Comprehensive Study Guide for Law Prep: Economic Agreements, National Security, and Indian History

India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA)

General Overview and Implementation

• The CEPA is a full and deep trade agreement that completed three years of its signing on $18th\,February\,2025$.

• It was signed on $18th\,February\,2022$ during a virtual summit between the Prime Minister of India, Shri Narendra Modi, and the President of the UAE and Ruler of Abu Dhabi, His Highness Sheikh Mohamed bin Zayed Al Nanhyan.

• The agreement officially entered into force on $1st\,May\,2022$.

• The UAE itself was officially unified on $2nd\,December\,1971$.

Strategic and Regional Context

• Oman is a member of the Gulf Cooperation Council (GCC) that possesses direct access to both the Persian Gulf and the Gulf of Oman, allowing it to bypass the Strait of Hormuz.

• The Gulf Cooperation Council (GCC) consists of member states including Saudi Arabia, Qatar, Bahrain, Oman, and Kuwait; however, Iran is not a part of the GCC.

• Under CEPA, the UAE has removed duties on various Indian exports, including gems and jewellery, engineering products, and textiles and garments, though crude oil remains an exception.

Bilateral Trade Performance and Statistics

• Since the signing of the agreement, bilateral merchandise trade between the two nations has nearly doubled.

• Trade rose from $USD\,43.3\,billion$ in the $2020-21$ period to $USD\,83.7\,billion$ in the $2023-24$ period.

• In the current financial year up until January $2025$, bilateral trade reached $USD\,80.5\,billion$.

• Non-oil trade diversification has been a primary success: as of FY $2023-24$, non-oil trade reached $USD\,57.8\,billion$, accounting for over half of total trade.

• The long-term target is to increase non-oil trade to $USD\,100\,billion$ by the year $2030$.

• Utilization metrics of the CEPA:

  • Nearly $2,40,000$ Certificates of Origin have been issued since the agreement came into force.

  • Total exports valued at $USD\,19.87\,billion$ have been made to the UAE using these certificates.

  • Non-oil exports specifically reached $USD\,27.4\,billion$ in FY $2023-24$, recording an average growth of $25.6\%$ since the enforcement of the agreement.

Sectoral and Product-Level Impacts

• Major sectors benefiting from CEPA besides refined crude oil include:

  • Gems and jewellery.

  • Electrical machinery and equipment.

  • Light and medium-high technology goods.

  • Boilers, generators, and reactors.

  • Organic and inorganic chemicals.

• At the individual product level, smartphones have emerged as a significant export item, with exports to the UAE valued at $USD\,2.57\,billion$ during FY $2023-24$.

Ethnic Crisis and Governance in Manipur

Origins and Internal Security Crisis

• Manipur has experienced prolonged ethnic violence between the Meitei community (located primarily in the Imphal Valley) and the Kuki-Zo tribal groups (inhabiting the hill districts).

• The immediate trigger for the violence, which began in May $2023$, was a Manipur High Court order or government move to consider granting Scheduled Tribe (ST) status to the Meitei community.

• Kuki-Zo groups opposed this move due to fears of:

  • Dilution of existing affirmative action (reservation) benefits.

  • Impacts on land ownership rights in hill areas.

  • Weakening of their political representation.

• The unrest led to more than $250$ deaths and the displacement of approximately $60,000$ people, many of whom remain in relief camps.

Breakdown of Governance and Political Transition

• The state faced instability characterized by repeated curfews, internet shutdowns, and community segregation.

• On $9th\,February\,2025$, Chief Minister N. Biren Singh resigned amid the threat of a no-confidence motion in the Legislative Assembly.

• Following the resignation, President's Rule was imposed under Article $356$ of the Constitution due to a breakdown of governance.

• The Manipur Legislative Assembly consists of $60$ members. In the $2022$ election, the BJP won $37$ seats, which included seven members from the Kuki-Zo community.

Restoration of Elected Government

• In early $2026$, the BJP appointed Tarun Chugh as a central observer to oversee the election of a new leader.

• On $5th\,February\,2026$, Yumnam Khemchand Singh was sworn in as the new Chief Minister, ending nearly a year of President's Rule.

• The appointment of Nemcha Kipgen, a Kuki-Zo MLA, as Deputy Chief Minister was proposed to signal reconciliation and inclusive governance.

• Note on the 6th Schedule: The 6th Schedule of the Indian Constitution currently applies to the states of Assam, Meghalaya, Mizoram, and Tripura.

Legacy of Saina Nehwal and Indian Badminton

Retirement and Career Transition

• Saina Nehwal casually confirmed her retirement on a podcast rather than through a formal announcement.

• Her departure follows a nearly two-year absence from the international circuit caused by persistent injuries and the natural progression of time.

• Nehwal is a former World No. 1 and was the first Indian athlete to win an Olympic medal in badminton.

Historical Impact on Indian Sports

• Before Nehwal's rise, badminton in India was a niche sport on the fringes of mainstream consciousness, lacking visible role models and television coverage.

• She challenged the longstanding global dominance of European and Chinese players through persistence and excellence.

• Her career served as a catalyst, transforming badminton into a national conversation and an aspirational career path for thousands of young athletes, particularly girls from modest backgrounds.

• The origin of badminton is generally attributed to India (evolving from a game called 'Poona').

Indian National Congress (INC) Historical Evolution

Early Phase and Constitutional Methods

• Founded in $1885$, the INC initially served as a platform for dialogue between educated Indian elites and the British colonial administration.

• The primary objective was often debated as creating a "safety valve" or providing a platform for representation, though the goal eventually shifted toward self-government.

• Initially, the party relied on "Moderates" who used constitutional methods such as petitions, resolutions, and appeals for gradual reform.

Transformation to a Mass Movement

• By the early $20th$ century, British failure to respond to demands, coupled with economic hardship and racial discrimination, led to the rise of more assertive protest forms.

• The entry of Mahatma Gandhi fundamentally altered the INC's character by introducing non-violence and Satyagraha, broadening the social base to include peasants, workers, and marginalized groups.

• The Non-Cooperation Movement marked the definitive shift from an elite organization to a mass-based nationalist movement.

Key Resolutions and Sessions

• Lucknow Session (1916): Marked the reunion of the Moderate and Extremist factions and resulted in a joint political demand with the Muslim League.

• Karachi Resolution (1931): Significant for linking the concept of political freedom with social and economic justice.

Union Budget 2026-27 and Economic Framework

Strategic Objectives and Technology Focus

• The budget emphasizes achieving a "Developed India" (Viksit Bharat) by the year $2047$.

• Key investment areas include advanced technology: Artificial Intelligence (AI), biopharma, semiconductors, and critical minerals.

Fiscal and Expenditure Restructuring

• Over the past decade, the share of revenue expenditure in total expenditure has declined from $88\%$ in $2014-15$ to approximately $77\%$ in the $2026-27$ Budget Estimate (BE).

• Central subsidies fell by approximately $7$ percentage points during this time.

• Capital expenditure (CapEx) growth has slowed from $28.3\%$ in $2023-24$ to $4.2\%$ in $2025-26$ (Revised Estimate).

• For $2026-27$, CapEx is projected to grow by $11.5\%$, maintaining a level of approximately $3.1\%$ of GDP.

Tax Revenue and Buoyancy

• The buoyancy of gross tax revenue has fallen to $0.8$, which is below the benchmark of $1$.

• Direct taxes show a buoyancy of $1.1$.

• Indirect taxes lag significantly with a buoyancy of $0.3$, attributed to slower growth in GST outcomes.

Finance Commission and State Transfers

• The 16th Finance Commission has retained the states' share in the divisible pool at $41\%$.

• However, it has discontinued revenue deficit grants and reduced overall Finance Commission grants, leading to a decline in total transfers to states.

New Welfare and Entrepreneurship Initiatives

• Mahatma Gandhi Gram Swaraj Initiative (MGGSI): Aimed at promoting food processing industries, khadi, handloom, and handicrafts in rural areas.

• SHE-Mart: A new initiative announced to support women entrepreneurs.

• Kartavya Framework: A policy structure focused on accelerating sustainable economic growth and fulfilling aspirations, though it does not primarily focus on agricultural subsidy distribution.

United States-India Interim Trade Agreement

Negotiation Framework

• Launched on $13th\,February\,2025$ by Prime Minister Narendra Modi and US President Donald J. Trump.

• The framework serves as an interim step toward a broader U.S.-India Bilateral Trade Agreement (BTA).

• The agreement seeks to diversify supply chains, address trade imbalances, and expand market access.

Indian Commitments and Tariff Reductions

• India has agreed to eliminate or reduce tariffs on various U.S. food and agricultural products, including:

  • Dried grains (DDGs).

  • Red sorghum for animal feed.

  • Tree nuts.

  • Fresh and processed fruits.

  • Soybean oil, wine, and spirits.

United States Commitments and Reciprocal Tariffs

• Under Executive Order $14257$ (issued $2nd\,April\,2025$), the US applied a reciprocal tariff rate of $18\%$ on Indian goods to address trade deficits.

• This tariff applies to Indian exports including textiles, apparel, leather, footwear, plastic and rubber products, home decor, and certain machinery.

• However, under the "Aligned Partners Annex" of Executive Order $14346$ (effective $5th\,September\,2025$), the US eliminated tariffs on specific key sectors:

  • Generic pharmaceuticals.

  • Gems and diamonds.

  • Aircraft parts.

Historical Milestones in US-India Relations

• The US-India civil nuclear agreement was signed during the presidency of George W. Bush.

• The $2+2$ dialogue mechanism between the two nations was formally launched in the year $2018$.