA)**, signed **18 February 2022**, entered into force on **1 May 2022** — India's **first trade agreement operationalized in 2022** (the India-Australia ECTA followed as the second, entering into force 29 December 2022). 2022 The Commerce Secretary flagged off the **first consignment (Gems & Jewellery)** from India to UAE under CEPA, attracting **zero customs duty**.
Goods & Services Access	2022 India gets preferential market access from UAE on **97%+ of tariff lines** (covering **99% of Indian exports to UAE by value**) — key sectors: gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agri/wood products, engineering products, pharmaceuticals, medical devices, automobiles. 2022 **Services**: Indian service providers get enhanced access to **~111 sub-sectors** across **11 broad service sectors**.
Trade Targets & Context	2022 CEPA is projected to raise bilateral trade in **goods to $100+ billion** and **services to $15+ billion** within 5 years. 2022 Context: India's total exports (goods+services) reached **$670 billion in FY2021-22**, ~**22-23% of GDP**.

📰 India-Australia ECTA Signed — Virtual Ceremony 2022

Cue Words	Notes
Signing & Significance (Origin Event)	The **India-Australia Economic Cooperation and Trade Agreement (ECTA)** was **signed on 2 April 2022** in a **virtual ceremony**, with Prime Minister **Narendra Modi** and Australian Prime Minister **Scott Morrison** witnessing, and Commerce Minister **Piyush Goyal** and Australian Trade Minister **Dan Tehan** signing on behalf of their governments. *(This is the earlier origin/signing milestone — distinct from the agreement's entry into force on 29 December 2022, covered in the next entry below.)* India's **first trade agreement with a developed country in over a decade**. Negotiations were **formally re-launched on 30 September 2021** and **concluded on a fast-track basis by end-March 2022**.
Scope of the Agreement	Covers **Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade, Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures, and Pharmaceutical products** — plus **8 subject-specific side letters**.
Bilateral Trade Context	Australia is India's **17th largest trading partner**; India is Australia's **9th largest**. Total bilateral trade (goods + services) stood at **USD 27.5 billion in 2021**. India's **merchandise exports to Australia grew 135% between 2019-2021**, reaching **USD 6.9 billion in 2021**; India's **merchandise imports from Australia were USD 15.1 billion in 2021**, mainly raw materials and minerals. Both countries are part of the **trilateral Supply Chain Resilience Initiative** (with **Japan**) and the **Quad** (with the **US and Japan**).

📰 India-Australia ECTA Enters Into Force 2022

Cue Words	Notes
Timeline & Significance	India-Australia **Economic Cooperation and Trade Agreement (Ind-Aus ECTA / AI-ECTA)** entered into force on **29 December 2022** — signed **2 April 2022**, ratified **21 November 2022**. India's **second trade agreement operationalized in 2022**, after the **India-UAE CEPA (1 May 2022)**.
Goods Access	India gets preferential access on **100% of Australia's tariff lines**, covering gems & jewellery, textiles, leather, footwear, furniture, food, agri products, engineering products, medical devices, automobiles. India offers Australia preferential access on **70%+ of its tariff lines**, mainly raw materials/intermediaries — **coal, mineral ores, wines**.
Services & Pharma	**Services**: Australia offered commitments in **~135 sub-sectors** + **MFN status in 120**; India offered access in **~103 sub-sectors** + **MFN in 31**. A separate **Annex on Pharmaceutical products** enables fast-track approval of patented, generic, and biosimilar medicines.
Jobs, Mobility & Taxation	Estimated **10 lakh additional jobs** in India under ECTA. **Annual visa quota** for Indian yoga teachers and chefs; **1+ lakh Indian students** to benefit from a post-study work visa (**18 months–4 years**). Eliminates **double taxation on IT services** (effective 1 April), with projected savings in the billions of dollars over 5-7 years.

📰 India-EU FTA Negotiations Re-launched After 9-Year Lull 2022

Cue Words	Notes
Re-launch & Parallel Tracks (Origin Event)	Commerce Minister **Piyush Goyal** and EU Executive Vice-President **Valdis Dombrovskis** formally **re-launched India-EU FTA negotiations on 18 June 2022 in Brussels** — talks had been **stalled since 2013**. *(This is the origin re-launch event; see the India-EU FTA 2025 commitment-to-conclude entry and the 2026 conclusion fact sheet above for subsequent progress.)* Simultaneously launched negotiations for a standalone **Investment Protection Agreement (IPA)** and a **Geographical Indications (GI) Agreement** — all three tracks to be negotiated in parallel and concluded simultaneously. **First round of negotiations** for all three agreements held **27 June–1 July 2022, New Delhi**. Followed the **May 2021 India-EU Leaders' Meeting (Porto)** agreement to resume talks, accelerated by EU Commission President **Ursula von der Leyen's April 2022 Delhi visit** and PM Modi's Europe visit.
Trade Context	EU is India's **2nd largest trading partner** (after the US). India-EU merchandise trade hit an **all-time high of USD 116.36 billion in FY2021-22** (**+43.5% YoY**). India's exports to the EU jumped **57% to USD 65 billion in FY2021-22**; India runs a **trade surplus** with the EU. Noted in the same release: India had already concluded FTAs with **Australia and UAE "in record time"** earlier in 2022, with **Canada and UK** talks also underway at the time.

📰 India-UAE Bilateral Investment Treaty (BIT) Enters Into Force 2024

Cue Words	Notes
Entry Into Force & Predecessor Agreement	India-UAE **Bilateral Investment Treaty (BIT)** entered into force on **31 August 2024** — signed **13 February 2024** in Abu Dhabi. Replaces the earlier **India-UAE BIPPA (Bilateral Investment Promotion and Protection Agreement)**, signed December 2013, which expired **12 September 2024**.
Investment Scale	UAE is India's **7th largest FDI source** (~3% share), with cumulative FDI of **~USD 19 billion** (April 2000-June 2024). India's **Overseas Direct Investment (ODI)** into UAE stands at **~USD 15.26 billion** (~5% of India's total ODI), April 2000-August 2024.
Key BIT Features	**Closed, asset-based investment definition** with portfolio investment coverage. **Investor-State Dispute Settlement (ISDS)** via arbitration, with mandatory **3-year exhaustion of local remedies** before a claim can be brought. Protections against **expropriation**; carve-outs for **taxation, government procurement, and subsidies**. No investor claims permitted where **corruption, fraud, or round-tripping** is involved.

📰 Cabinet Approves Additional Outlay for Interest Equalisation Scheme 2023

Cue Words	Notes
Additional Outlay & Extension	Cabinet approved an **additional ₹2,500 crore** for the **Interest Equalisation Scheme (IES) on Pre and Post Shipment Rupee Export Credit** (8 December 2023), **extending the scheme till 30 June 2024**. This additional amount is **over and above the existing ₹9,538 crore outlay** under the scheme.
Subsidy Rates & Coverage	**2% interest equalisation** for manufacturer/merchant exporters of **410 identified tariff lines**. **3% interest equalisation** for **all MSME manufacturer exporters**, across any tariff line.
Implementation & Aim	Implemented by the **RBI** through public and private sector banks; **jointly monitored by DGFT and RBI**. Aim: help India's **export-oriented MSME and labour-intensive manufacturing sectors** access competitive-rate working capital, supporting **employment generation**. *(Note: IES was later consolidated into the **NIRYAT PROTSAHAN** sub-scheme of the Export Promotion Mission — see entries above.)*

📰 India-UAE CEPA — Bilateral Trade Crosses USD 100 Billion 2025

Cue Words	Notes
Third CEPA Joint Committee Meeting	Held **27 November 2025, New Delhi** — bilateral trade crossed **USD 100.06 billion in FY2024-25**, up **19.6% YoY**. Reaffirms UAE as **one of India's key trading partners**. Both sides reaffirmed commitment to a **USD 100 billion non-oil/non-precious-metal trade target by 2030**.
Discussion Topics	**Gold Tariff Rate Quota (TRQ)** allocation via **transparent competitive bidding**. **Rules of Origin**, **BIS licensing**, **anti-dumping matters**. **Pharmaceutical regulatory cooperation**.