1. “Strategic trade agreements are becoming key instruments of India’s economic diplomacy.” Discuss in the context of recent India-U.S. trade developments.
| Syllabus: General Studies – II : Bilateral Agreements involving India and/or affecting India’s interests. |
IN NEWS: The U.S. trade deal, gains from economic diplomacy
Economic diplomacy refers to the use of economic tools such as trade agreements, investment partnerships and technology cooperation to advance national strategic interests. In recent years, India has increasingly used strategic trade agreements to enhance market access, strengthen supply chains and improve geopolitical partnerships. The evolving India-U.S. trade engagement reflects this shift.
Strategic Trade Agreements as Tools of Economic Diplomacy
1. Enhancing Market Access and Export Competitiveness
- Recent India-U.S. tariff adjustments lowering duties on Indian goods improve access to one of the world’s largest import markets.
- Export sectors such as apparel, gems and jewellery, marine products, footwear and processed foods gain price competitiveness.
- Provides policy certainty and encourages capacity expansion.
2. Strengthening Global Supply Chain Integration
- Trade cooperation supports diversification away from single-country dependence.
- Helps India integrate into trusted and resilient supply chains aligned with Indo-Pacific strategies.
- Complements initiatives like the Quad and supply-chain resilience frameworks.
3. Promoting Strategic Economic Partnerships
- Trade agreements now go beyond tariffs to include Regulatory cooperation, Digital trade, Clean energy collaboration and Technology partnerships.
- Strengthens bilateral trust and long-term economic cooperation.
4. Supporting Domestic Economic Goals
- Aligns with “Make in India” and ambition to become a global manufacturing hub.
- Encourages foreign investment and joint ventures.
- Boosts employment in labour-intensive sectors.
5. Broader Economic Diplomacy Strategy
- India’s agreements with the EU, UK, EFTA, Australia, UAE and Oman indicate a diversified trade architecture.
- Reduces overdependence on any single market.
- Enhances India’s bargaining power in global trade negotiations.
Challenges and Concerns
- Risk of domestic industry exposure to external competition.
- Non-tariff barriers and regulatory differences may persist.
- Need to balance trade liberalisation with strategic autonomy.
The India-U.S. trade developments demonstrate how strategic trade agreements have evolved into critical instruments of India’s economic diplomacy. By combining economic gains with geopolitical alignment, such agreements help India enhance competitiveness, secure supply chains and strengthen its role as a key player in the global economic order.
| PYQ REFERENCE (2013) Q. Economic ties between India and Japan while growing in the recent years are still far below their potential. Elucidate the policy constraints which are inhibiting this growth. |
2. Critically evaluate the role of the Members of Parliament Local Area Development Scheme (MPLADS) in strengthening grassroots development and participatory governance.
| Syllabus: General Studies – II : Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation. |
IN NEWS: There is no case for scrapping MPLADS funds
The Members of Parliament Local Area Development Scheme (MPLADS), launched in 1993, is a Central Sector Scheme that allows MPs to recommend developmental works in their constituencies to create durable community assets. With an annual allocation of ₹5 crore per MP, the scheme aims to address local development needs and strengthen grassroots governance through targeted interventions.
Role of MPLADS in Strengthening Grassroots Development
1. Addressing Local Development Gaps
- MPLADS enables MPs to identify specific local needs often overlooked in large-scale schemes.
- Supports construction of roads, school buildings, community halls, drinking water facilities and health infrastructure.
Example: Rajya Sabha MP Sant Balbir Singh Seechewal utilised MPLADS funds to address water scarcity in Punjab villages.
2. Flexibility and Quick Response
- Unlike rigid centrally sponsored schemes, MPLADS allows flexible allocation based on constituency priorities.
- Funds can be deployed for urgent community infrastructure requirements.
3. Enhancing Participatory Governance
- MPs interact with local communities, panchayats and district authorities to identify projects.
- Encourages bottom-up development planning through citizen feedback.
Example: Geotagged projects by MP Iqra Choudhary increased transparency and citizen monitoring.
4. Strengthening Last-Mile Delivery
- Helps bridge implementation gaps where state or local governments face resource constraints.
- Complements flagship schemes by providing additional funds.
5. Positive Accountability:
- Promotes accountability through publicly accessible MPLADS dashboards.
- Encourages competition among MPs to improve developmental performance.
Example: Abhishek Banerjee (West Bengal) completed a high number of MPLADS projects, enhancing local infrastructure.
Criticisms and Challenges
1. Separation of Powers Concerns
- Critics argue MPLADS blurs the line between legislative and executive functions since MPs recommend development works.
2. Risk of Political Patronage
- Allegations of politically motivated allocations or favouritism.
- Possibility of funds being used for political visibility rather than priority needs.
3. Implementation and Monitoring Issues
- Delays in project completion.
- Uneven utilisation across MPs and constituencies.
- Bureaucratic bottlenecks at district administration level.
4. Federalism Concerns
- Allocation of funds outside constituencies or states raises questions about local accountability.
Way Forward
- Strengthen digital monitoring and geotagging for transparency.
- Independent third-party audits.
- Capacity-building workshops for MPs on effective utilisation.
- Greater involvement of local bodies (PRIs/ULBs) in project selection.
MPLADS has played a significant role in addressing micro-level developmental needs and fostering participatory governance by enabling locally responsive interventions. However, governance concerns regarding accountability, transparency and institutional roles require reforms rather than discontinuation. Strengthening monitoring mechanisms and participatory processes can enhance the scheme’s effectiveness as a tool for grassroots development.
| PYQ REFERENCE (2022) Q. Reforming the government delivery system through the Direct Benefit Transfer Scheme is a progressive step, but it has its limitations too. Comment. |