| (November, 2025): IMF to Reclassify India’s Exchange Rate Regime The IMF announced plans to reclassify India’s exchange rate regime from “floating” to a “crawling peg” in its upcoming Article IV report. This change reflects the IMF’s view that the RBI actively intervenes to smooth rupee volatility, although India officially maintains a market-determined exchange rate. |
| (November, 2025): Export Promotion Mission (EPM) Approved To tackle the widening trade deficit and global tariff pressures, the Cabinet approved the EPM with an outlay of ₹25,060 crore. It targets sectors like textiles and engineering, aiming to enhance trade finance, market access, and logistics for Indian exporters. |
| (October, 2025): China Files WTO Complaint Against India over EV Subsidies China initiated a dispute settlement at the WTO, alleging that India’s subsidies for Electric Vehicles (PLI schemes and tax rebates) violate global trade rules by discriminating against foreign producers. This marks a significant escalation in trade tensions affecting India’s industrial policy. |
| (October, 2025): Forex Reserves Cross Historic $700 Billion Mark India’s foreign exchange reserves surged to a record high of over $702 billion. The increase was primarily driven by the RBI’s strategic gold purchases and valuation gains, strengthening India’s buffer against external sector shocks and currency volatility. |
| (October, 2025): Foreign Currency Settlement System (FCSS) Launched at GIFT City A real-time settlement system for foreign currency transactions (initially USD) was launched at GIFT IFSC. This reduces transaction costs and time for cross-border payments, easing capital account operations for Indian entities and reducing reliance on offshore intermediaries. |
| (October, 2025): India and Israel Sign Bilateral Investment Agreement (BIA) India signed a BIA with Israel, the first with an OECD nation under India’s new model text. The agreement provides legal certainty and dispute resolution mechanisms to boost Foreign Direct Investment (FDI) and paves the way for a future Free Trade Agreement. |
| (September, 2025): US Imposes 50% Tariffs on Indian Exports The US imposed reciprocal and secondary tariffs of up to 50% on Indian goods, affecting 55% of India’s exports to the US. This protectionist move threatens India’s trade surplus with the US and creates inflationary pressure on the rupee due to potential retaliatory costs. |
| (August, 2025): RBI Report Highlights ‘FDI Paradox’ The RBI Annual Report revealed that while gross FDI inflows rose, net FDI collapsed to just $0.4 billion in 2024-25 due to a surge in repatriation and disinvestments. This “paradox” signals structural issues in retaining long-term foreign capital despite high economic growth. |
| (August, 2025): India–UK Comprehensive Economic and Trade Agreement (CETA) Signed India and the UK signed a landmark FTA aiming to double bilateral trade to $112 billion by 2030. The pact eliminates tariffs on 99% of Indian goods, boosting sectors like textiles and leather, and facilitates service sector mobility, directly impacting the current account. |
| (July, 2025): Review of India-ASEAN Trade in Goods Agreement (AITIGA) India initiated a review of its FTA with ASEAN to address a ballooning trade deficit ($45.2 billion). The review focuses on preventing the circumvention of “rules of origin” and addressing non-tariff barriers to protect domestic industries from dumping. |
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External Sector and International Trade of India Current Affairs
| (November, 2025): IMF to Reclassify India’s Exchange Rate Regime The IMF announced plans to reclassify India’s exchange rate regime from “floating” to a “crawling peg” in its upcoming Article IV report. This change reflects the IMF’s view that the RBI actively intervenes to smooth rupee volatility, although India officially maintains a market-determined exchange rate. |
| (November, 2025): Export Promotion Mission (EPM) Approved To tackle the widening trade deficit and global tariff pressures, the Cabinet approved the EPM with an outlay of ₹25,060 crore. It targets sectors like textiles and engineering, aiming to enhance trade finance, market access, and logistics for Indian exporters. |
| (October, 2025): China Files WTO Complaint Against India over EV Subsidies China initiated a dispute settlement at the WTO, alleging that India’s subsidies for Electric Vehicles (PLI schemes and tax rebates) violate global trade rules by discriminating against foreign producers. This marks a significant escalation in trade tensions affecting India’s industrial policy. |
| (October, 2025): Forex Reserves Cross Historic $700 Billion Mark India’s foreign exchange reserves surged to a record high of over $702 billion. The increase was primarily driven by the RBI’s strategic gold purchases and valuation gains, strengthening India’s buffer against external sector shocks and currency volatility. |
| (October, 2025): Foreign Currency Settlement System (FCSS) Launched at GIFT City A real-time settlement system for foreign currency transactions (initially USD) was launched at GIFT IFSC. This reduces transaction costs and time for cross-border payments, easing capital account operations for Indian entities and reducing reliance on offshore intermediaries. |
| (October, 2025): India and Israel Sign Bilateral Investment Agreement (BIA) India signed a BIA with Israel, the first with an OECD nation under India’s new model text. The agreement provides legal certainty and dispute resolution mechanisms to boost Foreign Direct Investment (FDI) and paves the way for a future Free Trade Agreement. |
| (September, 2025): US Imposes 50% Tariffs on Indian Exports The US imposed reciprocal and secondary tariffs of up to 50% on Indian goods, affecting 55% of India’s exports to the US. This protectionist move threatens India’s trade surplus with the US and creates inflationary pressure on the rupee due to potential retaliatory costs. |
| (August, 2025): RBI Report Highlights ‘FDI Paradox’ The RBI Annual Report revealed that while gross FDI inflows rose, net FDI collapsed to just $0.4 billion in 2024-25 due to a surge in repatriation and disinvestments. This “paradox” signals structural issues in retaining long-term foreign capital despite high economic growth. |
| (August, 2025): India–UK Comprehensive Economic and Trade Agreement (CETA) Signed India and the UK signed a landmark FTA aiming to double bilateral trade to $112 billion by 2030. The pact eliminates tariffs on 99% of Indian goods, boosting sectors like textiles and leather, and facilitates service sector mobility, directly impacting the current account. |
| (July, 2025): Review of India-ASEAN Trade in Goods Agreement (AITIGA) India initiated a review of its FTA with ASEAN to address a ballooning trade deficit ($45.2 billion). The review focuses on preventing the circumvention of “rules of origin” and addressing non-tariff barriers to protect domestic industries from dumping. |
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