International Relations
Effect of Policies of Other Countries on India
GS Paper II
Effect of Policies of Other Countries — Quick Revision
One-page UPSC revision of foreign policies affecting India — trade measures, sanctions, monetary spillovers, visa and labour rules, and India's responses.
SyllabusGS II · Effect of policies and politics of developed and developing countries on India's interests; Indian diaspora
The policies to name in Prelims, and the channels to structure Mains answers around.
The Six Channels
| Channel | Developed-country example | Developing-country example |
|---|---|---|
| Trade | US tariffs; EU CBAM | Chinese dumping |
| Money | US Fed rate rises; taper tantrum 2013 | Debt crises in neighbours (Sri Lanka 2022) |
| People | H-1B rules; student-visa caps | Gulf localisation (Nitaqat) and kafala |
| Sanctions | US sanctions on Iran and Russia; CAATSA | — (India recognises only UNSC sanctions as binding) |
| Security | Technology export controls | Terrorism from Pakistan; CPEC; coups and instability |
| Resources | Critical-mineral partnerships | OPEC+ output cuts; China’s rare-earth controls |
Policies and Dates
| Policy | Country | Date |
|---|---|---|
| Section 232 steel and aluminium tariffs | US | March 2018 |
| Exit from JCPOA | US | May 2018 |
| Chabahar exemption from Iran sanctions | US | November 2018 |
| End of India’s GSP benefits | US | June 2019 |
| CAATSA | US | August 2017 |
| Inflation Reduction Act; CHIPS and Science Act | US | August 2022 |
| G7 price cap on Russian crude | G7 | December 2022 |
| CBAM transitional phase | EU | October 2023 |
| CBAM definitive phase | EU | January 2026 |
| Rare-earth export restrictions | China | April 2025 |
India’s Toolkit
| Tool | Example |
|---|---|
| Trade agreements | UAE CEPA (2022), Australia ECTA (2022), EFTA TEPA (2024), UK CETA (2025) |
| Payment workarounds | Special Rupee Vostro Accounts (RBI, July 2022) |
| Energy buffers | Strategic petroleum reserves at Visakhapatnam, Mangaluru, Padur |
| Minerals | National Critical Mineral Mission (2025); KABIL; Minerals Security Partnership (2023) |
| Industrial policy | Production Linked Incentive schemes |
| Diplomacy | Exemptions (Chabahar); WTO and G20 advocacy |
High-yield facts
- CBAM sectors: cement, hydrogen, electricity, aluminium, fertilisers, iron and steel.
- Fragile Five (2013): Brazil, India, Indonesia, South Africa, Turkey.
- India was the first country to receive more than US$100 billion in remittances in a year (2022, IOM World Migration Report 2024).
Traps
Do not confuse
- CBAM (EU carbon border levy) vs EUDR (EU deforestation rules).
- CAATSA is a US law; it is not a UN sanction.
- GSP is a voluntary, non-reciprocal preference scheme; ending it is not a WTO violation.
Related Topics
- How the Policies of Other Countries Affect India
- Effect of Policies — practice questions
- The Indian Diaspora
- External Sector and Trade
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