Lesson 10. International Economic Organisations and India’s External Sector

In a globalized world, India’s interaction with the world economy is pivotal. This topic covers the institutions shaping global economic governance: the World Bank, IMF, and WTO. For each, one must know their core functions, governance structures, and India’s relationship with them (including recent issues like Special Drawing Rights allocation, WTO disputes on agriculture and fisheries). The second major part is India’s external sector: composition and direction of foreign trade (major exports and imports, trade balance), concepts of Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) and their policy frameworks, the balance of payments (current and capital account), and the management of foreign exchange reserves. Recent developments like free trade agreements (with UAE, Australia), the push for self-reliance (Atmanirbhar Bharat), and global supply chain shifts are important. Understanding the impact of global events (e.g., the Ukraine war, global inflation) on India’s economy is often tested. Additional Resources: The Ministry of Commerce’s “Export Import Data Bank”, the RBI’s data on BoP and FDI, and the WTO’s Trade Policy Review for India are primary data sources. The World Bank’s “World Development Report”, the IMF’s “World Economic Outlook”, and the WTO’s “World Trade Report” provide the essential global economic context and analysis that UPSC frequently draws upon.