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Subject: Bilateral Relations

1. Major World Events
2. India’s Interests in neighbourhood
3. Effects of our Policies

  • Trading smart: On the India-New Zealand FTA

    Trading smart: On the India-New Zealand FTA

    Why in the News

    The India-New Zealand Free Trade Agreement (FTA) comes into force on 20 October. India has secured duty free access on 100 per cent of its exports to New Zealand, a historic concession. India held firm on dairy, an opening New Zealand’s negotiators had pressed for, and kept the sector out of the deal. The agreement lands while 100 per cent United States tariffs loom over Indian goods and a trade deal with Washington remains elusive. The contested point is whether the macroeconomic size of a trade relationship is the right test of whether an agreement was worth negotiating.

    What is the India-New Zealand Free Trade Agreement?

    1. Trade volume covered: Bilateral goods trade between the two countries is $1.1 billion, which is less than 1 per cent of India’s total goods trade. The deal envisages a doubling by 2030.
    2. Tariff outcome on each side: New Zealand gives duty free access on 100 per cent of India’s exports to it. India has kept nearly 30 per cent of its own import lines outside the tariff concessions.

    Why is macroeconomic size the wrong test of a trade deal?

    1. Trade as livelihood: Trade is a source of livelihood for lakhs of businesses, nearly half of which are micro, small and medium enterprises. A share of gross trade does not capture that.
    2. Rerouting as insurance: Adverse developments in tariffs or the closure of trade routes can be mitigated to an extent by a nimble rerouting of trade to countries where Indian exporters hold an advantage.
    3. The current trade environment: Indian exporters need every alternative channel that can be opened, because the largest single market for them is neither open nor settled.

    Which Indian exports stand to gain?

    1. Labour intensive lines: Textiles make up about 14 per cent of India’s exports to New Zealand. Pearls and semi precious stones constitute another 5 per cent or so.
    2. Capital intensive lines: One third of India’s exports to New Zealand are pharmaceuticals, parts of nuclear reactors, vehicular parts, mineral fuels, electrical machinery, and iron and steel.
    3. The mix itself: India carries a good mix of capital intensive and labour intensive exports to New Zealand. Both halves of that mix stand to benefit from the duty free access.

    What did India protect, and what did it extract?

    1. Dairy exclusion: Opening India’s dairy sector was a major demand of the New Zealand negotiators. India held firm and excluded it from the deal.
    2. Labour mobility: India has won valuable concessions on visas for workers and students. Several western countries are clamping down on foreign worker inflows, so an alternative route carries real relief.
    3. Investment commitment: New Zealand has committed to facilitate investments of $20 billion in India over 15 years. The commitment is smaller than, but along the same lines as, the one in India’s agreement with the European Free Trade Association (EFTA) bloc.
    4. Why the investment matters: India needs foreign investment for economic growth and to manage its balance of payments.

    Challenges to the India-New Zealand Free Trade Agreement

    1. Duty free access does not clear non tariff requirements: A zero tariff is not market access where sanitary and phytosanitary standards and certification stop the consignment at the border. Eg. New Zealand operates one of the strictest biosecurity regimes in the world for plant and animal products.
      The Fix: Negotiate mutual recognition of conformity assessment and pair the agreement with testing and certification support for exporters.
    2. Small exporters cannot use preferences they do not know about: Preference utilisation stays low where a small firm does not know the tariff line, the origin rule or the certification procedure. Eg. Low preference utilisation has been a standing complaint about India’s earlier trade agreement with the Association of Southeast Asian Nations (ASEAN).
      The Fix: Run a sector wise outreach programme through export promotion councils publishing the tariff line, the origin rule and the documentation for each covered product.
    3. An excluded sector is a standing demand, not a settled question: A sector kept out of one agreement returns as a demand in the next round and in every other negotiation India is running. Eg. Agricultural and dairy access has been a contested demand in India’s negotiations with the United States.
      The Fix: State the ground for the exclusion, which is the feed certification requirement and smallholder livelihoods, as a standing position rather than renegotiating it deal by deal.
    4. Mobility concessions depend on domestic politics abroad: A visa concession sits in a treaty schedule, and the actual issuance sits with an immigration policy that changes with the government of the day. Eg. Several western countries have tightened foreign worker inflows within the past two years.
      The Fix: Convert the concession into numerical quotas and processing timelines written into the agreement’s own schedule rather than a facilitation commitment.
    5. Investment facilitation is not investment: A commitment to facilitate a sum over 15 years binds no firm to invest anything. Eg. The EFTA agreement carries a $100 billion facilitation commitment of the same design.
      The Fix: Attach a periodic review with published investment data, so a shortfall is visible against the timeline rather than at the end of it.

    Conclusion

    The case for a small trade agreement does not rest on the trade it currently covers. It rests on giving exporters a channel that does not depend on one large market staying open, and on winning terms a bigger partner would not concede. India has done both here. What is not settled is whether the same approach survives a negotiation in which the partner holds the leverage, and the pending talks with Washington are where that will show.

    Back2Basics: European Free Trade Association

    1. What it is: EFTA is an intergovernmental organisation and free trade area founded in 1960 by the Stockholm Convention.
    2. Members: It has four member states, Iceland, Liechtenstein, Norway and Switzerland. None of them is a member of the European Union.
    3. Relationship with the EU: Three of the four take part in the EU single market through the European Economic Area. Switzerland deals with the EU through separate bilateral agreements.
    4. Agreement with India: India and EFTA signed the Trade and Economic Partnership Agreement (TEPA) in March 2024.
  • Exercise Veer Guardian 2026

    Exercise Veer Guardian 2026

    Why in the News?

    • Exercise Veer Guardian 2026, a bilateral air exercise between the Indian Air Force (IAF) and Japan Air Self Defense Force (JASDF), concluded on 22 September 2026 at Air Force Station Jodhpur.

    Key Highlights

    • Participants: Indian Air Force (IAF) and Japan Air Self Defense Force (JASDF).
    • Duration: 14 days.
    • Venue: Air Force Station Jodhpur.
    • Indian aircraft: Su-30 MKI, Rafale and indigenous LCA Tejas.
    • Japanese aircraft: F-2A fighter aircraft.
    • Focused on:
      • Within Visual Range (WVR) combat
      • Coordinated multi-aircraft missions
      • Enhancing interoperability between the two air forces.
    • General Takehiro Morita, Chief of Staff, JASDF, and Air Chief Marshal AP Singh, Chief of the Air Staff, visited the exercise.
    • Both officials flew the indigenous Tejas fighter aircraft.

    Strategic Significance

    • Strengthens India-Japan defence cooperation.
    • Enhances interoperability and operational coordination.
    • Deepens the strategic partnership between the two countries.
    • Provides exposure to each other’s operational procedures, maintenance practices and capabilities.

    Prelims Quick Revision

    • Exercise: Veer Guardian 2026
    • Countries: India and Japan
    • Air forces: IAF and JASDF
    • Venue: Air Force Station Jodhpur
    • Duration: 14 days
    • IAF aircraft: Su-30 MKI, Rafale, LCA Tejas
    • JASDF aircraft: F-2A
    • Key focus: WVR combat and coordinated multi-aircraft missions

    UPSC Prelims Trap

    • Veer Guardian is a bilateral India-Japan air exercise, involving IAF and JASDF.
    • Tejas was deployed by the IAF, while F-2A was deployed by the JASDF.
    • The exercise was conducted at Jodhpur, not in Japan.
    • Do not confuse WVR combat with beyond-visual-range combat.
  • Exercise NOMADIC ELEPHANT 2026

    Exercise NOMADIC ELEPHANT 2026

    Why in the News?

    • The 18th edition of India-Mongolia Joint Military Exercise NOMADIC ELEPHANT commenced on 21 September 2026 at the Foreign Training Node, Pithoragarh, Uttarakhand.
    • The exercise will continue till 03 October 2026.

    Key Highlights

    • Participants: Indian Army and Mongolian Armed Forces.
    • Strength: 45 personnel each.
    • Nature: Annual platoon-level military exercise.
    • Conducted alternately in India and Mongolia.
    • 17th edition: Held at Ulaanbaatar, Mongolia, in May-June 2025.
    • Focus: Enhancing joint military capability for Counter-Insurgency Operations.
    • Terrain: Semi-urban and mountainous terrain.
    • Operations conducted under a United Nations Mandate.

    India-Mongolia Defence Cooperation

    • Strengthens defence cooperation between India and Mongolia.
    • Enhances interoperability and joint operational capability.
    • Reinforces bilateral friendship and mutual trust.

    UPSC Prelims Trap

    • NOMADIC ELEPHANT is an India-Mongolia exercise, not an India-Nepal or India-Bhutan exercise.
    • It is conducted alternately in India and Mongolia.
    • It is a platoon-level exercise, not a tri-service exercise.
    • The 2026 edition is being held at Pithoragarh, Uttarakhand, while the previous edition was held in Ulaanbaatar, Mongolia.
  • India-New Zealand FTA

    India-New Zealand FTA

    Why in the News?

    • The India-New Zealand Free Trade Agreement (FTA) will enter into force on 20 October 2026.
    • The agreement was signed on 27 April 2026 in New Delhi after completion of internal processes in both countries.

    Key Highlights

    • 100% of India’s exports to New Zealand will become duty-free from the first day.
    • New Zealand’s tariffs of up to 10% will be eliminated on Indian exports.
    • Major beneficiary sectors:
      • Textiles and apparel
      • Leather and footwear
      • Gems and jewellery
      • Engineering goods
      • Processed foods
    • Tariff-free access to inputs such as:
      • Wooden logs
      • Coking coal
      • Metal scrap
    • Bilateral merchandise trade was around USD 1.1 billion in 2025-26.
    • Strategic Partnership announced in July 2026, with an aspirational goal of doubling bilateral goods and services trade to NZ$7 billion by 2030.

    Agriculture and Farmers

    • Sensitive Indian products excluded from tariff concessions:
      • Dairy
      • Animal meat except sheep
      • Key agricultural commodities
      • Sugar
      • Edible oils
    • New Zealand’s apples, kiwifruit and Manuka honey receive calibrated access through:
      • Tariff Rate Quotas (TRQs)
      • Minimum Import Price
      • Seasonal import windows
    • Agriculture Productivity Partnership established to improve:
      • Productivity
      • Quality
      • Farmer incomes
    • Centres of Excellence will focus on orchard management, post-harvest practices, supply chains, food safety and sustainable beekeeping.

    Services, Investment and Mobility

    • New Zealand committed to facilitate USD 20 billion investment into India.
    • Indian services companies gain access across roughly 118 sectors.
    • Most-Favoured Nation (MFN) treatment locked in across about 139 sub-sectors.
    • Mobility provisions:
      • 5,000 Temporary Employment Entry visas for skilled Indians
      • 1,000 Working Holiday visas annually for young Indians
    • Student mobility:
      • Post-study work rights up to 3 years for STEM graduates
      • Up to 4 years for doctoral scholars

    Pharmaceuticals and Medical Devices

    • New Zealand will accept inspection approvals from regulators including:
      • US FDA
      • EMA
      • UK MHRA
      • Health Canada
    • Intended to reduce regulatory delays and facilitate faster market entry for Indian pharmaceutical and medical device exporters.

    Prelims Quick Revision

    • Entry into force: 20 October 2026
    • FTA signed: 27 April 2026, New Delhi
    • India’s exports to New Zealand: 100% duty-free from day one
    • Bilateral trade target: NZ$7 billion by 2030
    • New Zealand investment commitment: USD 20 billion
    • Skilled Indian mobility quota: 5,000 visas
    • Working Holiday visas: 1,000 annually
    • Trade in 2025-26: Around USD 1.1 billion

    UPSC Prelims Trap

    • FTA does not mean unrestricted agricultural imports: sensitive Indian products such as dairy, sugar and edible oils remain excluded from tariff concessions.
    • TRQ is not the same as complete tariff elimination: apples, kiwifruit and Manuka honey receive calibrated access under specified conditions.
    • MFN treatment applies to specified services sub-sectors, not automatically to all sectors.
    • 20 October 2026 is the date of entry into force, while 27 April 2026 is the date of signing.

  • Japan Air Force chief flies in Tejas jet, hails progress in defence partnership

    Why in the News

    The Chief of the Air Staff and the Japan Air Self Defense Force (JASDF) Chief of Staff have flown together in a Light Combat Aircraft (LCA) Tejas formation at Jodhpur. The sortie took place during Veer Guardian 2026, the second edition of the India Japan bilateral air exercise, held at Air Force Station Jodhpur from 9 to 22 September. JASDF F-2A fighters have operated from Indian soil for the first time in this edition. The Indian Air Force (IAF) is flying Tejas, Su-30MKI and Rafale aircraft alongside them. The significance is that a visiting air chief flying an Indian designed fighter turns a training exercise into a statement about that aircraft’s credibility as an export. The two chiefs have separately pointed to the space domain as the next area of cooperation.

    What is Veer Guardian 2026?

    1. What it is: Veer Guardian is the bilateral air combat exercise between the Indian Air Force and the JASDF, flown between fighter squadrons of the two air forces.
    2. Editions: The first edition was held in January 2023 at air bases in Japan, and the second is being held at Air Force Station Jodhpur from 9 to 22 September 2026.
    3. A first for the JASDF: Japanese fighter aircraft have operated from Indian soil for the first time in this edition.
    4. Aircraft fielded: The IAF is participating with Tejas, Su-30MKI and Rafale fighters, and the JASDF has brought F-2A fighters.

    Why does the Tejas sortie carry weight?

    1. Who flew what: The Chief of the Air Staff led the formation in a fighter aircraft. The JASDF Chief of Staff flew in a trainer aircraft, with the Commanding Officer of the Tejas squadron as captain.
    2. The stated reading: The IAF described the sortie as a clear example of the faith and trust placed in a homegrown aircraft.
    3. Export signalling: A foreign air chief flying an Indian designed fighter is the strongest endorsement available short of a purchase order, and India has been offering the Tejas to several air forces abroad.
    4. Industrial claim: The sortie was tied to a stated expectation that India’s defence aviation industry and its research and development base will now reach higher levels.

    What does the partnership cover beyond tactical training?

    1. Beyond tactics: The JASDF assessment is that the bilateral engagement has moved past exercises aimed merely at refining tactical capabilities.
    2. Breadth of contact: Cooperation now runs across exercises, leadership interactions and subject matter exchanges.
    3. The space domain: The space domain was named as a potential area of cooperation between the two air forces.
    4. The stated frame: The partnership is described as resting on mutual respect, professional trust and a shared commitment to peace and stability, captured in the Japanese term kizuna, meaning enduring bonds forged through trust and support.

    Challenges to the India Japan defence partnership

    1. Constitutional limits on Japanese force projection: Article 9 of Japan’s Constitution and the self defence framing built on it bound how far the JASDF can commit to operations beyond Japan’s own defence. Eg. Japan’s 2022 National Security Strategy treated counterstrike capability as a new departure precisely because the earlier reading barred it.
      The Fix: Anchor cooperation in the areas the framework already permits, such as air defence training, logistics and space situational awareness.
    2. No major equipment sale has concluded: The two states signed a defence equipment and technology transfer agreement in 2015, and no major platform sale has followed it. Eg. Negotiations on the ShinMaywa US-2 amphibious aircraft ran for years without a contract.
      The Fix: Begin with subsystem and component level transfers, which clear procurement thresholds faster than a whole platform deal.
    3. Unit cost is the recurring obstacle: Japanese defence platforms carry high unit costs from small domestic production runs, which sits against Indian procurement’s price ceilings. Eg. The US-2 was quoted well above comparable options available to the Indian Navy.
      The Fix: Route any future purchase through co production in India under the Defence Acquisition Procedure, so volume brings the unit cost within the ceiling.
    4. The China factor sets the pace: Both states manage large economic relationships with China, so each calibrates how much visible defence content the partnership carries. Eg. Japan remains one of China’s largest trading partners while contesting Chinese activity around the Senkaku islands.
      The Fix: Concentrate the partnership on defensive capability areas such as maritime domain awareness and anti submarine warfare training, which carry a lower escalation cost.
    5. Indigenous platform delivery record: An export pitch for the Tejas is judged on deliveries rather than on a demonstration flight. Eg. Tejas Mk1A deliveries have run behind the contracted schedule because of engine supply delays.
      The Fix: Secure a second engine supply line and publish a delivery calendar, so a prospective export customer can price the delivery risk.

    Conclusion

    The exercise is the operational layer of a partnership that has been widening through agreements and dialogues for over a decade. What changed here is that the two air forces trained together on Indian built equipment on Indian soil, which neither had done before. The markers to watch are whether the space domain cooperation the two chiefs raised is converted into a stated work programme, and whether the next edition is scheduled in Japan on the same rotation.

    Back2Basics: Light Combat Aircraft (LCA) Tejas

    1. What it is: Tejas is a single engine, multirole light fighter, the smallest and lightest aircraft in its class in service anywhere.
    2. Who built it: It was designed by the Aeronautical Development Agency under the Defence Research and Development Organisation (DRDO) and is manufactured by Hindustan Aeronautics Limited (HAL).
    3. Induction: The IAF inducted its first Tejas squadron, No. 45 Squadron, in 2016.
    4. Current variant: The Mk1A carries an active electronically scanned array radar and an electronic warfare suite, with 83 aircraft contracted in 2021 and a further 97 ordered since.

    Matching Previous Year Question

    “‘The time has come for India and Japan to build a strong contemporary relationship, one involving global and strategic partnership that will have a great significance for Asia and the world as a whole.’ Comment.”

  • India, Vietnam agree to deepen defence ties, co-produce military equipment

    India, Vietnam agree to deepen defence ties, co-produce military equipment

    Why in the News

    India and Vietnam have agreed to deepen defence and security cooperation, including through joint production of Indian defence items. The agreement came out of the 19th India Vietnam Joint Commission Meeting on trade, economic, scientific and technological cooperation, chaired jointly by the two foreign ministers in New Delhi. The Joint Commission met for the first time in three years, and it met after the relationship had been raised to an Enhanced Comprehensive Strategic Partnership during the State Visit from Vietnam in May 2026. India’s defence supply to Vietnam has so far run through gifted platforms and lines of credit. Joint production changes what the relationship is, from the transfer of equipment to a stake in Vietnam’s own defence industry, in a region where China’s assertive behaviour in the Indo Pacific is the shared concern.

    What is the India Vietnam Enhanced Comprehensive Strategic Partnership?

    1. The tier: The highest level at which India holds bilateral ties with Vietnam, reached during the State Visit of Vietnam’s General Secretary and President in May 2026.
    2. A regional first: Vietnam is the first country in the region with which India has bilateral ties at that level.
    3. Defence as a central pillar: Defence and security cooperation sits among the central pillars of the partnership.
    4. The review mechanism: The Joint Commission Meeting on trade, economic, scientific and technological cooperation is where the full spectrum of the partnership is reviewed by the two foreign ministers.

    How has India’s defence supply to Vietnam been built so far?

    1. A gifted platform: India gifted the indigenously built missile corvette INS Kirpan to Vietnam in July 2023.
    2. Credit financed boats: Twelve high speed guard boats built by Larsen & Toubro were handed over in June 2022, under a bilateral line of credit of USD 100 million.
    3. Further lines of credit: Two more lines of credit, of USD 120 million and USD 180 million, were signed between the Exim Bank of India and Vietnam’s Finance Ministry in July 2024 and are being executed now.
    4. Beyond equipment: Engagement has diversified into wider military to military dialogue, capacity building and training across all arms of the forces.

    What did the two sides identify beyond defence?

    1. Trade and supply chains: Expanding trade, investments and mutually beneficial supply chains.
    2. Market access: Access for Indian marine and agricultural products and pharmaceuticals.
    3. Connectivity: Financial, port and air connectivity between the two countries.
    4. New sectors: Opportunities in nuclear energy and the space sector.
    5. Standards and heritage: Cooperation on standards for seafarers, and on heritage conservation.
    6. People to people ties: Capacity building and people to people ties, with the growing popularity of yoga in Vietnam noted. Next year will be observed as the Year of India Vietnam Friendship, marking 55 years of diplomatic ties.

    Where does Vietnam sit in India’s regional frameworks?

    1. Act East Policy: Vietnam is a key pillar of India’s Act East Policy, a relationship rooted in deep civilisational linkages.
    2. Vision MAHASAGAR: Vietnam is a key partner in Vision MAHASAGAR, meaning Mutual and Holistic Advancement for Security and Growth Across Regions, which is India’s stated outlook for the Indo Pacific.
    3. The ASEAN track: Vietnam is an important partner within India’s Comprehensive Strategic Partnership with the Association of Southeast Asian Nations (ASEAN).
    4. Maritime cooperation: Vietnam’s engagement under India’s Indo Pacific Oceans Initiative (IPOI) was welcomed at the meeting.
    5. The strategic backdrop: The deepening of defence ties was framed against China’s assertive behaviour in the Indo Pacific region.

    Challenges to India Vietnam defence joint production

    1. A Russian origin inventory: Vietnam’s forces run largely on Russian platforms, which limits what Indian systems can be integrated into without redesign. Eg. Vietnam’s Kilo class submarines and Su 30 combat aircraft are of Russian origin.
      The Fix: Concentrate joint production on segments where Indian industry already services Russian origin fleets, such as spares, sensors and patrol craft.
    2. Vietnam’s balancing with China: Vietnam manages an economic relationship with China that constrains how visible its defence alignment can be. Eg. China remains Vietnam’s largest trading partner.
      The Fix: Keep the programme industrial and commercial in framing, delivered through shipyards and licensed production rather than through basing or joint patrols.
    3. Slow conversion of credit into deliveries: Indian lines of credit take years to become contracted orders, because procurement approvals and yard capacity lag the signing. Eg. The defence line of credit of USD 500 million extended to Vietnam in 2016 took years to translate into orders.
      The Fix: Attach dated milestones and a named executing yard to each tranche of an existing line of credit.
    4. Competition on terms, not goodwill: Vietnam has diversified its arms procurement toward suppliers offering technology transfer, so India bids against others on commercial terms. Eg. Israeli suppliers have provided Vietnam with air defence systems and small arms production lines.
      The Fix: Build transfer of technology and local content commitments into the joint production package instead of offering finished units.

    Conclusion

    The relationship has moved past the stage at which India’s contribution can be counted in platforms handed over. Joint production asks India to be a supplier that stays, through spares, training and yard capacity inside Vietnam. The marker to watch is whether the two sides name a first item and a manufacturer, rather than announcing a further round of credit.

    Back2Basics: Indo Pacific Oceans Initiative

    1. Announced by India at the East Asia Summit in Bangkok in November 2019.
    2. An open, non treaty based arrangement for cooperation on maritime security and the sustainable use of ocean resources.
    3. Organised around seven pillars, including maritime security, maritime ecology, maritime resources, disaster risk reduction and management, and trade connectivity and maritime transport.
    4. Individual pillars are led by partner countries rather than directed by a central secretariat.

    Matching Previous Year Question

    “[2020, GS2, 15 marks] What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.”

  • Defence to space, trade to tech: India, Philippines to deepen ties

    Why in the News

    A year after New Delhi and Manila elevated their relationship to a strategic partnership, the Prime Minister and the President of the Philippines agreed to deepen cooperation across defence and security, trade and investment, space, railway infrastructure, fintech and education. The Philippines also decided to join the India led Coalition for Disaster Resilient Infrastructure (CDRI). The two leaders met on the sidelines of the 18th BRICS Summit in New Delhi. The Philippines President attended the Summit as the current chair of the Association of Southeast Asian Nations (ASEAN), which places the meeting inside India’s Act East policy and its Comprehensive Strategic Partnership with ASEAN. Both sides are driven by shared concerns over China’s territorial assertiveness in the Indo Pacific and the South China Sea, and the engagement is therefore being built on defence supply and maritime law at the same time as on trade and technology.

    What does the partnership now cover?

    1. The declared breadth of cooperation: The two sides agreed to deepen collaboration across defence and security, trade and investment, space, railway infrastructure, fintech, education, tourism, science and technology, innovation and people to people ties.
    2. The 2025-29 defence roadmap: India and the Philippines adopted a 2025-29 roadmap to expand military training, staff talks and maritime security cooperation in the Indo Pacific.
    3. Philippine accession to the CDRI: The Philippines has decided to join the CDRI, which brings a highly disaster exposed archipelago into a coalition India created.
    4. The ASEAN chairship as the regional frame: The visit’s significance rests on the Philippines holding the ASEAN chair while India runs a Comprehensive Strategic Partnership with the grouping.

    What anchors the defence relationship?

    1. The BrahMos supply deal of 2022: The 2022 deal to supply BrahMos supersonic cruise missiles to the Philippine Navy marked the major milestone in security ties.
    2. Tri service staff talks: Both countries hold regular staff talks for their Army, Navy and Air Force to improve joint security cooperation.
    3. The roadmap’s named focus areas: The roadmap’s focus is military training, staff talks and maritime security, which are the areas a supply relationship has to be converted into.

    Where does the economic relationship stand?

    1. Bilateral trade volume: Bilateral trade has grown past $3 billion.
    2. Drivers of the trade growth: The growth has been driven by Indian pharmaceutical exports, information technology services and agricultural cooperation.
    3. Space, railways and fintech as new areas: Space, railway infrastructure and fintech have been named as expansion areas, which are sectors with no existing trade base to build on.

    Why does the South China Sea frame the engagement?

    1. Shared assessment of Chinese assertiveness: Both sides are driven by shared concerns over China’s aggressive territorial assertiveness in the Indo Pacific and the South China Sea.
    2. India’s stated legal position: India has consistently supported a rules based maritime order in the South China Sea, based on international law and the United Nations Convention on the Law of the Sea (UNCLOS), the treaty that defines maritime zones and the rights of states within them.
    3. Value of the legal position to Manila: A legal position held by a large external power supports a claimant state that cannot match China’s naval weight on its own.

    Challenges to the India Philippines strategic partnership

    1. A defence supply relationship is narrow and slow to widen: One missile contract does not by itself create a standing industrial relationship, and follow on orders depend on the buyer’s budget cycle rather than on political intent. Eg. The BrahMos supply arrangement dates from 2022 and remains the single flagship item in the defence relationship.
      The Fix: Move from outright sale to a maintenance, repair and overhaul facility in the Philippines, so the relationship generates recurring work rather than a single delivery.
    2. Trade is small relative to both economies: A bilateral figure near $3 billion is a fraction of what either country trades with China, which limits the economic leverage either can bring. Eg. Indian pharmaceutical exports and information technology services carry most of the existing trade, and neither is a large employer in the Philippines.
      The Fix: Open negotiations on a preferential trade arrangement within the ASEAN framework, so tariff lines rather than announcements decide the growth rate.
    3. ASEAN itself does not hold a common line on the South China Sea: The grouping works by consensus, so a member with close economic ties to Beijing can block a collective position. Eg. The Code of Conduct negotiations between ASEAN and China have run since 2002 without a binding text.
      The Fix: Build the maritime agenda through bilateral and minilateral arrangements with individual claimant states, rather than waiting on a grouping wide position.
    4. Escalation risk sits in the same waters as the cooperation: Maritime security cooperation with a claimant state can be read by China as taking sides in a live dispute, which raises the cost of the relationship. Eg. Chinese and Philippine vessels have repeatedly come into contact around contested shoals in the South China Sea.
      The Fix: Frame cooperation as capacity building for coast guard and humanitarian response, so the activity is defensible in law and difficult to characterise as an alignment.
    5. Disaster exposure is a standing constraint on both economies: An archipelago that absorbs several typhoons a year loses infrastructure faster than it can add it, which limits the returns on any investment commitment. Eg. The Philippines is among the most disaster exposed countries in the world, which is why its accession to the CDRI matters.
      The Fix: Tie Indian infrastructure financing in the Philippines to resilience standards set through the CDRI, so the assets built survive the hazard they are built into.

    Conclusion

    The partnership is a year old and has moved from a single defence sale to a dated roadmap, a disaster resilience coalition and a list of new sectors. What it does not yet have is volume, since a trade relationship of about $3 billion and one missile contract cannot carry the strategic weight both sides describe. The measurable markers over the next year are whether the 2025-29 roadmap produces a second defence contract and whether India converts the Philippines’ ASEAN chairship into movement on the India ASEAN trade agreement review.

    Back2Basics: Coalition for Disaster Resilient Infrastructure

    1. Coalition membership and purpose: An international partnership of national governments, United Nations agencies, multilateral development banks, the private sector and academic institutions, working to make infrastructure systems resilient to disaster and climate risk.
    2. Launch at the 2019 United Nations Climate Action Summit: It was launched by India at the United Nations Climate Action Summit in September 2019.
    3. Secretariat location: Its secretariat is in New Delhi.
    4. The Infrastructure for Resilient Island States programme: Its flagship programme is the Infrastructure for Resilient Island States initiative, which supports small island developing states in building infrastructure that can withstand extreme events.

    Matching Previous Year Question

    “[2020, GS2, 15 marks] What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.”

  • India and Morocco hold inaugural Joint Defence Committee meeting

    Why in News

    1. First committee meeting: The inaugural Joint Defence Committee (JDC) meeting between India and Morocco was held in New Delhi on 8 September 2026.

    Core facts

    1. Administering body: The Ministry of Defence hosted the meeting.
    2. Co-chairs by position: India’s Joint Secretary in the Ministry of Defence and Morocco’s 2nd Bureau Chief co-chaired the session.
    3. Domains discussed: training and education, peacekeeping operations, military exercises, medical cooperation, cyber defence and defence industries.
    4. Industrial cooperation: Both sides agreed to explore joint production, joint ventures, technology collaboration, and maintenance and sustainment.
    5. Visit dates: The Moroccan delegation visited India from 7 to 10 September 2026.
    6. Institutional origin: The JDC was created by a defence cooperation Memorandum of Understanding (MoU) signed in September 2025.
    7. Milestone ahead: The two countries mark the 70th anniversary of diplomatic ties in 2027.

    Static Context

    1. Morocco is a North African kingdom on the Atlantic and Mediterranean coasts. It borders the Strait of Gibraltar.
    2. A Joint Defence Committee is a standing bilateral mechanism. It institutionalises regular defence dialogue between two states.
    3. India and Morocco established diplomatic relations in 1957.

    Prelims angle

    1. Location of Morocco: North West Africa, near the Strait of Gibraltar.
    2. Mechanism: The India and Morocco Joint Defence Committee as a bilateral defence institution.

    Mains angle

    1. GS2, international relations: A question can assess India’s deepening defence diplomacy with African states and its strategic value in the western Indian Ocean and Atlantic approaches.

    Matching Previous Year Question

    “No direct PYQ traced in the provided files. Closest Microtheme: Bilateral Relations (International Relations).”

  • [9th September 2026] The Hindu OpED: India-Japan defence cooperation breaks new ground

    [9th September 2026] The Hindu OpED: India-Japan defence cooperation breaks new ground

    Question (2019, GS2 – 10 Marks): “‘The time has come for India and Japan to build a strong contemporary relationship, one involving global and strategic partnership that will have a great significance for Asia and the world as a whole.’ Comment.
    Linkage: This question directly evaluates the transition of India-Japan ties into a robust “Special Strategic and Global Partnership”. It challenges candidates to analyze whether political mechanisms (like the 2+2 Ministerial Dialogues and institutional agreements) are producing meaningful regional and global security outcomes

    Mentor comment

    India and Japan have announced a new maritime cooperation framework, joint work on naval shipbuilding and design, and early implementation of the transfer of Japan’s UNICORN integrated communications antenna system. The agreements came out of a visit to India by Japan’s Defence Minister in August 2026. They follow more than a decade of institution building through annual dialogues, the 2+2 mechanism that brings the two countries’ foreign and defence ministers to a single table, joint exercises, logistics arrangements and defence technology discussions. That machinery has not produced matching operational or industrial output. The contest is whether a relationship rich in declarations of strategic convergence can now deliver usable capability.

    Why do further declarations of convergence add little?

    1. The convergence is already established: Both countries share concerns about coercive attempts to alter the status quo, the security of the maritime commons and the growing militarisation of the Indo-Pacific.
    2. Declarations now carry diminishing returns: The partnership has been more developed institutionally than operationally, so another statement of shared assessment changes nothing about what the two forces can do together.
    3. The test is joint operating capacity: The unmet task is converting shared assessments into arrangements that improve the two countries’ ability to operate together.

    What does the new maritime framework try to fix?

    1. Information sharing is the core: The framework places its emphasis on information sharing and Maritime Domain Awareness, the continuous picture of shipping, naval movement and activity in a maritime area assembled from radar, satellite, aircraft and vessel tracking inputs.
    2. The two sit at opposite ends of one theatre: Japan’s immediate security concerns are concentrated in the East China Sea and the waters surrounding Taiwan. India’s geographical position gives it a central role in the Indian Ocean maritime space.
    3. A single picture across two spaces: A closer information sharing architecture would build a more continuous strategic picture across these interconnected maritime spaces.
    4. The stated objective is operational: The aim is greater awareness, interoperability and operational familiarity between the two major maritime powers.

    What is being attempted in defence industry?

    1. Joint work on naval shipbuilding: The two sides are exploring joint development in naval shipbuilding and design, combining Japanese technological expertise with Indian production capabilities.
    2. Japanese use of Indian capacity: There was agreement to deepen discussions on Japan’s use of Indian production capabilities under the ‘Make in India’ framework.
    3. Reciprocal ship repair: The two sides agreed to move towards reciprocal arrangements for ship repair facilities.
    4. This is the weakest leg of the relationship: Defence industrial cooperation has consistently lagged behind strategic and political convergence.

    Why does the UNICORN transfer matter, and why is it not new?

    1. What the system is: UNICORN is an integrated communications antenna system that houses a warship’s antennas within a single composite mast, which reduces the ship’s radar signature.
    2. Described as a first, but already under way: Japan’s Ministry of Defence describes UNICORN as the first defence equipment transfer project between the two countries. A memorandum of understanding for the co-development of UNICORN masts, involving Bharat Electronics Limited, was signed in November 2024.
    3. The meeting advanced implementation: The August meeting represented a further step towards implementation rather than the initiation of a new project.
    4. The record it has to beat: New Delhi and Tokyo have struggled to convert their 2015 agreement on defence equipment and technology transfer into concrete outcomes.
    5. Research agencies are being linked: There are plans to deepen cooperation between India’s Defence Research and Development Organisation (DRDO) and Japan’s Acquisition, Technology and Logistics Agency (ATLA), the Japanese Defence Ministry body that runs procurement and technology development.
    6. Credibility now rests on delivery: The commitment to early implementation reflects a recognition that credibility depends on delivering projects rather than identifying possibilities.

    What do the exercises signal?

    1. Japanese fighters are flying in India: Japan’s fighter aircraft are participating in the Veer Guardian exercise in India from 9 to 22 September 2026, for the first time.
    2. Greater complexity by agreement: The two sides agreed to increase the complexity of bilateral exercises and to integrate unmanned systems.
    3. Short notice activation: They agreed to explore exercises organised at short notice, which tests readiness rather than choreography.
    4. Beyond the navies: They discussed cooperation between special operations forces, and with India’s future integrated theatre commands.

    Why does the western seaboard visit matter?

    1. The itinerary moved west: Before travelling to New Delhi, Japan’s Defence Minister visited the Western Naval Command in Mumbai and INS Chennai.
    2. Past the usual geography: The visit extended beyond the familiar strategic geography of the Bay of Bengal and the Strait of Malacca.
    3. What the western seaboard carries: It is central to India’s wider maritime interests, encompassing critical sea lanes, energy flows and India’s growing responsibilities in the western Indian Ocean.

    Is this a China-centric partnership?

    1. The message was sent without the name: The joint statement reiterated opposition to unilateral actions that impede freedom of navigation or seek to alter the status quo through force or coercion. Neither country named China.
    2. The value lies in going past China: The significance of India-Japan cooperation lies in its ability to move beyond a China-centric agenda.
    3. A wider agenda is already forming: Maritime security, resilient supply chains, defence industrial capacity, logistics and third country cooperation are becoming components of a wider regional security architecture.
    4. The civil side moved first: The July 2026 Annual Summit expanded cooperation across economic security, critical technologies and resilient supply chains, and the defence engagement followed it.

    Challenges

    1. Transfer agreements have not produced serial equipment flows: Named projects have repeatedly stalled between agreement and production. Eg. Negotiations on the US-2 amphibious search and rescue aircraft ran for years without producing a contract.
    2. Japan’s export control framework limits what can move: Japan’s post-war pacifist constitutional settlement and its restrictive export rules keep advanced and dual-use defence technology outside most transfer categories. Eg. The Three Principles on Transfer of Defence Equipment and Technology, adopted in 2014, replaced a near-total export ban but still confine transfers to defined categories.
    3. Habitual joint operation is still shallow: Interoperability is built by repetition, and the bilateral exercise tempo remains thin against the range of services involved. Eg. Japan first joined the Malabar naval exercise in 2007 and became a permanent participant only in 2015.
    4. Defence industrial cooperation remains below potential: Defence industrial cooperation has consistently lagged behind strategic and political convergence.
    5. Strategic alignment is not identical: Japan’s Indo-Pacific approach is closely coordinated with the United States and the G7. India retains strategic autonomy and stays in groupings Japan is not part of. Eg. India’s participation in the Vostok exercises in Russia sits awkwardly with Tokyo’s position.

    Way Forward

    1. Convert agreements into deliverables: Attach dated production milestones and named Indian production partners to defence transfers so that agreements move from signing to implementation.
    2. Work within Japan’s export framework: Concentrate joint projects on permitted categories such as sensors, communications, surveillance and rescue platforms.
    3. Build sustained interoperability: Establish a standing annual calendar covering naval, army and air exercises, with a short-notice activation slot.
    4. Deepen defence industrial cooperation: Move from individual technology transfers towards joint development, co-production and reciprocal maintenance, combining Japanese technological expertise with Indian manufacturing capacity.
    5. Strengthen maritime information sharing: Develop a more integrated Maritime Domain Awareness architecture and improve information sharing between the two countries’ maritime forces.
    6. Institutionalise strategic consultation: Establish a standing consultation mechanism on third-country engagements so that differences arising from India’s strategic autonomy do not become unexpected diplomatic surprises.
    7. Measure the partnership by outcomes: The ultimate benchmark should be delivered equipment, operational capability and functioning industrial partnerships, rather than another round of declarations.

    Back2Basic: About India-Japan Relations

    1. A Special Strategic and Global Partnership: The relationship was upgraded to this status in 2014, covering political, economic and security cooperation.
    2. Indo-Pacific convergence: India’s Act East Policy and its Indo-Pacific Oceans Initiative (IPOI) align with Japan’s Free and Open Indo-Pacific (FOIP) vision, and the two also work together within the Quad.
    3. Economic weight: Japan is the fifth largest investor in the Indian economy, with 6.6 per cent of India’s total foreign direct investment inflows. Bilateral trade stood at USD 25.17 billion in 2024-25.
    4. Development footprint: The Mumbai-Ahmedabad High Speed Rail project is the flagship connectivity work, and Japan is the only country undertaking development work in India’s Northeast, through the India-Japan Act East Forum.

    Initiatives and Agreements in India-Japan Cooperation

    1. Comprehensive Economic Partnership Agreement (CEPA), 2011: It covers trade in goods and services, investment and intellectual property rights.
    2. India-Japan Industrial Competitiveness Partnership, 2021: It works on India’s manufacturing base and on supply chain resilience.
    3. Acquisition and Cross-Servicing Agreement, 2020: It allows reciprocal provision of supplies and services between the two countries’ defence forces.
    4. Agreement for Cooperation in the Peaceful Uses of Nuclear Energy, 2017: It provides the legal basis for Japanese civil nuclear cooperation with India.
    5. Supply Chain Resilience Initiative: Run with Australia, it seeks to diversify supply chains away from dependence on a single country.
    6. Asia-Africa Growth Corridor: It aims to link East Asia, Southeast Asia and South Asia more closely with Africa.

    Key Facts about India-Japan Relations

    1. Joint exercises: JIMEX is the bilateral naval exercise and Dharma Guardian the army exercise. Both countries also take part in the Malabar and Milan multilateral exercises.
    2. The G4 grouping: India and Japan work with Brazil and Germany in the G4 to press for expansion of the United Nations Security Council.
    3. India Vision 2025: It frames the development of India’s Northeast as the convergence point between the Act East Policy and Japan’s Indo-Pacific vision.

  • India’s carbon credit scheme receives U.K. official recognition

    Why in the News

    The United Kingdom has recognised India’s Carbon Credit Trading Scheme (CCTS) as a qualifying overseas carbon pricing scheme for the purpose of carbon price relief. The recognition was conveyed by His Majesty’s Treasury to the Bureau of Energy Efficiency (BEE) under the Ministry of Power. The scheme has been placed on the United Kingdom’s published indicative list of overseas carbon pricing schemes assessed as meeting the qualifying criteria under the Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026. A carbon border adjustment mechanism (CBAM) charges an imported good the gap between the carbon price paid where it was made and the price the importing country’s own producers pay. The recognition therefore lets a carbon price already paid in India be set off, lowering the effective CBAM liability on Indian goods. The relief is calculated on the price a tonne of carbon actually fetches in India, so a domestic market still in its early compliance cycles decides how much of the British levy an exporter escapes.

    What is the Carbon Credit Trading Scheme?

    1. Statutory basis: The scheme rests on the Energy Conservation Act, 2001, as amended by the Energy Conservation (Amendment) Act, 2022. It is administered by the Bureau of Energy Efficiency under the Ministry of Power.
    2. Compliance mechanism: Obligated entities in notified industrial sectors receive greenhouse gas emission intensity targets, stated as emissions per unit of output. An entity that beats its target earns carbon credit certificates, and one that misses it must buy them.
    3. Offset mechanism: An entity outside the compliance list can register an emission reduction project voluntarily. It earns certificates once the reduction is verified.
    4. Trading venue: Certificates are traded on the power exchanges. That trade is what produces a domestic price for a tonne of carbon dioxide equivalent.

    How does the recognition change the cost of exporting to the United Kingdom?

    1. Carbon price relief: The British levy is charged on the embedded emissions of an imported good at a British carbon rate. A carbon price already paid in the country of production is deducted from that rate where the paying scheme qualifies.
    2. The indicative list is the administrative gate: Placement on the list is what makes the deduction available to goods produced under the scheme. The list is indicative, so it fixes eligibility rather than the final rate an exporter pays.
    3. Exposed sectors: The United Kingdom’s mechanism applies from 1 January 2027 to imports of aluminium, cement, fertiliser, hydrogen, iron and steel. Indian steel and aluminium shipments are the largest exposures within that set.
    4. The obligation on the exporter survives: Recognition attaches to the scheme, not to any single firm. Each consignment must still be accompanied by emissions data for the goods concerned.

    Challenges to the Carbon Credit Trading Scheme

    1. A weak price yields a weak set off: The deduction is worth only what a carbon credit certificate sells for in India, so a low clearing price transfers most of the levy to the British exchequer anyway. Eg. Energy saving certificates under the Perform, Achieve and Trade scheme, the country’s earlier market based instrument, cleared at prices too low to change investment behaviour.
      The Fix: Set a floor price for compliance certificates, so the market cannot clear below the level at which abatement becomes worth financing.
    2. Target setting is based on intensity, not absolute emissions: An obligated entity meets its target by cutting emissions per tonne of output while expanding total output, so national emissions can rise inside a compliant market. Eg. Cement plants raise clinker substitution to cut intensity while adding fresh capacity.
      The Fix: Convert the compliance mechanism to a declining absolute cap once the first two cycles have established a reliable emissions baseline.
    3. Narrow coverage of the emitting base: The compliance mechanism reaches only large notified industrial sectors, leaving out transport, buildings and the bulk of smaller industrial units. Eg. Foundries and re-rolling mills in industrial clusters sit outside the obligated list despite being coal fired.
      The Fix: Extend the offset mechanism with sector specific methodologies for small units, so a cluster level project can be registered rather than a single plant.
    4. Measurement and verification capacity is thin: Credits are only as sound as the emissions data behind them, and accredited carbon verifiers in India are few relative to the number of obligated entities. Eg. Voluntary carbon markets globally have been discredited by projects whose claimed reductions could not be reproduced on audit.
      The Fix: Accredit and licence verification agencies ahead of the compliance deadline, with random re-audit of a fixed share of issued certificates.
    5. Overlap with earlier instruments confuses the signal: Renewable energy certificates and energy saving certificates already price parts of the same abatement, so a firm can face several partially overlapping obligations. Eg. A cement plant may hold energy saving certificates for efficiency gains that also lower its greenhouse gas emission intensity.
      The Fix: Publish a single conversion and transition schedule that folds legacy certificates into the carbon credit market on a stated date.

    Conclusion

    Recognition removes a trade barrier only to the extent that the domestic carbon market becomes real. The set off is a pass through of a price India charges itself, so the instrument that protects exporters is the same one that has to discipline them. What to watch is the clearing price at the first compliance cycle auctions and whether the European Union grants an equivalent recognition, since the European market absorbs a far larger share of Indian steel and aluminium than the British one.

    Back2Basics: Bureau of Energy Efficiency

    1. Statutory body: The Bureau was set up in 2002 under the Energy Conservation Act, 2001, and functions under the Ministry of Power.
    2. Mandate: It is charged with reducing the energy intensity of the Indian economy, meaning energy consumed per unit of gross domestic product.
    3. Standards and labelling: It runs the star rating programme for appliances and the Energy Conservation Building Code for commercial buildings.
    4. Market instruments: It designed and administers the Perform, Achieve and Trade scheme and now the carbon credit market, making it the nodal agency for India’s carbon pricing architecture.

    “[2023] Consider the following statements :

    Statement-I: Carbon markets are likely to be one of the most widespread tools in the fight against climate change.

    Statement-II : Carbon markets transfer resources from the private sector to the State.

    Which one of the following is correct in respect of the above statements?

    (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

    (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

    (c) Statement-I is correct but Statement-II is incorrect

    (d) Statement-I is incorrect but Statement-II is correct