Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Q4. “Economic diplomacy often acts as a stabilising instrument after periods of diplomatic friction”. Examine this observation in the context of recent India–Canada relations. Discuss the potential of trade agreements in rebuilding strategic trust. (10 M)
Difficulty Level: Medium
Reference: NIE
Why the question
Recent efforts by India and Canada in 2025–26 to restore diplomatic engagement and revive negotiations on a Comprehensive Economic Partnership Agreement (CEPA) after a period of diplomatic tension highlight the role of economic diplomacy in stabilising bilateral relations.
Key Demand of the question
The question requires examining how economic diplomacy functions as a stabilising mechanism during periods of diplomatic friction, particularly in the context of India–Canada relations. It also demands discussion on how trade agreements can help rebuild strategic trust and long-term cooperation between countries.
Structure of the Answer
Introduction
Briefly explain the concept of economic diplomacy as a tool of foreign policy used to rebuild engagement and restore confidence between states.Body
- Economic diplomacy stabilising relations: Mention how economic engagement such as trade talks or sectoral cooperation can reopen diplomatic dialogue and reduce tensions in the India–Canada context.
- Trade agreements rebuilding strategic trust: Mention how institutionalised trade frameworks such as CEPA can deepen economic interdependence and create long-term trust between the two countries.
Conclusion
Conclude by emphasising that sustained economic cooperation can convert temporary diplomatic resets into stable long-term strategic partnerships.
