Chapter 6 · Topic 6.2 · Prelims + Mains2 of 3

Other Countries’ Policies & Indian Diaspora: How other countries’ policies affect India

Key points

  • Policies abroad that hit India: sanctions, tariffs, visas, export controls, carbon border taxes, oil decisions.
  • US-Iran row affects oil, Chabahar, the North-South corridor and the Gulf diaspora.
  • Western de-risking from China brings investment to India.
  • Wassenaar Arrangement covers conventional arms and dual-use goods.

Prelims box: facts and traps

Policy abroadEffect on India
Sanctions (Iran, Russia)Oil, payments, projects
Tariffs and trade warsExports, but also new investment
Visa rulesIT professionals, students
Export controlsAccess to technology
Carbon border tax (EU CBAM)Steel, aluminium exports

How other countries’ policies affect India

Quick answerDecisions made by big powers, like sanctions, tariffs, visa rules, technology controls and carbon taxes, can hurt or help India directly. UPSC asks you to show both sides with examples.

When a big shop changes prices, nearby shops feel it. Likewise, decisions in Washington, Beijing, Brussels or the Gulf can hit India directly:

  • sanctions (trade bans on a country) and tariffs,
  • visa rules for professionals,
  • export controls on technology,
  • carbon border taxes, which charge imports by how much pollution they caused,
  • oil supply decisions.

Mains 2018 asked how the US-Iran nuclear pact row affects India: oil imports, Chabahar port, the North-South Transport Corridor and the Gulf diaspora. India diversified oil and sought waivers.

Asked by UPSCUPSC Mains 2018 · GS Paper II · Q20 · 15 marks

In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation?

Mains 2024 noted the West is fostering India as an alternative to China’s supply chains. This is a positive spillover: investment shifts to India in electronics and clean technology.

Asked by UPSCUPSC Mains 2024 · GS Paper II · Q9 · 10 marks

‘The West is fostering India as an alternative to reduce dependence on China’s supply chain and as a strategic ally to counter China’s political and economic dominance.’ Explain this statement with examples.

Prelims 2011: the USA backed India’s entry into the export control groups called the “Australia Group” and the “Wassenaar Arrangement”. Neither statement is correct. Wassenaar is not an OECD body with identical aims (it covers conventional arms and dual-use goods),. Answer (d).

Asked by UPSCUPSC Prelims 2011 · GS Paper I · Q49

Recently, the USA decided to support India’s membership in multi-lateral export control regimes called the “Australia Group” and the “Wassenaar Arrangement”. What is the difference between them ? 1. The Australia Group is an informal arrangement which aims to allow exporting countries to minimize the risk of assisting chemical and biological weapons proliferation, whereas the Wassenaar Arrangement is a formal group under the OECD holding identical objectives. 2. The Australia Group comprises predominantly of Asian, African and North American countries, whereas the member countries of Wassenaar Arrangement are predominantly from the European Union and American continents. Which of the statements given above is/are correct ?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: (d) · UPSC official key

Policy abroadEffect on India
Sanctions (Iran, Russia)Oil, payments, projects
Tariffs and trade warsExports, but also new investment
Visa rulesIT professionals, students
Export controlsAccess to technology
Carbon border tax (EU CBAM)Steel, aluminium exports

What UPSC asks: Prelims: export control regimes. Mains: US-Iran effects, supply chains, EU CBAM.

Mains box: analysis and answer points

  • Hurts: sanctions, visa curbs, CBAM on steel and aluminium.
  • Helps: supply-chain shift away from China.
  • Response: diversify, seek waivers, keep ties with all sides.

Practice

Mains PYQs on this topic (1)

Write an answer

In 150 words, explain the significance of Other Countries’ Policies & Indian Diaspora with one recent example.

Flashcards (4)

US-Iran row hurts?

Oil, Chabahar, diaspora.

Wassenaar covers?

Conventional arms, dual-use.

Australia Group covers?

Chemical and biological.

CBAM hits?

Steel, aluminium exports.

Read more: related explainers

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