GS Paper: GS2-18.Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Why in the News

Closing the 18th BRICS Summit in New Delhi, the Prime Minister warned that the weaponisation of technology and of access to critical minerals can hinder the grouping’s shared progress, and set against it a commitment to inclusivity in the adoption of technology. The summit ran under the theme “Resilience, cooperation and sustainability” and issued the New Delhi Declaration, and India used its chair position to launch a set of standing mechanisms covering disease surveillance, disaster data, logistics, startup finance, small enterprise linkage and clean energy. The stated framing was that as BRICS enters its third decade the world expects concrete results from it rather than “merely ideas and commitments”. The tension inside the summit is that the members diagnosing the same problem, an order that disadvantages them, arrived with different remedies, from India’s delivery mechanisms to Russia’s sanctions workarounds and China’s call to rally the Global South.

What did India’s chair position argue?

1. Weaponisation of technology and critical minerals: Technology and access to critical minerals can both be used as instruments of pressure, and that use obstructs the development of the grouping’s members.
2. Inclusivity in technology adoption: Inclusivity in the adoption of technology was placed as the answer, meaning access on terms that do not depend on the supplier’s political posture.
3. Rising number of global conflicts: The rising number of global conflicts has an increasingly negative and far reaching effect on the lives of ordinary people.
4. Resilience as the organising idea: Pandemics, climate disasters and supply chain disruptions have all shown that no crisis stays confined to one region, so the work was framed around identifying challenges in time, being prepared and acting promptly.
5. The delivery test for the third decade: Entering its third decade, BRICS is expected to produce concrete results rather than ideas and commitments.

What new BRICS mechanisms were announced?

1. BRICS Integrated Early Warning System: Agreed for the prevention of and response to infectious diseases.
2. Early Warning Data Integration Guidelines: Prepared for disaster management across member states.
3. BRICS Logistics Supply Chain Cooperation Framework: Intended to make member supply chains more reliable and resilient.
4. BRICS Incubator Network and BRICS Startup Innovation Fund: The network connects startups and incubators across member states, and the fund has been proposed to back innovative and scalable solutions.
5. BRICS Network on Digital Agriculture: Connects artificial intelligence, geospatial technology and Digital Public Infrastructure, meaning shared open digital platforms for identity, payments and data exchange, to the working needs of farmers.
6. BRICS CONNECT: Aimed at skills, employability, women in the workforce, social security and capacity building.
7. BRICS MSME Cooperation Portal: Set up to link small enterprises to knowledge, finance and new markets.
8. BRICS Urban Mobility Hub: Established to share urban transport practices between member cities.
9. BRICS Digital Centre of Excellence: Established for smart grids and energy storage under the sustainability pillar of India’s strategy for the grouping.
10. Agriculture and climate centres: Centres of Excellence for Agro Ecology and Regenerative Agriculture were set up, alongside agreed principles for community based climate adaptation that treat indigenous knowledge as a foundation for climate action.

What did the other members put on the table?

1. China called for rallying the Global South: The Chinese President urged BRICS to rally the Global South so that an increasingly volatile international order is “free from double standards”, and stated that the logic of might makes right does not hold.
2. The norms China named: Global South countries were asked to defend sovereign equality, non interference in internal affairs and the peaceful settlement of disputes, and to insist that international law applies to all.
3. China’s five technology initiatives: An artificial intelligence open source community, an open ecosystem for artificial intelligence, a special economic zone partnership, a digital ecosystem cloud platform, and science and technology talent development.
4. Russia proposed two instruments against sanctions: The Russian President proposed a BRICS insurance mechanism and a collaborative BRICS grain market, and noted the grouping has independent routes for moving capital, labour and technologies.
5. The Western insurance bar on Russian crude: The G7, the European Union and the United Kingdom barred Western companies from insuring any ship carrying Russian crude unless the oil was bought at or below a specified price cap, which directly restricted Russian crude exports.
6. The New Development Bank was cited as the working asset: The multilateral development bank established by BRICS is handling projects worth $140 billion.
7. Iran pressed for national currency trade: The Iranian President argued that excessive dependence on existing financial and trade systems leaves emerging economies exposed to political shocks, backed expanded trade in national currencies and a strengthened New Development Bank, and said unilateral sanctions directly affect global food security.

What did the New Delhi Declaration record?

1. Historical racial injustice: The declaration took note of the racial injustice Africans have suffered historically.
2. A new inequality instrument: It noted the Brazilian and South African plan to start an “international panel on inequality”.
3. The historical frame invoked: It referred to decolonisation and to Asian African solidarity as displayed at the Bandung conference of 1955.
4. The Gaza proceedings: It named the South Africa initiated legal process at the International Court of Justice against Israel over its military campaign in the Gaza Strip, recording that those proceedings reaffirmed Israel’s legal obligation to ensure the provision of humanitarian aid in Gaza.

Challenges to BRICS as a delivery platform

1. Announced mechanisms have no compliance machinery behind them: A framework, a portal or a network created by summit declaration binds no member and carries no penalty for non participation. Eg. Eleven separate initiatives were announced in one closing session, none attached to a dated implementation milestone.
   The Fix: Attach each mechanism to a named lead member, a secretariat line and an annual reporting obligation to the next summit, so progress is recorded rather than assumed.
2. The membership no longer shares an economic interest: An expanded grouping now contains net oil exporters and net importers, and sanctioned and unsanctioned economies, so a single position on trade or energy is difficult to reach. Eg. Russia’s proposals at this summit were sanctions workarounds, while other members trade freely with the economies imposing them.
   The Fix: Move substantive work to plurilateral coalitions of the willing inside BRICS, so a mechanism is not held to the pace of its least interested member.
3. Two members carry an unresolved bilateral dispute: India and China sit inside the same grouping while an unsettled boundary question and a wide trade imbalance run between them. Eg. India’s trade deficit with China reached a record $112.6 billion in 2025-26.
   The Fix: Keep the grouping’s agenda to functional cooperation where the two members’ interests already align, such as disease surveillance and logistics, rather than to security coordination.
4. The de dollarisation agenda outruns the settlement infrastructure: Trade in national currencies requires convertibility, a clearing arrangement and an accepted reserve asset, and the grouping has none of the three at scale. Eg. Iran’s call for expanded national currency trade rests on the New Development Bank, which is capitalised in a fraction of the size of the trade flows involved.
   The Fix: Build a bilateral local currency settlement network with published reference rates before pursuing a common instrument, so the mechanism follows the trade rather than preceding it.
5. A larger grouping dilutes decision making: Expansion has raised the grouping’s representational claim while lowering the odds of consensus on anything contested. Eg. The grouping now runs to eleven members with a widening set of partner countries attending its summits.
   The Fix: Adopt a variable geometry rule under which an initiative proceeds with a stated minimum number of members rather than requiring unanimity.
6. Critical mineral security cannot be built by declaration: Processing capacity, not deposits, is the choke point, and it is concentrated outside most of the membership. Eg. The summit warned against the weaponisation of access to critical minerals without announcing any joint processing or stockpiling arrangement.
   The Fix: Create a joint BRICS strategic reserve and a shared processing investment vehicle for named minerals, so the warning is backed by capacity.

Conclusion

India’s chair year has ended with a set of standing mechanisms rather than a communique alone, which is the specific test the chair set for the grouping at the opening of its third decade. Those mechanisms are administrative rather than binding, and each one now needs a host institution, a budget line and a reporting schedule before it can be judged. The markers to watch are whether the proposed Startup Innovation Fund is capitalised and whether the Integrated Early Warning System is stood up with named national focal points before the next summit, since those two are the initiatives that require money and institutional commitment rather than agreement alone.

Back2Basics: New Development Bank

1. New Development Bank: A multilateral development bank established by the BRICS countries to finance infrastructure and sustainable development projects in member states and other emerging economies.
2. Headquarters in Shanghai: Its headquarters is in Shanghai, and it operates regional offices in member countries.
3. Equal shareholding among founders: Founding members hold equal shareholding, which distinguishes it from the weighted voting used by the Bretton Woods institutions.
4. A project book of $140 billion: It is handling projects worth about $140 billion.

Matching Previous Year Question

“[2025] Consider the following statements with regard to BRICS: I. The 16th BRICS Summit was held under the Chairship of Russia in Kazan. II. Indonesia has become a full member of BRICS. III. The theme of the 16th BRICS Summit was Strengthening Multiculturalism for Just Global Development and Security. Which of the statements given above is/are correct? (a) I and II (b) II and III (c) I and III (d) I only ANSWER: (a)”

Why in the News

The European Commission has forwarded its proposal for the conclusion of a Free Trade Agreement (FTA) between the European Union (EU) and India to the European Council, the step that immediately precedes signature. The Commission is the EU’s main executive body and proposes the trade legislation. The European Council, comprising the heads of state or government of the 27 member states along with its own President and the President of the Commission, takes the final decision on authorising signature. On authorisation this becomes the largest trade agreement either side has concluded, eliminating or reducing tariffs on 96 per cent of EU goods exports to India and securing market access for more than 99 per cent of India’s exports to the EU by trade value. Signature is not conclusion, since the European Parliament’s consent and India’s own internal ratification both remain. The agreement also answers a problem neither side names in its text, which is that both import most of their industrial inputs from China.

How does an EU trade agreement get approved?

1. The Commission negotiates and proposes: The European Commission conducts the negotiation and then proposes the legislation for concluding the agreement.
2. The Council authorises signature: The European Council defines the general political direction and priorities of the EU, and its members take the final decision on whether the agreement is signed.
3. Parliament’s consent follows signature: The agreement then requires the consent of the European Parliament before conclusion and entry into force.
4. India ratifies in parallel: Indian authorities are going through their own internal ratification procedures at the same time.

What is the existing size of the relationship?

1. Current trade: The EU and India already trade over Euro 180 billion worth of goods and services a year, with one Euro equal to about US $1.16.
2. Employment on the EU side: That trade supports close to 800,000 EU jobs.
3. What the agreement would be: On authorisation it would be the largest trade agreement ever concluded by either the EU or India.

What does the agreement give the EU?

1. Tariff elimination on almost all its goods: Tariffs on 96 per cent of EU goods exports to India would be eliminated or reduced.
2. The value of the duty relief: The reductions would save around Euro 4 billion a year in duties on European products.
3. Competitive position in the Indian market: European companies would find it easier to access the Indian market and to compete on a more level playing field.
4. The consumer side: Indian consumers would gain increased choice and more competitive prices.

What does the agreement give India?

1. Near total market access for goods: It would secure market access for more than 99 per cent of India’s exports to the EU by trade value.
2. Services and the movement of professionals: It unlocks high-value commitments in services, complemented by a comprehensive mobility framework enabling the movement of skilled Indian professionals.
3. The labour-intensive sectors it targets: Textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles are named as the gainers.
4. The immediate tariff effect: Tariffs of up to 10 per cent on almost $33 billion of Indian exports fall to zero on the agreement’s entry into force.

Why did the two sides restart negotiations in 2022?

1. China’s trade surplus was the trigger: A key reason for reopening talks in 2022 was China’s growing trade surplus with both partners.
2. Both import their industrial inputs from the same source: The EU and India each import most of their industrial requirements from China, and Beijing’s tightening grip on manufacturing supply chains is reflected in its record trade surplus, which trade friction with the United States has not reduced.
3. Both are restricting Chinese goods in strategic sectors: Brussels imposed tariffs of up to 35 per cent on Chinese electric vehicles in 2024, and India continues to levy over 100 per cent duty on automobiles imported from China, and is opening the sector to developed countries through trade agreements.
4. The dependence has been assessed and not removed: A 2025 report by the Delhi Policy Group found both India and the EU still significantly dependent on China.
5. The pandemic changed the calculation: The COVID-19 pandemic in 2020 exposed the vulnerability of China-centric supply chains, prompting both to reassess dependencies and to pursue diversification and de-risking.

What pressure is the United States applying to both sides?

1. The stated objective: India and the EU are both under US pressure to reduce dependence on Chinese products and to avoid being used as transhipment hubs.
2. Indian manufacturing clusters named: A US report last month described several global manufacturing city clusters as “ugly sister” cities, including the Pune-Gujarat-Chennai industrial corridor, and stated that the United States loses when these hubs win.
3. The argument it makes: The report held that the longer the system operates unchecked, the harder it becomes to restore lost industrial capacity, and that illegal transhipment hubs will continue to siphon off American manufacturing one product line at a time.

Challenges to the India-EU free trade agreement

1. A carbon levy sits outside the tariff schedule: The EU’s Carbon Border Adjustment Mechanism, a charge on the embedded carbon of an imported good, applies irrespective of the tariff concessions granted. Eg. It covers iron and steel, aluminium, cement, fertilisers, electricity and hydrogen, with the definitive charge beginning in 2026.
   The Fix: Agree mutual recognition of India’s carbon pricing under its Carbon Credit Trading Scheme, so a charge paid in India is set off at the EU border.
2. Deforestation rules add a traceability duty to a tariff cut: The EU Deforestation Regulation requires geolocation of the plot of production for listed commodities, which a smallholder supply chain cannot document. Eg. Coffee, cocoa, rubber, soy, palm oil, cattle and wood are covered by it.
   The Fix: Fund plot-level geolocation through the commodity boards, so the compliance cost does not fall on the individual grower.
3. Rules of origin decide who actually uses a zero duty: A concession is usable only where the product clears the value addition test, and an export assembled from imported inputs may not. Eg. Electronics assembled in India from imported components can fail a threshold that garments made from Indian fabric clear comfortably.
   The Fix: Agree cumulation, so inputs sourced from the partner count as originating and the concession reaches assembled goods.
4. Ratification is a sequence, not a decision: Council authorisation and Parliament consent are separate steps, and an agreement classed as mixed can additionally require ratification by each member state. Eg. The EU’s agreement with Mercosur concluded negotiations in 2019 and remained outside force for years afterwards.
   The Fix: Split the text so the trade chapters enter into force on Parliament’s consent, with investment protection carried in a separate instrument.
5. Non-tariff measures bind harder than tariffs in food trade: Sanitary and phytosanitary limits decide whether a consignment enters at all, and a zero tariff does nothing for a rejected shipment. Eg. Indian marine and food consignments face EU rejections on antibiotic residue and aflatoxin limits.
   The Fix: Agree recognition of testing by notified Indian laboratories, so a consignment is certified once at origin rather than retested at the border.

Conclusion

The text is settled and the decision has moved from negotiators to governments. Three gates remain in sequence: authorisation by the Council, consent of the European Parliament, and India’s internal ratification, and the concessions take effect only at entry into force. Those concessions are also the part of the agreement least likely to decide its value, since the measures that actually restrict Indian exports operate through carbon, deforestation and food safety rules that no tariff schedule touches. What to watch is the Council’s authorisation decision, and whether the agreement is classed as a mixed agreement, which would add ratification by every member state to the path.

Matching Previous Year Question

“[2010] In the context of bilateral trade negotiations between India and European Union, what is the difference between European commission and European Council? 1. European Commission represents the EU in trade negotiations whereas European Council participated in the legislation of matters pertaining to economic policies of the European Union 2. European Commission comprises the heads of State of govt. of member countries whereas the European Council comprises of the persons nominated by European Parliament Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 ANSWER: (d)”