ABSTRACT
India the largest nation in Asia, with a rich heritage and culture, a democratic political system and enormous ethnic, social and religious diversity, is an important actor in the domain of international relations. The geopolitical and geoeconomic situation following the Cold War and the global economic crisis have determined India's foreign policy. Economic issues and economic stability were the main factors determining foreign policy. The terrorist attacks in Mumbai in 2008, the break-up of the ceasefire in Sri Lanka, the unstable situation in Bangladesh and the weakness of state institutions in Pakistan, and the strengthening of the position of the Taliban in Afghanistan and Pakistan in 2008, demonstrate that the region is highly unstable. India has increased its share in global production, investment, exports and imports of goods, as well as its potential to affect global economic indicators. Trade policy, along with its instruments, has also determined India's foreign policy to an increasing extent.
