3 INTERNATIONAL RELATIONS

3.1 India-Nepal

Data/Facts ❖ India is the largest trading partner of Nepal. India remains Nepal’s largest trade partner,
with bilateral trade crossing US$ 7 billion in FY 2019-20. In FY 2021-22, it constituted
2.34% of India’s exports.
❖ The bilateral remittance flow is estimated at approximately $ 3 billion (Nepal to India)
and $ 1 billion (India to Nepal). (MEA, March 2022)
❖ Indian firms are among the largest investors in Nepal, accounting for more than 30%
of the total approved FDI.
❖ Kalapani area is the largest territorial dispute between Nepal and India consisting of at
least 37,000 hectares of land in the High Himalayas.

3.2 India-Bhutan

Data/Facts ❖ India shares a border of about 699 km with Bhutan.

❖ India is Bhutan’s largest trading partner. Since 2014, trade between India and Bhutan
has more than doubled from USD 484 million in 2014-15 to USD 1083 million in 2020-
21.
❖ Imports from India accounted for more than 77.1% of Bhutan’s total imports. Bhutan’s
exports to India constituted 90.2 % of its total exports.
❖ India-Bhutan Friendship Treaty of 2007 enjoins both sides to “cooperate closely with
each other on issues relating to their national interests”.

3.3 India-Sri lanka

Data/Facts ❖ India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka
remains among the largest trade partners of India in the SAARC.
❖ The bilateral trade witnessed a standstill due to economic turmoil in Sri Lanka in 2022. In
2021-22, export of goods from India was worth USD 5.8 billion, while it was USD 550
million in April 2022. Similarly, import stood at USD 1 billion in 2021 while it was
USD 74.68 million in April 2022.
❖ In the investment field, India is among the top five foreign investors in Sri Lanka.
❖ India extended a USD1-billion short-term concessional loan to Sri Lanka to help the
island nation cope with one of the worst economic crises in decades.
❖ Bone of Contention: Fishing issue near Kachchatheevu island

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 3.4 India-Bangladesh

Data/Facts ❖ India shares a border of 4096.7 km with Bangladesh.

❖ Bangladesh is India’s biggest trading partner in the subcontinent and India is the
second biggest export partner accounting for 12% of the total exports to Bangladesh.
The total trade turnover in 2021-2022 touched US$18.2 billion.
❖ Cumulative Foreign Direct Investment from India to Bangladesh has more than
doubled from USD 243.91 million in 2014 to USD 570.11 million in December 2018.
❖ India currently exports 660 MW of electricity, on a daily basis, to Bangladesh.
❖ India – Bangladesh Protocol on Inland Water Transit and Trade (PIWTT) boosts
trade and people to people connect.
❖ Both countries are committed to early implementation of Bangladesh, Bhutan, Nepal
and India (BBIN), Motor Vehicles Agreement (MVA), 2015.
❖ Bone of Contention: Teesta River treaty, illegal immigration, Islamic Radicalisation,
Porous Indo-Myanmar Border, etc.

3.5 India-Pakistan

Data/Facts ❖ India shares a border of 3323 km with Pakistan.

❖ The bilateral trade between India and Pakistan has increased to USD 1.35 billion during
April-December 2022 as against USD 516.36 million in the whole 2021-22.
❖ India Exports to Pakistan was US$629.46 Million during 2022, according to the United
Nations COMTRADE database on international trade.
❖ River Dispute Solution Mechanism: Indus Waters Treaty of 1960 allocated three western
rivers (the Indus, Chenab and Jhelum) to Pakistan, and the three eastern rivers (Ravi, Beas
and Sutlej) to India. Also, establishment of Permanent Indus Commission.
❖ Bone of Contention: Fanning terrorism, Indus River dispute, Political Instability, Islamic
Radicalisation, China Angle, etc.

3.6 India-Maldives

Data/Facts ❖ India‐Maldives bilateral trade crossed the $ 300 million mark for the first time in
2021, reaching an impressive $ 323.29 million.
❖ In 2018, India was the 5th largest source of tourist arrivals in Maldives. Out of the total
of 14,84,274 tourists, 6.1 % (over 90,474) were from India.
❖ Indians are the 2nd largest expatriate community in the Maldives with an approximate
strength of around 22,000.
❖ India is building the Police Academy of Maldives in Addu, under an Indian grant of US$
33 million. The project is expected to be completed by February 2021.
❖ India is Maldives’ 4th largest trade partner after UAE, China and Singapore.
❖ Recently, India and Maldives have signed a pact for the construction of a $500 million
Greater Male Connectivity Project.
❖ Bone of Contention: Political Instability, Radicalisation, China Angle, etc.

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 3.7 India-Myanmar

Data/Facts ❖ India shares a nearly 1600 km long terrestrial border with Myanmar and an extended
maritime border also.
❖ India is Myanmar's 4th largest trading partner after Thailand, China, and Singapore.
India is the 2nd largest export market for Burmese exports after Thailand.
❖ India is additionally the 10th largest investor in Myanmar.
❖ The current bilateral trade between India and Myanmar is 1.76 billion USD (June 2023).
❖ As part of India’s SAGAR Vision, India developed the Sittwe port in Myanmar’s Rakhine
state; it is considered as India’s answer to the Chinese-fronted Kyaukpyu port.
❖ India-Myanmar-Thailand trilateral highway (IMTTH) boosts trade and commerce,
people to people connect.
❖ Bone of Contention: Political instability, China’s Influence on Northeast Insurgency,
Rohingya Issue, Porous Indo-Myanmar Border, etc.

3.8 India-Afghanistan

Data/Facts ❖ India shares a border of 106 km with Afghanistan.

❖ The total bilateral trade between India and Afghanistan crossed the US $ 1.5 billion mark
in 2019-20.
❖ India Exports to Afghanistan was US$481.6 Million during 2022, according to the
United Nations COMTRADE database on international trade.
❖ During FY 2019-20, 37 projects were completed in various provinces of Afghanistan
under the High Impact Community Development Project (HICDP) scheme of the
Government of India.
❖ Salma Dam, officially the Afghan-India Friendship Dam, is a hydroelectric and
irrigation dam project located on the Hari River in Chishti Sharif District of Herat
Province in western Afghanistan.
❖ Bone of Contention: Political instability, Terrorism, Islamic Radicalisation, Taliban,
Atrocities to minorities including Sikhs, Hindus, etc.

3.9 India-China

Data/Facts ❖ India shares a border of 3488 km with China.

❖ Bilateral trade between India and China reached US$ 115.83 billion in 2021 against US$
86.39 billion in 2020 with a growth of 34%.
❖ In the year 2020, India became the 16th largest trade partner of China.
❖ In 2019, the trade volume between China and India was $92.68 billion.
❖ FDI from China in India has dipped to $163.78 million in 2019-20 from $229 million
in 2018-19.
❖ According to data from 2019, a staggering 70% of electronic components, 45% of
consumer durables, 70% of Active Pharmaceutical Ingredients (APIs), and
❖ India and China account for over 1/3rd (or 2.8 billion people) of the world’s
population and about 20% of the global GDP.
❖ Bone of Contention: Border disputes including Pangong Tso, Aksai Chin, Tawang,
CPEC, Domination of Indian Ocean, Infrastructure development including dam, bridge
near border, Brahmaputra River dispute, bonhomie with Pakistan, etc.

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 3.10 India-USA

Data/Facts ❖ According to a survey conducted by CII (June 2020) Indian companies employ nearly
125,000 people in the US, with tangible investments exceeding US$ 22 billion across
diverse sectors.
❖ As per the annual report of the Student and Exchange Visitor Program (SEVP), there were
2,07,460 Indian students in the U.S. in 2020, thus accounting for almost 17% of total
international students coming to the US.
❖ About 4.2 million Indian Americans/Indian origin people reside in the US. The Indian
Americans (3.18 million) constitute the third largest Asian ethnic group in the US.
❖ India and the U.S. have agreed to re-establish the U.S.- India Homeland Security
Dialogue, the U.S. Department of Homeland Security (DHS) announced in March 2021
❖ The US has surpassed China, becoming India's top trading partner in 2021-22. America
is one of the few countries with which India has a trade surplus of USD 32.8 billion.
❖ India has joined a US-led initiative to set up an Indo-Pacific Economic Framework (IPEF)
❖ Bone of Contention: Strong Indo-Russia Relations, H1B Visa, Tariff Imposition,
Misunderstanding Self-Reliance as Protectionism, Exemption from US’ Generalised
System of Preferences, US’ hostility towards third countries like Iran and Russia, US’
policy in Afghanistan, etc.

3.11 India-Russia

Data/Facts ❖ The volume of India-Russia bilateral trade between April 2022 and February 2023 had
reached $45 billion (MEA, S. Jaishankar).
❖ Russia’s share in India’s crude oil import rose from just 0.2% to 28% in January 2023.
❖ The two countries intend to increase bilateral investment to US$50 billion and bilateral
trade to US$30 billion by 2025.
❖ Involvement of India and Russia in the Ropar nuclear plant project in Bangladesh.
❖ Russian investment in India in 2017 has reached 18bn USD and India’s total investment
in Russia so far is 13bn USD.
❖ There are approximately 4,500 Indian students enrolled in medical and technical
institutions in the Russian Federation.

3.12 India- Japan

Data/Facts ❖ India- Japan maintains a close friendship with a long history rooted in spiritual affinity and
strong culture.
❖ Diplomatic relations were established in 1952.
❖ Japan’s bilateral trade with India totalled US$ 20.57 billion during FY 2021-22.
❖ The Comprehensive Economic Partnership Agreement (CEPA) was established
between the two countries in 2011.
❖ Bilateral Cooperation/Multilateral groups involving India-Japan:
➢ Quadrilateral Security Dialogue or QUAD
➢ Supply Chain Resilience Initiative
➢ Asia-Africa Growth Corridor
➢ Acquisition and Cross-Servicing Agreement
➢ Indo-Pacific Economic Framework

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 3.13 India- Australia

Data/Facts ❖ The Economic and Cooperation Trade Agreement (ECTA) was operationalised
between the two countries.
❖ Target is to take the bilateral trade to 45-50 Billion USD.
❖ India’s imports from Australia amount to 17 US $ billion while its exports to Australia
amount to 10.5 US $ billion.
❖ Both have established 2+2 Dialogue.
❖ Bilateral Cooperation/Multilateral groupings between the two:
➢ Indo-Pacific Economic Framework
➢ Quadrilateral Security Dialogue or QUAD
➢ Supply Chain Resilience Initiative

3.14 India-UAE

Data/Facts ❖ A Comprehensive Economic Partnership Agreement (CEPA) was operationalised

between the two countries.
❖ It aims to increase the bilateral trade in goods to $100 billion within five years and trade
in services to $15 billion.
❖ UAE has the highest number of Indian Diaspora, approximately, 3.5 million.
❖ India is UAE’s second-largest trading partner accounting for 9% of its total foreign
trade and 14% of non-oil exports.
❖ UAE is India’s third biggest trade partner.
❖ India-UAE trade increased from US$ 180 million per year in the 1970s to US$ 72.8 billion
in FY21.

3.15 India-France

Data/Facts ❖ India-France bilateral trade in goods (excluding military equipment) stood at US$ 12.14
billion in 2021.
❖ France is the 11th largest foreign investor in India with a cumulative FDI stock of US$
10,389 million from April 2000 to September 2022, which represents 1.6% of the total
FDI inflows into India.
❖ Common Multilateral Groupings:
➢ G20
➢ Indian Ocean Rim Association

3.16 India-UK

Data/Facts ❖ The bilateral trade between the two countries increased to $17.5 billion in 2021-22
compared to $13.2 billion in 2020-21. India's exports stood at $10.5 billion in 2021-22,
while imports were $7 billion.
❖ India-UK Green Growth Equity Fund for mobilising finance for green energy.
❖ Common Multilateral Groupings:
➢ G20
➢ Commonwealth
➢ WTO

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 3.17 Important Groupings

Groupings Data/Facts

ASEAN ❖ ASEAN represents 8.7% of the total world population and a combined gross domestic
product (GDP) of $3.2 trillion.
❖ Members: Indonesia, Vietnam, Laos, Brunei, Thailand, Myanmar, the Philippines,
Cambodia, Singapore and Malaysia.
❖ Dialogue Partners of ASEAN: Australia, Canada, China, European Union, India, Japan,
Republic of Korea, New Zealand, Russia, and the United States.
❖ Year 2022 marks the 30th anniversary of India-ASEAN partnership.
❖ ASEAN-India Trade in Goods Agreement (AITIGA), was implemented in 2010.
❖ Merchandise trade between India and ASEAN countries rose to $ 110.40 Bn during the
period 2021-22.

G7 ❖ It is an informal grouping of the world's seven advanced economies.

❖ Members: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United
States. (Russia joined as a member in 1998 creating G8, however, was expelled post its
invasion of Crimea in 2014).
❖ It comprises the 1/10th of the world population and 46% of the Global GDP.
❖ Key Initiatives of G7:
➢ Financial Action Task Force (FATF)
➢ Global Fund to fight Malaria and Aids
➢ Global Apollo Program (to tackle climate change)
➢ Global Minimum Corporate Tax
➢ Build Back Better world.
➢ Partnership for Global Infrastructure and Investment (PGII)

G20 ❖ The G20 members represent around 85% of the global GDP, over 75% of the global
trade, and about two-thirds of the world population.
❖ Members: Argentina, Australia, Brazil, Canada, China, France, Germany, India,
Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa,
Türkiye, United Kingdom and United States and the European Union
❖ India took over as the President of G20 in 2023 from Indonesia.
❖ The theme of India’s Presidency - “Vasudhaiva Kutumbakam” or “One Earth · One
Family · One Future”.
❖ Black Sea Grain Initiative: Brokered by Turkey and UN during the 20th Summit in Bali.
It allowed for the export of food items and fertilisers from Russia and Ukraine.

EU ❖ It is a political and economic alliance of 27 (primarily European) countries which came into
force after signing the Maastricht Treaty.
❖ It represents 5.8% of the world population, approximately one sixth of global nominal
GDP and the third-biggest global economy after the United States and China.

BRICS ❖ It was formalised as BRIC (Brazil, Russia, India, and China) in 2006.
❖ The 1st BRIC summit was held in Yekaterinburg, Russia in 2009.
❖ The BRIC group was renamed as BRICS (Brazil, Russia, India, China, South Africa)
after South Africa was accepted as a full member in 2010.

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 ❖ BRICS brings together five major emerging economies, comprising 41% of the world
population, having 24% of the world GDP and 16% share in world trade.

BIMSTEC ❖ The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation
(BIMSTEC) is a regional organisation established in 1997 with the signing of the Bangkok
Declaration.
❖ Members: Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand
❖ It accounts for 22% of the world’s population with a combined GDP of $3.7 trillion.

SAARC ❖ The South Asian Association for Regional Cooperation (SAARC) was established in 1985.
❖ It has eight member countries- Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan and Sri-Lanka.
● SAARC comprises 3% of the world's land area, 21% of the world's population and
5.21% (USD 4.47 trillion) of the global economy, as of 2021.

SCO ❖ The Shanghai Cooperation Organization (SCO) is an intergovernmental organisation

founded in 2001.
❖ Eight Member States: China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan
and Uzbekistan.
❖ The eight member countries of SCO represent around 42% of the world population and
25% of the global GDP.

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