Mains · GS2 · International Relations
India and its Neighbourhood
3 questions worth 35 marks, from 2017 to 2024.
2017
1 question2017 · Q910 marks150 words
"China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia." In the light of this statement, discuss its impact on India as her neighbour.
Show the model answerHide the model answer
In 2025 Chinese curbs on rare earth magnet exports stalled Indian car production. The same trade that supplies India also gives Beijing leverage over it.
How the surplus becomes power
The surplus funds the capability: China's trade surplus with India is close to a hundred billion dollars. Its defence budget is the world's second largest.
Lending buys access: Loans under the Belt and Road Initiative (BRI) produced port rights at Hambantota and a base at Djibouti.
What it means for India
Dependence in critical sectors: Bulk drugs, electronic components and solar modules come largely from China, so a supply decision becomes policy.
Pressure on the neighbourhood: Debt in Sri Lanka, the Maldives and Nepal converts into political weight nearby.
Capacity on the border: Surplus revenue funded roads and airstrips opposite eastern Ladakh, which changed the balance after Galwan.
The deficit is not merely commercial, since it finances the capability that constrains India. Reducing dependence in critical inputs matters more than reducing the trade gap itself.
Show how the answer was builtHide how the answer was built
Decode
Discuss the impact on India, taking the statement as the starting premise.
Implicit demand
Show the chain from trade surplus to military capability, and then to India.
Architecture
The hook → how the surplus becomes power → what it means for India → verdict.
Articulation
Anchor: the rare earth curbs, the trade surplus, BRI ports, Galwan. Money line: the deficit finances the capability that constrains India.
Show value added materialHide value added material
The economic picture
India's trade deficit with China has widened steadily, and is now close to a hundred billion dollars.
Around seventy per cent of bulk drug ingredients used by Indian pharmaceutical firms are imported from China.
Solar modules, telecom equipment and electronic components show similar concentration.
China restricted rare earth magnet exports in 2025, which affected automobile and electronics production.
Press Note 3 of 2020 requires government approval for investment from countries sharing a land border.
The strategic picture
Hambantota port in Sri Lanka was leased for ninety nine years after a debt restructuring.
Gwadar in Pakistan and the base at Djibouti extend naval reach into the Indian Ocean.
The China Pakistan Economic Corridor passes through territory India claims.
Infrastructure and border villages opposite eastern Ladakh followed the standoff of 2020.
China's defence budget is several times India's, and the gap has widened over a decade.
India's response
Production Linked Incentive schemes target electronics, pharmaceuticals and solar manufacturing.
The National Critical Mineral Mission and KABIL address mineral dependence.
Quad and the Indo Pacific Oceans Initiative build maritime partnerships.
Neighbourhood lines of credit and connectivity projects answer the lending competition.
Diversification is slow, since Chinese inputs remain cheaper for most Indian manufacturers.
2022
1 question2022 · Q910 marks150 words
'India is an age-old friend of Sri Lanka.' Discuss India's role in the recent crisis in Sri Lanka in the light of the preceding statement.
Show the model answerHide the model answer
Sri Lanka ran out of fuel and foreign exchange in 2022. India extended about $4 billion in credit and swaps while other lenders waited.
What India did in the crisis
Immediate relief: Credit lines for fuel, food and fertiliser, plus deferred payments, kept imports moving.
Debt resolution: India co chaired the creditors committee with Japan and France, clearing the way for the International Monetary Fund programme.
How ties developed since
Digital and financial links: Payments through UPI began in 2024, and India funds the digital identity project.
Energy and connectivity: The Sampur solar plant, work at Trincomalee and a proposed grid link tie the economies together.
Political continuity: President Dissanayake made India his first foreign visit in December 2024, and a defence agreement followed.
Fishermen and China: Arrests of trawler crews and Chinese research vessels at Sri Lankan ports remain irritants.
India acted as a neighbour first and a creditor second. The test now is delivering projects on time, since goodwill fades without follow through.
Show how the answer was builtHide how the answer was built
Decode
Discuss India's role in the crisis, and test it against the claim of age old friendship.
Implicit demand
The examiner wants concrete assistance figures, not sentiment, and an honest note on the frictions that persist.
Architecture
A hook with the $4 billion figure → what India did → how ties developed after the crisis → frictions → verdict.
Articulation
Anchor: $4 billion in 2022, the creditors committee with Japan and France, UPI in 2024, the visit of December 2024, the defence agreement. Money line: India acted as a neighbour first and a creditor second.
Show value added materialHide value added material
The crisis and India's response
Sri Lanka defaulted on its external debt in April 2022 after a collapse in reserves, and the government fell in July 2022.
India's support included a $400 million currency swap, a $500 million credit line for petroleum, a $1 billion commodity line and a fertiliser line.
India also deferred about $510 million of trade liabilities under the Asian Clearing Union.
The International Monetary Fund approved a programme in March 2023 after financing assurances from creditors, with India among the first to give them.
Bilateral trade is about $5.5 billion, with a large surplus in India's favour.
The new agenda
India funds the Unique Digital Identity project with about ₹450 crore and trains Sri Lankan officials in electronic governance.
The Sampur solar power project and a proposed electricity grid interconnection would link the two power systems.
A multi product petroleum pipeline and development of the Trincomalee oil tank farm are under discussion.
Prime Minister Modi visited Colombo in April 2025, when a defence cooperation memorandum was signed.
India supplied fuel to Sri Lanka again during the global supply squeeze of 2026.
Persistent issues
The fishermen question in the Palk Bay, including bottom trawling and the status of Katchatheevu, recurs every season.
Devolution under the thirteenth amendment to Sri Lanka's constitution and the rights of Tamils remain unresolved.
Chinese investment in Hambantota and Colombo Port City, and visits by research vessels, shape India's security calculations.
Delays in Indian funded projects have drawn criticism in Colombo, while some Indian proposals face local opposition.
India's Neighbourhood First policy and the SAGAR vision place Sri Lanka at the centre of maritime cooperation.
2024
1 question2024 · Q2015 marks250 words
Discuss the geopolitical and geostrategic importance of Maldives for India with a focus on global trade and energy flows. Further also discuss how this relationship affects India's maritime security and regional stability amidst international competition?
Show the model answerHide the model answer
Modi was guest of honour at the Maldives' sixtieth independence day in July 2025. Two years earlier a government had been elected there on an India Out platform.
Why the location matters
It sits astride the sea lanes: The eight degree channel carries much of the trade moving between the Gulf and East Asia.
India's supply lines pass by: Most Indian oil arrives by sea from West Asia, and 2026 showed how thin that margin is.
A listening post: An atoll chain spread over 900 kilometres offers surveillance reach no land base can match.
It anchors the neighbourhood: With Sri Lanka and Mauritius it completes India's presence under the MAHASAGAR vision.
How the relationship works now
Money bought back goodwill: India gave a credit line of ₹4,850 crore in 2025 and cut annual debt servicing to $29 million.
Liquidity support: A swap of $400 million and ₹30 billion was agreed in 2024, and Male drew the rupee window in 2026.
Capacity and trade: India trains the defence force, funds harbours and housing, and began trade talks in 2025.
Competition and risk
China is present: A defence agreement in 2024 and calls by research vessels show Male has alternatives.
Politics can turn: The Indian military presence became an election issue in 2023, so dependence on one leader is unwise.
The Maldives matters because India's trade and energy pass its doorstep. Steady delivery and economic ties keep it a partner, while a military footprint would revive the politics that pushed it away.
Show how the answer was builtHide how the answer was built
Decode
Two questions: the geopolitical and geostrategic importance, and the effect on maritime security and regional stability amid competition. Both must be answered.
Implicit demand
Trade and energy flows are named in the question, so the sea lanes must be explained rather than assumed, with recent assistance figures as evidence of the reset.
Architecture
A hook from the visit of 2025 → why the location matters → how the relationship works now → competition and risk → verdict.
Articulation
Anchor: the one and a half degree channel, the credit line of ₹4,850 crore, debt servicing cut from $51 million to $29 million, the rupee swap drawn in 2026, the Chinese defence agreement of 2024. Money line: the Maldives matters because India's trade and energy pass its doorstep.
Show value added materialHide value added material
Geography and trade
The Maldives has about 1,190 islands spread over 90,000 square kilometres of ocean, across the main east west shipping routes.
The one and a half degree channel and the eight degree channel are among the busiest sea lanes in the Indian Ocean.
India's seaborne trade and most of its crude imports pass through these waters, which makes their security a national interest.
The Maldives is a member of the Colombo Security Conclave along with India, Sri Lanka, Mauritius and Bangladesh.
India remains among the largest sources of tourists and of essential supplies, including food and construction material under a quota arrangement.
The recent record
The government elected in 2023 asked Indian military personnel to leave, and they were replaced by civilian technical teams by May 2024.
The state visit of October 2024 produced a vision document for a comprehensive economic and maritime security partnership.
The visit of July 2025 brought a concessional line of credit of ₹4,850 crore, six memoranda, 3,300 housing units and vehicles for the defence force.
An amendment to the debt agreements cut annual repayment on Indian credit lines by about 40 per cent.
In 2026 the Maldives settled the dollar swap and drew on the rupee facility, and the two sides aim to sign a trade agreement by the end of the year.
India funds the Ekatha harbour at Uthuru Thila Falhu, which is a coastguard facility, not an Indian base.
Security and competition
China signed a military assistance agreement with the Maldives in March 2024 and has sought port calls for survey vessels.
Indian assistance includes radar coverage, a dornier aircraft, helicopters and joint exercises such as Ekuverin and Ekatha.
The MAHASAGAR vision announced in 2025 extends the earlier SAGAR framework of security and growth for the region.
Maritime domain awareness through the Information Fusion Centre at Gurugram covers the region.
Climate change is an existential issue for a low lying state, and Indian assistance on water and renewable energy carries weight.
Lessons from Sri Lanka apply: delayed projects and visible military presence create political backlash, while economic delivery endures.