INTEGRATED MAINS AND PRELIMS MENTORSHIP (IMPM) 2025 Daily KEY
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European Free Trade Association (EFTA) and Sixth Schedule of the Indian Constitution its significance for the UPSC Exam? Why are topics like Capital Expenditure , Consumer Price Index (CPI), Mahatma Gandhi Natural Rural Employment Act (MGNREGA) important for both preliminary and main exams? Discover more insights in the UPSC Exam Notes for October 13, 2025 |
For Preliminary Examination: Current events of national and international Significance like Free Trade agreement
For Mains Examination: GS II - International relations
Context:
British Prime Minister Keir Starmer’s visit to Mumbai this week, the new trade and investment pact with the EFTA countries, and the ongoing trade talks with the EU in Brussels together signal the steady rise of Europe in India’s diplomacy.
Read about:
European Free Trade Association (EFTA)
Free trade agreement (FTA)
Key takeaways:
- The European Free Trade Association (EFTA) is an intergovernmental organization established in 1960 as an alternative to the European Economic Community (EEC), which later became the European Union (EU). Its main purpose is to promote free trade and economic integration among its member countries without requiring them to join the EU.
- The founding idea behind EFTA was to provide a platform for countries that wanted to enjoy the benefits of trade liberalization in Europe but did not wish to participate in the deeper political and economic union envisioned by the EEC.
- While many of its original members later joined the EU, the current EFTA membership includes Iceland, Liechtenstein, Norway, and Switzerland.
- EFTA works to remove tariffs and trade barriers among its members and to negotiate free trade agreements (FTAs) with other countries and regional blocs around the world. This allows its members to access global markets on favorable terms while maintaining their own national trade policies.
- Notably, three of the four EFTA members — Iceland, Liechtenstein, and Norway — are also part of the European Economic Area (EEA), which gives them access to the EU’s single market while remaining outside the EU’s customs union and political institutions. Switzerland, on the other hand, has chosen to maintain a separate set of bilateral agreements with the EU to regulate its trade and cooperation.
- In essence, EFTA represents a model of economic cooperation based on sovereignty and flexibility, enabling small but advanced economies to participate in global trade networks without full EU membership. It plays a significant role in promoting open markets, economic stability, and cooperation among European and global trading partners
Additional Information
- India achieved independence during the turbulent period of the Cold War, when two competing economic systems — capitalism and socialism — were shaping global politics. Emerging from years of colonial exploitation, India deliberately chose to remain non-aligned, avoiding formal association with either bloc.
- Instead, the country pursued a balanced and pragmatic economic approach, blending features of both capitalist and socialist models to suit its distinctive developmental needs.
- After years of limited engagement, India has renewed its focus on Europe, at a time when the continent itself is beginning to redefine its global role — moving away from being merely an extension of the United States within the broader “collective West.”
- Since the Second World War, the notion of “the West” has implied a political and strategic unity dominated by American power, with Europe and J