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

By 2 min read Updated Oct 2026 #quick revision#international-relations#effect-of-policies-of-other-countries

The policies to name in Prelims, and the channels to structure Mains answers around.

The Six Channels

ChannelDeveloped-country exampleDeveloping-country example
TradeUS tariffs; EU CBAMChinese dumping
MoneyUS Fed rate rises; taper tantrum 2013Debt crises in neighbours (Sri Lanka 2022)
PeopleH-1B rules; student-visa capsGulf localisation (Nitaqat) and kafala
SanctionsUS sanctions on Iran and Russia; CAATSA— (India recognises only UNSC sanctions as binding)
SecurityTechnology export controlsTerrorism from Pakistan; CPEC; coups and instability
ResourcesCritical-mineral partnershipsOPEC+ output cuts; China’s rare-earth controls

Policies and Dates

PolicyCountryDate
Section 232 steel and aluminium tariffsUSMarch 2018
Exit from JCPOAUSMay 2018
Chabahar exemption from Iran sanctionsUSNovember 2018
End of India’s GSP benefitsUSJune 2019
CAATSAUSAugust 2017
Inflation Reduction Act; CHIPS and Science ActUSAugust 2022
G7 price cap on Russian crudeG7December 2022
CBAM transitional phaseEUOctober 2023
CBAM definitive phaseEUJanuary 2026
Rare-earth export restrictionsChinaApril 2025

India’s Toolkit

ToolExample
Trade agreementsUAE CEPA (2022), Australia ECTA (2022), EFTA TEPA (2024), UK CETA (2025)
Payment workaroundsSpecial Rupee Vostro Accounts (RBI, July 2022)
Energy buffersStrategic petroleum reserves at Visakhapatnam, Mangaluru, Padur
MineralsNational Critical Mineral Mission (2025); KABIL; Minerals Security Partnership (2023)
Industrial policyProduction Linked Incentive schemes
DiplomacyExemptions (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.
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