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4 Feb 2026·Source: The Indian Express
4 min
International RelationsEconomyNEWS

PM Modi: World Tilting Towards India After Trade Deals

PM Modi says India is shaping the new world order after trade deals.

PM Modi: World Tilting Towards India After Trade Deals

Photo by Kyle Glenn

Prime Minister Narendra Modi told NDA MPs that India is at the global center-stage, shaping the new order and "the world is tilting towards India". This statement was made a day after the announcement of a trade deal with the US, following months of negotiations.

Modi referred to India's trade deal with the US days after a pact with the EU, describing it as a "big decision that will benefit a large section of people in the country". He also hailed the India-EU trade deal as the "mother of all deals".

Key Facts

1.

PM Modi: World tilting towards India

2.

India shaping new world order

3.

Trade deal with US announced

4.

India-EU trade deal hailed

UPSC Exam Angles

1.

GS Paper 2: International Relations - Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests.

2.

Connects to the syllabus by highlighting India's trade policies and its role in international trade agreements.

3.

Potential question types: Statement-based questions on trade agreements, their impact, and India's position.

Visual Insights

India's Trade Agreements: EU and US

This map highlights the EU and the US, India's key trade partners following recent trade deals.

Loading interactive map...

📍United States📍European Union
More Information

Background

The concept of trade agreements is deeply rooted in the history of international relations. Early forms of trade involved bartering systems, which gradually evolved into more complex agreements between nations. The General Agreement on Tariffs and Trade (GATT), established in 1948, was a significant milestone in promoting international trade by reducing tariffs and trade barriers. This laid the foundation for the World Trade Organization (WTO). Over time, trade agreements have become more comprehensive, encompassing not only goods but also services, intellectual property, and investment. The evolution from GATT to the WTO in 1995 marked a shift towards a rules-based system for international trade. Regional trade agreements, such as the European Union (EU), have also played a crucial role in fostering economic integration among member countries. These agreements often involve complex negotiations and can have significant economic and political implications. India's engagement with trade agreements has evolved significantly since its independence. Initially, India followed a protectionist approach, emphasizing import substitution and limiting foreign competition. However, with the economic reforms of 1991, India began to liberalize its trade policies and actively participate in regional and multilateral trade agreements. The Constitution of India empowers the Union government to enter into treaties and agreements with other countries, as trade falls under the Union List.

Latest Developments

Recent years have witnessed a surge in bilateral and regional trade negotiations involving India. The government has been actively pursuing free trade agreements (FTAs) with various countries and regions to boost exports and attract foreign investment. The Regional Comprehensive Economic Partnership (RCEP), though India opted out, remains a significant development in the Asia-Pacific region, influencing India's trade strategy. There is ongoing debate regarding the benefits and drawbacks of FTAs, with concerns raised about their impact on domestic industries and agriculture. Some stakeholders argue that FTAs can lead to increased competition and job losses, while others emphasize the potential for export growth and economic development. Institutions like NITI Aayog are involved in analyzing the economic impact of trade agreements and providing recommendations to the government. Looking ahead, India is expected to continue its focus on strengthening trade relations with key partners and diversifying its export basket. The government has set ambitious targets for increasing exports and attracting foreign investment, with trade agreements playing a crucial role in achieving these goals. The success of these efforts will depend on effective implementation, addressing domestic challenges, and navigating the complexities of the global trading environment.

Frequently Asked Questions

1. What is the main point of PM Modi's statement regarding India's position in the world, according to the news?

PM Modi stated that the world is tilting towards India and that India is at the global center-stage, shaping the new world order, especially after recent trade deals.

2. What are the key facts to remember about the recent trade deals mentioned in the news for the UPSC Prelims exam?

The key facts are that PM Modi hailed India's trade deal with the US and the India-EU trade deal. He described the India-EU trade deal as the "mother of all deals."

3. Why is the topic of India's trade deals and global position in the news recently?

This topic is in the news because PM Modi made a statement about India shaping the new world order after the announcement of a trade deal with the US and following a pact with the EU.

4. How might India's focus on trade deals impact the common citizen?

Trade deals can potentially benefit a large section of people in the country, as stated by PM Modi. These deals can lead to increased economic activity, job creation, and access to a wider variety of goods and services.

5. What is a 'trade deal' and why is it important for a country like India?

A trade deal is an agreement between two or more countries to reduce barriers to trade, such as tariffs and quotas. It is important for India as it can boost exports, attract foreign investment, and promote economic growth.

6. What is the historical background to the current focus on trade deals?

The General Agreement on Tariffs and Trade (GATT), established in 1948, was a significant milestone in promoting international trade by reducing tariffs and trade barriers. Recent years have witnessed a surge in bilateral and regional trade negotiations involving India.

7. Considering PM Modi's statement, what reforms might be needed to ensure India truly benefits from these trade deals?

While the provided text doesn't specify reforms, generally, to benefit from trade deals, reforms in infrastructure, skill development, and regulatory frameworks are often necessary to enhance competitiveness and facilitate trade.

8. What was the General Agreement on Tariffs and Trade (GATT)?

The General Agreement on Tariffs and Trade (GATT), established in 1948, was a significant milestone in promoting international trade by reducing tariffs and trade barriers.

9. What is the Regional Comprehensive Economic Partnership (RCEP)?

The Regional Comprehensive Economic Partnership (RCEP) is a significant development in the Asia-Pacific region, though India opted out. The topic data does not provide further details.

10. What could be potential questions related to India's trade deals that an interviewer might ask during the UPSC personality test?

An interviewer might ask about the pros and cons of India's trade deals, the impact on domestic industries, and India's strategy in navigating the global trade landscape. They might also ask your opinion on whether India's current approach to trade deals is beneficial for its long-term economic growth.

Practice Questions (MCQs)

1. Consider the following statements regarding the General Agreement on Tariffs and Trade (GATT): 1. GATT was established in 1948 with the primary goal of reducing tariffs and trade barriers. 2. GATT was a permanent organization with enforcement powers to resolve trade disputes. 3. The Uruguay Round of GATT negotiations led to the creation of the World Trade Organization (WTO). Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.1 and 3 only
  • C.2 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: B

Statement 1 is CORRECT: GATT was indeed established in 1948 with the primary goal of reducing tariffs and trade barriers among member nations. Statement 2 is INCORRECT: GATT was NOT a permanent organization and lacked strong enforcement powers. It operated on a provisional basis until the establishment of the WTO. Statement 3 is CORRECT: The Uruguay Round of GATT negotiations (1986-1994) led to the creation of the WTO in 1995, which replaced GATT and provided a more robust framework for international trade.

2. In the context of India's trade agreements, consider the following statements: 1. The Constitution of India empowers the Union government to enter into treaties and agreements with other countries. 2. Trade falls under the State List in the Seventh Schedule of the Constitution. 3. India is a member of the Regional Comprehensive Economic Partnership (RCEP). Which of the statements given above is/are correct?

  • A.1 only
  • B.2 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The Constitution of India empowers the Union government to enter into treaties and agreements with other countries, as trade falls under the Union List. Statement 2 is INCORRECT: Trade falls under the Union List, not the State List, in the Seventh Schedule of the Constitution. Statement 3 is INCORRECT: India is NOT a member of the Regional Comprehensive Economic Partnership (RCEP). India decided to opt out of RCEP negotiations in 2019.

3. Which of the following institutions is involved in analyzing the economic impact of trade agreements and providing recommendations to the government in India?

  • A.Reserve Bank of India (RBI)
  • B.NITI Aayog
  • C.Ministry of Finance
  • D.Export-Import Bank of India (EXIM Bank)
Show Answer

Answer: B

NITI Aayog is involved in analyzing the economic impact of trade agreements and providing recommendations to the government. While other institutions like RBI, Ministry of Finance, and EXIM Bank play important roles in economic policy, NITI Aayog specifically focuses on policy analysis and recommendations related to trade and development.

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