India's Economy, Trade Deals, and International Relations: A Summary
Important topics and their relevance in UPSC CSE exam for February 11, 2026 . If you missed the February 10, 2026, UPSC CSE exam key from the Indian Express, read it here. Syllabus: Preliminary Examination: Indian Polity and Governance-Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc. Mains Examination: General Studies-II: Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these. What’s the ongoing story: Hours after the Opposition gave notice for a no-confidence motion against him Tuesday, Speaker Om Birla, sources said, has decided not to chair Lok Sabha proceedings until a decision is taken on the notice. Key Points to Ponder: — What are the constitutional mandates related to the Speaker? — How is the Speaker elected? — What are the roles and powers of the Speaker? — Is a speaker always a speaker? — What is the procedure for the removal of a Speaker or Deputy Speaker of the Lok Sabha? — What are the specific conditions which have to be met for the procedure of removal of a Speaker to take place? — What is meant by no confidence motion? Key Takeaways: — The notice, signed by at least 118 Opposition MPs, has been submitted to Lok Sabha Secretary General Utpal Kumar Singh. — The Speaker has been under Opposition fire ever since he suspended eight MPs protesting in Lok Sabha and later claiming he had “credible information that several members from the Congress” would create “an unprecedented incident after reaching the Honourable Prime Minister’s seat” – a charge the Congress rejected, saying there was never any move by its MPs to harm the Prime Minister. — Under Article 94C of the Constitution, a Lok Sabha MP may submit a written notice of intention to move a resolution for the removal of the Speaker to the Secretary General with at least 14 days’ notice. With the House in recess after February 13, “the matter is expected to be taken up on March 9 when the House resumes,” an official in the Speaker’s office said. A Lok Sabha secretariat official said the Opposition’s notice would be “examined and proceeded as per rules”. — The Speaker’s decision came hours after the deadlock in Lok Sabha appeared to be over, with Congress MP Shashi Tharoor starting the discussion on the Union Budget when the House reconvened at 2 pm. From the Parliament Page- No-confidence motion against Speaker: What happens now? — Can the Lok Sabha Speaker be removed from their post?: Yes, the process does not apply to the Rajya Sabha or Council of States. According to practices and procedures governing the conduct of legislative business in the House, the Speaker or the Deputy Speaker can be removed from office by a resolution of Lok Sabha passed by a majority of all the then members of the House. This is procedurally possible under Article 94 (c) of the Constitution. Article 94, per se, provides for the vacation, resignation and removal of those occupying the offices of Speaker and Deputy Speaker; the rules in this regard, however, are stringent. — Conditions under which a Speaker of Deputy Speaker can be removed from their respective office: According to Article 94, a Member of the House who holds office as Speaker or Deputy Speaker of the House of the People shall vacate office if, as per 94 (a), they cease “to be a member of the House of the People”, according to 94 (b), may at any time “by writing under his hand addressed” resign office and, per 94 (c), be removed “by a resolution of the House of the People passed by a majority of all the then members of the House”. — Procedure for the removal of a Speaker or Deputy Speaker of the Lok Sabha: A member wishing to give notice of a resolution for the removal of the Speaker or the Deputy Speaker has to do it in writing to the Secretary-General of the Lok Sabha. This notice may be given by two or more members jointly – but no resolution for the removal of such officials moved under clause (c) can be moved unless at least fourteen days’ notice has been given of the intention to move the resolution. — After such as notice is received, a motion for leave to move the resolution is entered in the List of Business in the name of the members concerned on a day fixed by the Speaker. This day has to be ‘any day after fourteen days from the date of the receipt of notice of the resolutions’. — Has a motion of no-confidence been submitted against a Lok Sabha Speaker or Deputy Speaker in the past? Yes, thrice in the past in the years 1954, 1966 and 1987. — Such a motion requires to be backed by at least two Members of the House of the People, or the Lok Sabha and “50 members have to stand up” in its favour, that is, the quorum of the House has to be fulfilled for the procedure to take place. The process is governed by Rules 200 to 203 of the Rules of Procedure and Conduct of Business in Lok Sabha. — In 1954, Ganesh Vasudev Mavalankar, the first Speaker of the Lok Sabha, was the first presiding officer to face a no-confidence motion in December, 1954. There were two more – against Hukam Singh in November 1966 and Balram Jakhar in April 1987. None of them lost the Speaker chair because of the motion. — According to Rule 200A, such a resolution needs to be “specific with respect to charges”, “be clearly and precisely expressed” and “shall not contain arguments, inferences, ironical expressions, imputations or defamatory statements.” The other points which such a motion needs to adhere to include “no speech” by the Member(s) who submitted it after it is admitted for discussion. — According to the rules, whenever the House of the Lok Sabha is dissolved, the Speaker ‘shall not vacate his office until immediately before the first meeting of the House of the People after the dissolution.’ — The Speaker has the right to speak as well as to take part in the proceedings of Lok Sabha while any resolution for their removal from office is under consideration in the House. They are entitled to vote only in the first instance on such a resolution or any other matter during such proceedings but not in the case of an equality of votes. Do You Know: — The Lok Sabha, the Lower House of Parliament, is the highest legislative body in the country. The presiding officer of India’s Lower House of Parliament, the Lok Sabha Speaker, is the constitutional and ceremonial head of the House. According to Article 93 for the Lok Sabha and Article 178 for state assemblies, these houses must choose two of their members to be Speaker and Deputy Speaker “as soon as may be” after the House begins. — Article 95 provides provisions regarding the “power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker.” — Article 96 specifies the powers of the Speaker and Deputy Speaker during consideration of a resolution for their removal from office. It says, “The Speaker or the Deputy Speaker is not to preside while a resolution for his removal from office is under consideration.” Other Important Articles Covering the same topic: 📍UPSC Issue at a Glance | Office of Speaker of Lok Sabha: 5 Key Questions You Must Know for Prelims and Mains Previous year UPSC Prelims Question Covering similar theme: (1) Consider the following statements regarding a No-Confidence Motion in India: (UPSC CSE 2014) 1. There is no mention of a No-Confidence Motion in the Constitution of India. 2. A motion of No-Confidence can be introduced in the Lok Sabha only. 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 Syllabus: Preliminary Examination: Current events of national and international importance Mains Examination: General Studies-II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation What’s the ongoing story: India’s newly notified regulatory framework for social media companies is a mixed bag for them: on one hand the IT Ministry has diluted an earlier proposed requirement to display labels on content generated through AI, but on the other, they have been handed down significantly stricter timelines to takedown problematic content — from an earlier 36 hours to three hours now. Key Points to Ponder: — What is safe harbour protection? — What are the challenges of AI generated content? — What is synthetically generated information? — What are the rules governing social media in India? — What is Section 79 of the IT Act, 2000? — Know about Sahyog portal — Why is social media a double-edged sword? Key Takeaways: — On Tuesday, the IT Ministry notified amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. Under the fresh amendments, the government has removed an earlier proposal (from last October) to apply a label to content generated through AI tools to cover at least 10% of the space, but under the notified rules, that has been changed to place “prominently” visible labels. — The specific 10% requirement has been done away with. The changes will come into effect on February 20, the final day of the upcoming India-AI Impact Summit. A senior government official said that the change was made as tech companies, during consultations, flagged that the 10% label requirement would take away space from the actual piece of content, making it unappealing for viewers. — The pitfalls of AI generated content were on full display earlier this year when Grok, the AI service of X (formerly Twitter) started creating, prompted by user requests, pictures of women in revealing clothing, casting a shadow on their dignity and privacy. — The requirement to takedown content quicker does not just apply to AI generated content but a wide range of content that the law deems unlawful. Platforms must now remove non-consensual intimate imagery within two hours, as opposed to 24 hours earlier, and other forms of unlawful content within three hours, from an earlier requirement to act on it within 36 hours. — This change is expected to receive wide pushback from big tech firms. They may raise concerns around heavy compliance burden, because if they fail to act on flat content within the new prescribed timelines, it might result in a loss of safe harbour — a critical immunity that protects them from legal actions for hosting user generated content. — The government official said that timelines have been compressed as they received feedback from several stakeholders that the timelines prescribed earlier were too long and did not prevent a content’s virality. — As per the new rules, the definition of synthetically generated information now has carveouts for assistive and quality-enhancing uses of AI. Routine and good faith editing of audio, video or audio-visual content is excluded from the definition of SGI. — When an intermediary becomes aware that its service has been used for creating, disseminating or hosting SGI, it must take “appropriate” and “expeditious” action, including measures like immediate disabling of access or removal of such information, suspension or termination of user accounts, etc. Do You Know: — The Sahyog portal was launched by the Union Home Ministry last year to expedite orders to block objectionable content. It is maintained by the Indian Cyber Crime Coordination Centre (I4C). — It serves as a centralised communication channel through which notices under Section 79(3)(b) of the Information Technology (IT) Act, 2000 are delivered to internet intermediaries – a broad term that includes telecom operators, internet service providers, social media platforms and web-hosting services. — Under Section 79, online intermediaries are granted “safe harbour” protection, which gives them legal immunity from liability for content generated by their users. For instance, without this protection, a platform could be sued for a defamatory post made by a user. With safe harbour, only the user who created the content faces legal action. — However, this immunity is conditional. Section 79(3)(b) states that intermediaries lose this protection if, upon receiving “actual knowledge” from an appropriate government agency about any unlawful information, they fail to “expeditiously remove or disable access” to that material. The Sahyog portal was created to automate and streamline the process of sending these notices. Other Important Articles Covering the same topic: 📍 Knowledge Nugget: Sahyog Portal — What you must know for the UPSC exam 📍 Why Karnataka HC upheld Union govt’s Sahyog portal, rejected X’s challenge Previous year UPSC Prelims Question Covering similar theme: (2) Right to Privacy is protected as an intrinsic part of Right to Life and Personal Liberty. Which of the following in the Constitution of India correctly and appropriately imply the above statement? (UPSC CSE 2018) (a) Article 14 and the provisions under the 42nd Amendment to the Constitution (b) Article 17 and the Directive Principles of State Policy in Part IV (c) Article 21 and the freedoms guaranteed in Part III (d) Article 24 and the provisions under the 44th Amendment to the Constitution Previous year UPSC Mains Question Covering similar theme: Social media is triggering ‘Fear of Missing Out’ amongst the youth, precipitating depression and loneliness. (UPSC CSE 2024) Syllabus: Preliminary Examination: Current events of national and international importance Mains Examination: General Studies-II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests . What’s the ongoing story: India is set to procure six additional Boeing P-8I aircraft, a multi-role Long Range Maritime Reconnaissance Anti-Submarine Warfare (LRMR ASW) aircraft, as part of an inter-governmental agreement with the United States. Key Points to Ponder: — Know about the defence cooperation between India and the US — What are the features of the P-8I submarine? — What are the defence equipment imported by India? — What are the features of Rafael fighter jets? — Know about the Budget allocation for the defence sector — What are the steps taken by India towards ‘Make in India’ push in the defence sector? Key Takeaways: — The Defence Procurement Board (DPB) is learnt to have cleared the procurement on January 16, weeks before US President Donald Trump , on February 2, announced an agreement with India on a trade deal and cut tariff to 18 per cent. — According to highly placed sources, the decision to go ahead with the acquisition of the P-8Is, among other factors, may have played a significant role in achieving a breakthrough in the trade talks. — According to sources, the procurement is set to be cleared by the Defence Acquisition Council (DAC) at its meeting on February 12. It will then need to be cleared by the Cabinet Committee on Security, and the final deal will be signed after the cost negotiations are over. — According to officials familiar with the matter, the procurement will be made under the Defence Acquisition Procedure 2020 — the document that governs all capital military procurements — thus eliminating any offset obligation to the US firm. — In 2020, the defence ministry had removed the offset clause requirement in Inter-Governmental Agreements when it released the new Defence Acquisition Procedure (DAC) 2020. — So, amid the increased push for ‘Make in India’, this is one of the few foreign procurements which will not involve any technology transfer and, possibly, other obligations like co-production or creation of maintenance and repair infrastructure. — Over the last few months, India has also initiated a few other key military procurements from the US, including 216 M982A1 Excalibur tactical projectiles and 100 Javelin rounds for over $90 million. India has also signed Letters of Offer and Acceptance (LOAs) with the US for sustainment support of the Indian Navy’s fleet of MH-60R helicopters through Follow-on Support and Follow-on Supply Support for a period of five years, worth Rs 7,995 crore. — Currently, the Indian Navy operates 12 P-8Is, which were ordered in two batches — the first batch of eight aircraft was ordered in 2009, and subsequently four aircraft were ordered in 2016. The Rajali-based INAS 312 and INAS 316 at INS Hansa, Goa, operate these aircraft. — A long-range, multi-mission maritime patrol aircraft operated by the Indian Navy, the Boeing P-8Is are specifically designed for anti-submarine warfare (ASW), anti-surface warfare (ASW), and intelligence, surveillance and reconnaissance (ISR). Considering India’s increasing focus on the Indian Ocean Region and maritime matters, these aircraft would strengthen the Navy’s capabilities. — Ahead of French President Emmanuel Macron’s visit to India between February 17 and 19, the Defence Acquisition Council (DAC) is set to discuss the procurement of Rafale fighter jets for the Indian Air Force this week. — According to officials, the DAC, headed by Defence Minister Rajnath Singh , will likely discuss the acquisition of the Rafales on Thursday and could grant the Acceptance of Necessity (AoN) for the fighter jets. — Grant of AoNs is the first step in the defence procurement process even though it does not necessarily lead to a final order. — The next fiscal is projected to see a nearly 22% increase in the defence modernisation budget compared to the allocations set for the previous financial year. The highest capital allocations – Rs 0.63 lakh crore – for 2026-27 have been earmarked for aircraft and aero-engines, up from Rs 0.48 lakh crore in the previous fiscal. — This jump in capital budgetary allocations also points to the government’s plans to sign multiple big-ticket contracts in the upcoming financial year, including the American P8Is and the Rafale jets, which will involve advance payments of up to 10% of the contract value at the outset — The IAF already operates 36 Rafales, and the Indian Navy would be inducting 26 Rafale M aircraft for carrier operations over the next few years. The procurement of additional Rafales is thus expected to reduce logistical and training costs. Do You Know: — In the first Budget following Operation Sindoor, which India conducted in May last year to dismantle terror infrastructure in Pakistan, Finance Minister Nirmala Sitharaman Sunday announced a major 15 per cent hike in the overall defence budget for fiscal year 2026-2027, raising it to Rs 7.85 lakh crore. — This Budget also includes a nearly 22 per cent increase in the defence modernisation budget compared to the allocations set for the previous financial year. India’s defence capital outlay for 2025-26 stood at Rs 1.8 lakh crore, and has been raised to Rs 2.19 lakh crore for 2026-2027. — Of these, the highest capital allocations have been earmarked for aircraft and aero-engines at Rs 0.63 lakh crore for 2026-27, up from Rs 0.48 lakh crore in the previous fiscal. Other Important Articles Covering the same topic: 📍 This Word Means: Rafale-M 📍 First budget after Op Sindoor: India hikes defence budget by 15% to Rs 7.85 lakh crore, capital outlay by 22% Previous year UPSC Prelims Question Covering similar theme: (3) With reference to Agni-IV Missile, which of the following statement(s) is/are correct? (UPSC CSE 2014) 1. It is surface-to-surface missile. 2. It is fuelled by liquid propellant only. 3. It can deliver one tonne nuclear warhead about 7500 km away. Select the correct answer using the codes given below. (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 Syllabus: Preliminary Examination: Current events of national importance, Indian Polity and Governance-Constitution, Public Policy, Rights Issues, etc. Mains Examination: General Studies-II: Constitution, Government policies and interventions for development in various sectors and issues arising out of their design and implementation. What’s the ongoing story: The Supreme Court on Tuesday sought a report from the Centre on what action had been taken in pursuance of its Constitution bench judgment, which allowed sub-classification of Scheduled Castes for the purpose of reservation and said that creamy layer principle be extended to the category. Key Points to Ponder: — What are the constitutional provisions for the protection of SCs and STs? — What is the Presidential List of Scheduled Castes? — What are the ‘doctrine of equality’ and ‘doctrine of classification’? — What are the arguments for and against the sub-classification of SC and ST? — What is the debate about the ‘creamy layer’ in SC and ST reservations? — What is the socio-economic status of SC and ST in India? — Why reservations for SC and ST were introduced? Key Takeaways: — The direction came on an application seeking a direction to the Centre “to comply with the judgment…dated 01.08.2024, wherein it has been held that sub-classification within the Scheduled Castes for equitable distribution of reservation is constitutionally permissible and necessary to achieve substantive equality” — On Tuesday, the petitioners told the bench that after the 2024 judgment, what remained was the execution by the government. The court then decided to seek the action-taken report. — A seven-judge Constitution bench of the SC presided by then Chief Justice of India D Y Chandrachud had in a 6:1 majority ruling on August 1, 2024, overruled the SC’s 2004 judgment in E V Chinnaiah vs State of Andhra Pradesh, which had held that SCs constituted a homogeneous group and cannot be sub-categorised. — Allowing the sub-classification, the majority ruling said “empirical evidence indicates that there is inequality even within the Scheduled Castes. The Scheduled Castes are not a homogeneous integrated class”. — Justice Bela M Trivedi (since retired) was the lone dissenter who, in her verdict, said Scheduled Castes constituted a homogeneous class and “cannot be tinkered with by the states”. — It rejected the argument that once enumerated in the Presidential List under Article 341 of the Constitution, the Scheduled Castes constitute a homogeneous class, which is incapable of further subdivision/sub-classification and that any attempt to sub-categorise them would amount to tinkering with the Presidential List, in violation of Article 341 (2) and Article 14 of the Constitution. — The majority also backed the exclusion of creamy layer from SCs and STs. Justice B R Gavai (since retired), in his concurring judgment, said he is “of the view that the State must evolve a policy for identifying the creamy layer even from the Scheduled Castes and Scheduled Tribes so as exclude them from the benefit of affirmative action. In my view, only this and this alone can achieve the real equality as enshrined under the Constitution”. – On September 24, 2024, the SC also dismissed review petitions challenging the seven-judge bench order. Other Important Articles Covering the same topic: 📍 Sub-classification of SC, ST 📍 Milestone after Mandal: Supreme Court allows new quotas within SC/ST quota UPSC Prelims Practice Question Covering similar theme: (4) Which of the following states has become the first to implement SC sub-categorisation? (a) Kerala (b) Assam (c) Telangana (d) Odisha Previous year UPSC Mains Question Covering similar theme: What are the two major legal initiatives by the State since Independence addressing discrimination against Scheduled Tribes (STs). (UPSC CSE 2017) Syllabus: Preliminary Examination: Current events of national and international importance Mains Examination: General Studies-II: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. What’s the ongoing story: C Raja Mohan writes: Tucked away in the India–US joint statement outlining the framework for an interim trade deal is an innocuous paragraph on “economic security”. Although the idea of economic security is not new, it has now acquired a new prominence. It heralds the return of economic statecraft to the very centre of grand strategy. Key Points to Ponder: — What do you understand about the term economic security? — What are the steps taken by India to enhance supply-chain resilience? — How are international relations being dictated in recent times? — Economic security is fundamental to national security. Analyse. — What are the major trade agreements signed by India in recent times? — What is the significance of the India-US interim trade deal? Key Takeaways: — The India-US joint statement says that the two sides “agree to strengthen economic security alignment to enhance supply-chain resilience and innovation through complementary actions to address non-market policies of third parties, as well as cooperation on inbound and outbound investment reviews and export controls”. — This is the new commercial grammar of geopolitics — where trade, technology, capital flows, and supply chains define the strategic balance just as much as military muscle. — To be sure, economic, industrial and technological capabilities have always constituted the core of hard power. But the relative political harmony among major powers and the rise of globalisation after the Soviet Union’s collapse in 1991 encouraged the separation of economics and security into different realms. — That assumption has steadily eroded since the 2010s, as the backlash against globalisation mounted in the West and strategic tensions between the United States, China, and Russia surged. — Donald Trump ’s first term (2017–21) was the moment when the old consensus shattered. Trump openly challenged America’s deep economic entanglement with China, identified the trade deficit as a national vulnerability, and insisted that Washington could no longer allow Beijing to hollow out US manufacturing. — The Covid crisis exposed the fragility of global supply chains. Russia’s invasion of Ukraine in 2022 drove home the new concerns. By the time the Group of Seven leaders met in Hiroshima in 2023, “economic security” had replaced the promotion of globalisation as the highest priority. — Trump’s return to the White House has dramatically accelerated this shift. The 2025 National Security Strategy affirmed that “economic security is fundamental to national security”. — Where does Russia figure in this shifting landscape? With a GDP of barely $2.5 trillion — compared to $31 trillion for the US, $20 trillion for the EU and China — Moscow is not an economic peer of the US. But its abundant natural resources, from hydrocarbons to critical minerals, give it great relevance. — The conflict in Ukraine and its impact on India is an important reminder of a forgotten truth. When you are caught in the crossfire between great powers, even if unintended, there will be a price to pay. For now, however, India’s choice between greater access to the US market and discounted Russian oil is a no-brainer. — Delhi ’s recent focus on signing free-trade agreements with Western partners marks an important pivot. After years of looking east for trade partnerships, Delhi has come to terms with a reality staring it in the face – the significant complementarity with the Western economies. — Indian diplomacy did adopt the language of economic resilience and trusted supply chains in the late 2010s, especially under the rubric of the Quad. India’s trade policy has finally caught up after Delhi withdrew from RCEP talks on Asia-wide free trade in 2019, focused on trade deals with the West and brought some of them to a close in the last few months. — The joint statement’s reference to “non-market policies of third countries” is clearly a reference to China. India’s participation in the ministerial meetings of new US initiatives like the Pax Silica and the critical minerals group over the last few weeks reflects a clear strategic judgement: That India cannot afford to remain unaligned in the deepening geoeconomic contestation between US and China. — The volatility of US policies and the inherent dynamism in the geoeconomic relationships between the US, China and Russia demand that Delhi continuously tend its foreign economic policy. India’s ability to secure its position in the unfolding geoeconomic world will depend even more on how deep its economic reform and technological modernisation at home are. Other Important Articles Covering the same topic: 📍 Decisive break from past: Closing deal with US, India emerges more confident negotiator 📍 India-US deal is one-sided. It creates vulnerabilities Previous year UPSC Mains Question Covering similar theme: “The USA is facing an existential threat in the form of a China, that is much more challenging than the erstwhile Soviet Union.” Explain. (UPSC CSE 2021) Syllabus: Preliminary Examination: Current events of national and international importance. Mains Examination: General Studies-II, III: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests; Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment. What’s the ongoing story: Days after India signed a trade deal with the United States, Bangladesh on Tuesday (February 10) struck a fresh trade deal with Washington, securing zero reciprocal tariffs on certain textile and apparel goods and a 19% reciprocal tariff compared to 20% earlier, which has sent shares of Indian textile exporters tumbling. Key Points to Ponder: — Know the key highlights of the India-US Interim deal. — What is the significance of the India-US trade deal? How important is it for India? — What was the impact of US reciprocal tariffs on India? — What are the concerns associated with the India-US trade deal? — Read about the equalisation levy. — How may the recent US–Bangladesh trade deal impact India’s trade interests? — What is the status of India-Bangladesh relations? — What are the challenges faced by India’s textile sector? Key Takeaways: — “The United States commits to establishing a mechanism that will allow for certain textile and apparel goods from Bangladesh to receive a zero reciprocal tariff rate. This mechanism will provide that a to-be-specified volume of apparel and textile imports from Bangladesh can enter the United States at this reduced tariff rate,” the Bangladesh-US joint statement said. — However, the statement added that the volume of duty-free textile and apparel products from Bangladesh to the US would be determined on the basis of Dhaka’s imports of “U.S.-produced cotton and man-made fibre textile inputs” from Washington. Bangladesh is the second-largest exporter of textiles and apparel goods after China. — A Commerce and Industry Ministry official said that Bangladesh has significantly opened its economy to the US in exchange for a slight gain in textiles. “India has protected several sectors that Bangladesh has opened. The deal has to be seen in its entirety,” the official said in response to a query by this newspaper. — Confederation of Indian Textile Industry (CITI) Chairman, Ashwin Chandran, said that the US-Bangladesh deal opens a fresh challenge for India’s textiles and apparel exporters. “This challenge is two-fold. First, the tariff differential between India and Bangladesh has halved from 2% to 1% (India faces an 18% US tariff), which is a matter of concern in a sector with narrow profit margins. Secondly, the US–Bangladesh Agreement on Reciprocal Trade could likely adversely affect India’s cotton yarn exports to Bangladesh,” Chandran said. — Bangladesh is already among the leading exporters of textiles and apparel to the United States, alongside China, Vietnam, and India. Any additional advantage for Bangladesh could further increase competition for Indian exporters. — Dhaka, which is in the midst of a general election, sprang into action after a slew of Indian trade deals with the UK, US and EU that will particularly benefit labour-intensive sectors such as the textile and footwear sectors. This is concerning for Bangladesh as it is the second-largest textile exporter in the world after China. The sector is also Dhaka’s key foreign exchange earner. — Bangladesh is also pushing for a Free Trade Agreement (FTA) with the European Union after India gained a competitive edge in the textile sector with a trade agreement with the European bloc and the UK. — Trade deals signed by Bangladesh and India further assume significance as ties between New Delhi and Dhaka have soured in the last few months. In April last year, New Delhi terminated the transhipment facility for Bangladesh’s export cargo. In 2020, India permitted the transhipment of export cargo from Bangladesh to third countries using Indian Land Customs Stations en route to Indian ports and airports, to enable smooth trade flows for Bangladesh’s exports to countries such as Bhutan, Nepal, and Myanmar. — Over the last decade-and-a-half, India sought to engage with the Sheikh Hasina government in Dhaka to open pathways to the Northeast via Bangladesh. However, after Hasina’s ouster and the installation of an interim government led by Yunus, these plans have fallen through. From the Economy Page- “ Zero digital services tax promise ‘shrinks’ sovereign policy space ” — After India agreed to purchase $500 billion worth of American products over five years and stop imports of Russian oil under the trade deal with the US, a White House fact sheet on Tuesday said that India has agreed to remove its digital services taxes and committed to negotiating bilateral digital trade rules that ‘address barriers’ to digital trade. — This assumes significance as India had already removed the ‘Google tax’ before the US trade negotiations formally began. But Washington, during the negotiations, sought a unilateral commitment from India not to reintroduce the tax in the future under the trade deal, as reported earlier by this newspaper. — On July 8 last year,The Indian Expresshad reported that legal advisers to the Ministry of Commerce and Industry had suggested that Indian negotiators dealing with their US counterparts should not accept Washington’s proposal that prohibits India from reintroducing equalisation levy-style taxes, popularly known as the Google tax. — As part of the 35th amendments to the Finance Bill, 2025, the Centre proposed removing the 6% equalisation levy (EL) it used to charge on digital ads. Effective April 1, 2025, the levy was abolished on online advertisements provided by non-resident digital companies, which followed the earlier removal of the 2% equalisation levy on e-commerce services through the Finance Act, 2024. — The equalisation levy was introduced by the Finance Act, 2016, on online advertisements and later expanded to cover digital services as a measure to ‘equalise’ the tax treatment of resident and non-resident e-commerce companies. — The legal advisers had told the Ministry that the provisions proposed by the US were “unilaterally framed” as it did not state that both parties should refrain from applying digital taxes on each other; instead, they sought a legal commitment only from the Indian side. — While the US offers a range of digital services in India and American tech companies have long lobbied against any taxes on such services, India also exports a wide range of digital services to the US — particularly in the IT sector — generating the majority share of its total services export earnings from the US market. — Another concern raised with the government was that agreeing to such unilateral provisions could set a risky precedent for future trade negotiations, where similar demands could be made by other trading partners during talks with New Delhi , thereby complicating future negotiations. — Trade experts said that digital taxation is typically discussed outside the framework of a trade agreement, as it is a nation’s sovereign right to decide on such matters, and India should reserve that right. — The United States Trade Representative (USTR), in its report on non-tariff barriers, had earlier cited the 6% equalisation levy as a discriminatory measure against US firms. The USTR report said that most digital services taxes are designed in ways that discriminate against US companies, often singling out American firms for taxation while excluding domestic companies engaged in similar lines of business. — The US has also raised concerns about digital services taxes with a number of trade partners, particularly the EU. The US had also threatened to impose additional 10% tariffs over a dispute on the digital services tax. Other Important Articles Covering the same topic: 📍 What India has really given on agriculture in India-US trade deal Previous year UPSC Mains Question Covering similar theme: ‘What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s National self-esteem and ambitions’. Explain with suitable examples. (UPSC CSE 2019) As per the Ministry of External Affairs (MEA) statement on Tuesday evening, in their meeting held under the framework of India-China Strategic Dialogue, both sides recognised the need for an early conclusion of an updated air services agreement. The Vice Foreign Minister also conveyed that China understands and respects India’s aspirations for UNSC membership, the MEA said. The step comes against the backdrop of repatriation efforts globally to return looted or illicitly trafficked cultural artefacts to Asian nations, including Cambodia, Indonesia, Sri Lanka and Thailand, among others. In 2024, 297 antiques, in terracotta, stone and metal, were returned to India by the US. According to officials, the joint statement on the India-US trade deal was the only binding document on the deal, and the government would not respond to other statements from the US side. Investors will weigh the long-term tax holiday and Safe Harbour certainty against these on-ground constraints. A low effective tax rate is attractive, but interruptions in power, delays in approvals, or uncertainty around local regulations can offset some of that advantage. In practice, global firms would compare operating costs, reliability, talent availability, and regulatory risk in addition to taxes. Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X. 🚨 Click Here to read the UPSC Essentials magazine for January 2026. Share your views and suggestions in the comment box or at manas.srivastava@ indianexpress.com 🚨