17 Feb 2026·Source: The Hindu

4 min

EconomyInternational RelationsNEWS

India's Growing Economic Influence Attracts Developed and Developing Nations

India is increasingly sought after by developed and global south economies.

Photo by Satyajeet Mazumdar

India is in demand by both developed countries and global south economies. Developed countries want to engage with India, while smaller countries want India to anchor projects in their countries. The Future Economic Cooperation Council (FECC) is organizing a three-day Global Economic Cooperation (GEC) summit in Mumbai, bringing together delegations from developed and developing countries.

The FECC is backed by the Ministry of External Affairs and the Govt. of Maharashtra. The ongoing global disruption is affecting every country, but simultaneously places India at an interesting intersection.

Key Facts

Developed countries are seeking increased engagement with India.

Smaller countries want India to anchor projects in their countries.

The Future Economic Cooperation Council (FECC) is organizing a Global Economic Cooperation (GEC) summit in Mumbai.

The FECC is backed by the Ministry of External Affairs and the Govt. of Maharashtra.

UPSC Exam Angles

GS Paper 2: International Relations - India's economic diplomacy and its impact on foreign policy.

GS Paper 3: Economy - Investment models, economic growth and development.

Potential question types: Analytical questions on India's role in global economic governance.

In Simple Words

India is getting a lot of attention from other countries. Rich countries want to work with India, and smaller countries want India to help them with their projects.

India Angle

This means more opportunities for Indian businesses to expand globally. It could also lead to more foreign investment and job creation in India.

For Instance

Think of it like your local shop becoming popular; everyone wants to buy from them, and other shops want to partner with them.

This increased global interest can lead to economic growth and better opportunities for Indians.

India's rising influence: Everyone wants a piece of the pie.

Visual Insights

Global Economic Cooperation Summit: Participating Regions

This map highlights the regions from which delegations are expected to attend the Global Economic Cooperation (GEC) summit in Mumbai, showcasing India's growing economic influence.

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📍Mumbai📍Developed Countries📍Developing Countries

More Information

Background

India's growing economic influence is built upon decades of economic reforms and strategic policy decisions. The economic liberalization of the 1990s opened the Indian market to foreign investment and spurred economic growth. Subsequent governments have focused on improving infrastructure, promoting manufacturing through initiatives like Make in India, and fostering a vibrant start-up ecosystem. These efforts have collectively positioned India as an attractive destination for both developed and developing nations. India's engagement with developed countries often revolves around trade, technology transfer, and investment. Developed nations seek access to India's large and growing consumer market, as well as its skilled workforce. Simultaneously, India has been actively strengthening its ties with countries in the Global South through initiatives like concessional loans, capacity building, and infrastructure development projects. This dual approach reflects India's ambition to play a leading role in the global economy and to be a bridge between the developed and developing worlds. The Ministry of External Affairs plays a crucial role in shaping and implementing India's foreign economic policy. It coordinates with various government departments and agencies to promote India's economic interests abroad. The Ministry also facilitates trade negotiations, investment promotion, and economic cooperation agreements with other countries. The involvement of the Ministry of External Affairs in events like the Global Economic Cooperation summit underscores the importance of economic diplomacy in India's foreign policy.

Latest Developments

In recent years, India has actively pursued Free Trade Agreements (FTAs) with several countries and blocs, including the United Kingdom, the European Union, and the Gulf Cooperation Council. These agreements aim to reduce tariffs, promote trade, and enhance economic cooperation. The outcomes of these negotiations will significantly impact India's trade relations and economic growth in the coming years. India's economic diplomacy has also focused on attracting foreign investment in key sectors such as infrastructure, manufacturing, and technology. The government has implemented various policy reforms to improve the ease of doing business and to create a more investor-friendly environment. These efforts have resulted in increased foreign direct investment inflows and have contributed to India's economic growth. Looking ahead, India aims to become a $5 trillion economy by 2025. Achieving this ambitious goal will require sustained economic growth, increased investment, and continued reforms. The government is focused on promoting innovation, entrepreneurship, and skill development to create a globally competitive economy.

Frequently Asked Questions

1. What is the significance of the Global Economic Cooperation (GEC) summit being organized by the Future Economic Cooperation Council (FECC)?

The GEC summit, backed by the Ministry of External Affairs and the Government of Maharashtra, highlights India's growing economic influence and its appeal to both developed and developing nations. It serves as a platform for fostering economic cooperation and exploring opportunities for India to anchor projects in smaller countries.

2. For UPSC Prelims, what are the key facts to remember about the organizations involved in the Global Economic Cooperation (GEC) summit?

Remember that the Future Economic Cooperation Council (FECC) is organizing the Global Economic Cooperation (GEC) summit. Also, the FECC is backed by the Ministry of External Affairs and the Government of Maharashtra. Knowing these relationships can be helpful in answering factual MCQs.

Exam Tip

Focus on the full forms and the roles of organizations mentioned in the news.

3. How does India's current economic position allow it to attract both developed and developing nations?

India's economic growth, driven by reforms and strategic policies, makes it an attractive partner for developed countries seeking economic engagement. Simultaneously, its capacity to anchor projects makes it a valuable partner for developing nations seeking economic development and stability.

4. What is the significance of India pursuing Free Trade Agreements (FTAs) with various countries and blocs?

India's pursuit of FTAs with countries like the UK, EU, and GCC aims to reduce tariffs, promote trade, and enhance economic cooperation. These agreements are crucial for boosting India's economic growth and strengthening its trade relations in the coming years.

5. How might India's growing economic influence impact the common citizen?

Increased economic engagement with other countries can lead to more job opportunities, access to cheaper goods, and overall economic growth. However, it can also lead to increased competition and potential disruptions in certain sectors. The impact on the common citizen depends on how effectively the government manages these changes.

6. Explain the background context of India's growing economic influence.

India's growing economic influence is rooted in the economic liberalization of the 1990s, which opened the market to foreign investment. Subsequent initiatives like 'Make in India' and the promotion of a start-up ecosystem have further contributed to this growth.

Practice Questions (MCQs)

1. The Future Economic Cooperation Council (FECC) is backed by which of the following?

A.NITI Aayog and the Reserve Bank of India
B.Ministry of Finance and the Government of India
C.Ministry of External Affairs and the Government of Maharashtra
D.Ministry of Commerce and Industry and the Government of Gujarat

Show Answer

Answer: C

The Future Economic Cooperation Council (FECC) is backed by the Ministry of External Affairs and the Government of Maharashtra. This information is explicitly stated in the provided summary. The other options are incorrect as they do not align with the information provided in the summary.

2. Consider the following statements regarding India's economic engagement with other nations: 1. Developed countries are interested in engaging with India due to its large and growing consumer market. 2. Smaller countries are seeking India's involvement to anchor projects within their territories. 3. The ongoing global disruption has no impact on India's economic standing. Which of the statements given above is/are correct?

A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: A

Statements 1 and 2 are correct as they accurately reflect the information provided in the summary. Developed countries are indeed interested in India's consumer market, and smaller countries seek India's involvement in anchoring projects. Statement 3 is incorrect because the summary explicitly states that the ongoing global disruption is affecting every country, including India. Therefore, it has an impact on India's economic standing.

3. Which of the following best describes the primary objective of the Global Economic Cooperation (GEC) summit organized by the Future Economic Cooperation Council (FECC)?

A.To promote cultural exchange between developed and developing nations.
B.To facilitate discussions and collaborations between developed and developing countries in the economic sphere.
C.To address environmental concerns and promote sustainable development.
D.To resolve political disputes and foster peace among nations.

Show Answer

Answer: B

The Global Economic Cooperation (GEC) summit, organized by the Future Economic Cooperation Council (FECC), primarily aims to facilitate discussions and collaborations between developed and developing countries in the economic sphere. This is evident from the context of the provided summary, which highlights India's growing economic influence and its engagement with both developed and developing nations.