UPSC CARE Mains Practice 23th December 2025
Mains Practice Questions for the Day
- India’s engagement with Africa is entering a new phase shaped by economic imperatives and global uncertainties. Examine the strategy needed to unlock the full potential of India–Africa economic ties. (GS -2: Bilateral, regional, and global groupings/agreements involving India)
- India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in December 2025. Discuss the key features of the India–Oman CEPA and analyse its significance for India’s trade diversification, services sector expansion, labour mobility, and integration with the Gulf Cooperation Council (GCC) region. (GS Paper II – India’s Foreign Policy, Bilateral Relations, Gulf Cooperation Council (GCC))
India’s engagement with Africa is entering a new phase shaped by economic imperatives and global uncertainties. Examine the strategy needed to unlock the full potential of India–Africa economic ties. (GS -2: Bilateral, regional, and global groupings/agreements involving India)
Introduction:
India–Africa relations, historically anchored in shared colonial experiences and political solidarity, are increasingly being driven by economic considerations. In an era marked by global supply-chain disruptions, rising protectionism in Western markets, and the emergence of a multipolar world order, Africa has acquired renewed strategic importance in India’s foreign economic policy.
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Changing Global and Economic Context
Nearly 40% of India’s exports are directed towards the US and EU, exposing India to risks of slowdown and policy unpredictability. Africa, with its expanding consumer base, rapid urbanisation, and industrial potential, offers India a crucial opportunity for export diversification and long-term growth. Although India is Africa’s fourth-largest trading partner with trade nearing $100 billion, it lags far behind China, whose trade exceeds $200 billion, dominated by high-value industrial goods.
Five-Pillar Strategy to Deepen India–Africa Economic Ties
- Reducing Trade Barriers:
India must pursue Preferential Trade Agreements and deepen engagement with the African Continental Free Trade Area (AfCFTA) to gain access to a unified continental market. - Value-Added Manufacturing & Joint Ventures:
Transitioning from low-value exports to manufacturing partnerships and joint ventures in Africa can integrate Indian firms into global value chains while leveraging Africa’s tariff advantages. - Scaling Up Trade Finance with MSME Focus:
Expanding Lines of Credit, promoting local-currency trade, and creating risk-mitigation mechanisms are essential to enable MSMEs to access African markets. - Infrastructure, Logistics & Connectivity:
Investments in ports, hinterland connectivity, and India–Africa maritime corridors can significantly reduce logistics costs and enhance trade competitiveness. - Services Trade & Digital Cooperation:
India should leverage its strengths in IT, healthcare, education, and skill development, as services trade can generate high-value exports and stimulate goods trade.
Role of Investment and the Public Sector
Indian public sector enterprises can play a catalytic role in mining, critical minerals, renewable energy, and infrastructure, de-risking African markets and crowding in private investment.
Conclusion:
To unlock Africa’s full potential, India must move beyond transactional trade towards long-term, sustainable partnerships. Strategic execution of the five-pillar approach, backed by institutional coordination and public-sector leadership, can position Africa at the core of India’s global economic ambitions.
India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in December 2025. Discuss the key features of the India–Oman CEPA and analyse its significance for India’s trade diversification, services sector expansion, labour mobility, and integration with the Gulf Cooperation Council (GCC) region. (GS Paper II – India’s Foreign Policy, Bilateral Relations, Gulf Cooperation Council (GCC))
Introduction:
India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in December 2025, making it India’s second such agreement with a Gulf Cooperation Council (GCC) country after the UAE. The CEPA reflects India’s shift towards new-generation FTAs that emphasise services, mobility, investment, and supply-chain resilience in addition to tariff reduction.
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Key Features of the India–Oman CEPA
1. Tariff Liberalisation
- Oman provides duty-free access on 98.08% of tariff lines, covering about 99% of India’s exports.
- India liberalises 77.79% of tariff lines, covering nearly 95% of imports from Oman.
- Sensitive items such as dairy, tea, coffee, rubber, tobacco, gold, silver, jewellery, and footwear are excluded.
2. Services and Investment Provisions
- Wide commitments in IT, professional services, R&D, education, health, and audio-visual services.
- Provision for 100% FDI by Indian companies in major services sectors in Oman.
3. Enhanced Labour Mobility (Mode 4)
- Quota for Intra-Corporate Transferees increased from 20% to 50%.
- Stay for Contractual Service Suppliers extended from 90 days to two years, with scope for extension.
4. Support to Labour-Intensive Sectors
- Full tariff elimination for sectors such as textiles, gems and jewellery, leather, engineering goods, pharmaceuticals, medical devices, and automobiles.
Significance of the CEPA
1. Trade Diversification
- Reduces India’s dependence on traditional export markets.
- Strengthens India’s presence in West Asia and energy-linked trade corridors.
2. Expansion of the Services Sector
- Enhances access for Indian service providers in a market where India has comparative advantage.
- Promotes high-value employment and services-led growth.
3. Improved Labour Mobility
- Facilitates movement of skilled Indian professionals, boosting remittances and human capital exports.
- Reinforces India’s role as a global supplier of skilled manpower.
4. Gateway to the GCC Region
- Positions Oman as a strategic entry point to the wider GCC, Africa, Central Asia, and Eastern Europe.
- Complements India’s broader economic diplomacy in the Gulf.
5. MSMEs and Inclusive Growth
- Improved market access for MSMEs, artisans, and women-led enterprises.
- Encourages employment generation in labour-intensive sectors.
Conclusion:
The India–Oman CEPA is a balanced and forward-looking trade agreement that goes beyond tariff liberalisation to focus on services, labour mobility, and investment. By promoting trade diversification, strengthening services exports, facilitating skilled mobility, and deepening GCC integration, the agreement aligns with India’s objectives of inclusive growth, resilient supply chains, and strategic economic engagement in the Gulf region.
