UPSC Indian Economy – Chapter 20: Foreign Trade and Trade Policy (32 MCQs)
UPSC Indian Economy – Chapter 20: Foreign Trade and Trade Policy (32 MCQs) – 32 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.
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India's total exports of goods and services in 2025-26 were about:
Correct Answer: A [US$ 863 billion]
Explanation:
US$ 863.1 billion (revised data, May 2026).
India's largest agricultural import by value in recent years has been:
Correct Answer: D [vegetable oils]
Explanation:
Vegetable (edible) oils, mainly palm, soybean and sunflower oil, are India's largest agricultural import by value.
The Foreign Trade Policy 2023 differs from earlier policies because it:
Correct Answer: A [has no end date]
Explanation:
Unlike earlier five-year policies, FTP 2023, effective 1 April 2023, has no end date and is updated as needed.
The Export Promotion Mission approved in November 2025 has two sub-schemes:
Correct Answer: D [Niryat Protsahan and Niryat Disha]
Explanation:
The Cabinet approved the ₹25,060 crore Mission on 12 November 2025 with sub-schemes Niryat Protsahan and Niryat Disha.
A duty imposed on imports sold below their normal value in the exporting country is a:
Correct Answer: A [anti-dumping duty]
Explanation:
Dumping means exporting below normal value; DGTR recommends anti-dumping duty to offset that price gap.
The India–UK Comprehensive Economic and Trade Agreement came into force on:
Correct Answer: B [15 July 2026]
Explanation:
The India–UK CETA, signed on 24 July 2025, entered into force on 15 July 2026.
Consider the following statements:
1. India–EFTA TEPA came into force in 2025.
2. India–Oman CEPA came into force in 2026.
3. India is a member of RCEP.
Which of the statements given above are correct?
Correct Answer: C [1 and 2 only]
Explanation:
TEPA took effect on 1 October 2025 and the Oman CEPA on 1 June 2026; India stayed out of RCEP.
India's first trade agreement with an African country is with:
Correct Answer: B [Mauritius]
Explanation:
CECPA, 2021.
Under the WTO Agreement on Agriculture, the de minimis limit of trade-distorting support for developing countries is:
Correct Answer: A [10 per cent of the value of production]
Explanation:
Developing countries may give product- and non-product-specific trade-distorting support up to 10 per cent of production value.
Subsidies for agricultural research and extension fall in the:
Correct Answer: D [green box]
Explanation:
Research, extension and similar general services cause minimal trade distortion, so they qualify for the green box.
Assertion (A): India seeks a permanent solution on public stockholding at the WTO.
Reason (R): The peace clause agreed at Bali in 2013 was an interim protection for food-security stocks.
Correct Answer: A [Both A and R are true, and R is the correct explanation of A]
Explanation:
Both are true, and because the Bali peace clause is only interim, India seeks a permanent solution on public stockholding.
In the India – Solar Cells dispute (2016), India's domestic-content requirements were held inconsistent with:
Correct Answer: C [GATT national treatment and TRIMS]
Explanation:
The Appellate Body (2016) held the domestic-content rules inconsistent with GATT Article III:4 national treatment and TRIMS Article 2.1.
The WTO's 14th Ministerial Conference (2026) was held at:
Correct Answer: B [Yaoundé]
Explanation:
The WTO's 14th Ministerial Conference was held at Yaoundé, Cameroon, in March 2026.
Which of the following are WTO agreements?
1. Trade Facilitation Agreement
2. Agreement on Sanitary and Phytosanitary Measures
3. Agreement on Trade-Related Investment Measures
Select the correct answer:
Correct Answer: D [1, 2 and 3]
Explanation:
The TFA, the SPS Agreement and TRIMS are all agreements administered by the WTO.
Arrange the following in chronological order:
1. India–UAE CEPA in force
2. Geographical Indications Act enacted
3. SEZ Act enacted
4. India–UK CETA in force
Select the correct answer:
Correct Answer: C [2-3-1-4]
Explanation:
1999, 2005, 2022, 2026.
After the US Supreme Court struck down the IEEPA tariffs in February 2026, the US applied to Indian goods a temporary tariff of:
Correct Answer: B [10 per cent]
Explanation:
After the IEEPA ruling, a 10 per cent Section 122 surcharge applied from 24 February 2026.
The Baba Kalyani Committee (2018) dealt with:
Correct Answer: C [the SEZ policy]
Explanation:
it recommended 'Employment and Economic Enclaves'; DESH followed in 2022.
TRIMS under the WTO apply to:
Correct Answer: B [trade in goods only]
Explanation:
TRIMS cover only investment measures that affect trade in goods; services come under GATS.
The Foreign Trade Policy 2023 sets a target for India's exports of goods and services by 2030 of:
Correct Answer: C [US$ 2 trillion]
Explanation:
US$ 2 trillion by 2030.
India's Foreign Trade Policy is notified by the:
Correct Answer: D [Directorate General of Foreign Trade]
Explanation:
under the Ministry of Commerce and Industry.
Consider the following statements:
1. India is a member of the International Grains Council.
2. A country needs to be a member of the International Grains Council for exporting or importing rice and wheat.
Which of the statements given above is/are correct?
Correct Answer: A [1 only]
Explanation:
India is a member of the International Grains Council, but IGC membership is not required to trade rice or wheat.
Consider the following statements:
1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. "Textile and textile articles" constitute an important item of the trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
Correct Answer: B [2 only]
Explanation:
Textiles are a major item of India–Bangladesh trade; Sri Lanka trade did not rise steadily and Bangladesh, not Nepal, leads.
With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?
1. Quantitative restrictions on imports by foreign investors are prohibited.
2. They apply to investment measures related to trade in both goods and services.
3. They are not concerned with the regulation of foreign investment.
Select the correct answer using the code given below:
Correct Answer: C [1 and 3 only]
Explanation:
TRIMS ban quantitative restrictions on foreign investors' imports and do not regulate foreign investment; they cover goods only.
Term 'West Texas Intermediate', sometimes found in news, refers to a grade of
Correct Answer: A [Crude oil]
Explanation:
West Texas Intermediate is a light, sweet US crude oil used as a global oil price benchmark.
Among the following, which one is the largest exporter of rice in the world in the last five years?
Correct Answer: B [India]
Explanation:
India has been the world's largest rice exporter, ahead of Thailand and Vietnam.
Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?
Correct Answer: D [Vegetable oils]
Explanation:
Vegetable oils have been India's costliest agricultural import, far above pulses, fruits and spices.
Consider the following statements:
1. The quantity of imported edible oils is more than the domestic production of edible oils in the last five years.
2. The Government does not impose any customs duty on all the imported edible oils as a special case.
Which of the statements given above is/are correct?
Correct Answer: A [1 only]
Explanation:
India imports more edible oil than it produces, but customs duty is levied on imported edible oils.
Consider the following countries:
1. Australia
2. Canada
3. China
4. India
5. Japan
6. USA
Which of the above are among the 'free-trade partners' of ASEAN?
Correct Answer: C [1, 3, 4 and 5]
Explanation:
Australia, China, India and Japan all have FTAs with ASEAN; Canada and the USA do not.
India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to
Correct Answer: D [WTO]
Explanation:
TRIPS.
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO's Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
Correct Answer: A [1 and 2 only]
Explanation:
India ratified the TFA, which was part of the 2013 Bali package; it entered into force in February 2017, not January 2016.
In the context of which of the following do you sometimes find the terms 'amber box, blue box and green box' in the news?
Correct Answer: A [WTO affairs]
Explanation:
Amber, blue and green boxes classify farm subsidies under the WTO Agreement on Agriculture.
The terms 'Agreement on Agriculture', 'Agreement on the Application of Sanitary and Phytosanitary Measures' and 'Peace Clause' appear in the news frequently in the context of the affairs of the
Correct Answer: C [World Trade Organisation]
Explanation:
The Agreement on Agriculture, the SPS Agreement and the peace clause all belong to the WTO.
➤ Full notes, maps, tables, a reason for every option and Mains PYQs – U15 · Indian Economy (UPSC book, ₹249): www.shanmugamiasacademy.in/study-materials/upsc-indian-economy
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