Economic Diplomacy | Civils Marg

📌 Background & Key Features

Definition: Use of diplomatic tools and relationships to advance a country's trade, investment and economic interests abroad.
India's toolkit: Bilateral/regional FTAs (e.g., India-UAE CEPA 2022, India-Australia ECTA 2022, ongoing India-EU FTA talks), Production-Linked Incentive (PLI)-backed export promotion, and export of Digital Public Infrastructure (UPI, Aadhaar-stack) as a diplomatic offering to partner countries.
Multilateral engagement: Active role in WTO reform debates, G20 (Presidency 2023), and championing Global South concerns on debt restructuring and climate finance.

Focus areas	FDI, FTAs, PLI-driven exports, digital public infrastructure exports
Key platforms	G20, WTO, RCEP (opted out), bilateral FTAs

India concluded a Free Trade Agreement with the UK (signed 2025) and continues negotiating a comprehensive FTA with the European Union, both flagged as major 2025-26 economic-diplomacy milestones.
US tariff tensions: Reciprocal tariff measures announced by the US administration in 2025 on Indian exports have pushed India to diversify trade partnerships and accelerate FTA talks with the EU, UK and Gulf states.
UPI's international expansion (UAE, Singapore, France, Sri Lanka, Mauritius) is increasingly cited as a case study of "digital economic diplomacy."

Focus areas: FDI, FTAs, PLI-driven exports, digital public infrastructure exports
Key platforms: G20, WTO, RCEP (opted out), bilateral FTAs

Year	Question	Marks
2015	In what ways would the ongoing US-Iran nuclear pact, if signed, help India, if at all, in her pursuit of a nuclear plan for the future?	15
2023	How is India dealing with growing radicalization spreading over parts of its territory? [linked to economic-diplomacy counter-narrative in West Asia policy]	15