MCQs on India’s Foreign Trade Policy: Challenges and Opportunities

1. Which body formulates India’s Foreign Trade Policy (FTP)?

• A) Reserve Bank of India (RBI)
• B) Ministry of External Affairs
• C) Ministry of Commerce and Industry
• D) NITI Aayog
  Answer: C

2. What is the typical time span for India’s Foreign Trade Policy?

• A) 3 years
• B) 5 years
• C) 10 years
• D) 1 year
  Answer: B

3. The Export Promotion Capital Goods (EPCG) scheme aims to:

• A) Provide direct subsidies to exporters.
• B) Allow duty-free imports for export production.
• C) Facilitate foreign direct investment.
• D) Promote the Make in India campaign.
  Answer: B

4. The Merchandise Exports from India Scheme (MEIS) has been replaced by:

• A) SEIS
• B) RoDTEP
• C) EPCG
• D) SEZ
  Answer: B

5. What is the main objective of the Foreign Trade Policy?

• A) Increase defense exports
• B) Enhance India’s export competitiveness
• C) Increase foreign debt
• D) Promote labor migration
  Answer: B

6. SEIS in the context of foreign trade stands for:

• A) Services Export Incentive Scheme
• B) Special Export Incentive Scheme
• C) Sustainable Economic Integration Scheme
• D) Services Export Insurance Scheme
  Answer: A

7. Which of the following sectors has the highest contribution to India’s export earnings?

• A) Agriculture
• B) Services
• C) Mining
• D) Pharmaceuticals
  Answer: B

8. Which of the following is a key challenge for India’s foreign trade?

• A) Lack of domestic consumption
• B) Trade barriers and tariffs
• C) High export subsidies
• D) Low import dependency
  Answer: B

9. What is the focus of the ‘One District, One Product’ (ODOP) initiative in the FTP?

• A) Promote FDI in agriculture
• B) Boost localized export production
• C) Expand urban exports
• D) Reduce import dependence on oil
  Answer: B

10. India’s largest trading partner in terms of exports in recent years has been:

• A) United States
• B) China
• C) United Arab Emirates
• D) Germany
  Answer: A

11. Which scheme supports export credit insurance for exporters?

• A) SEIS
• B) ECGC
• C) EPCG
• D) MEIS
  Answer: B

12. The primary aim of RoDTEP is to:

• A) Provide export subsidies.
• B) Refund duties and taxes on exported products.
• C) Facilitate imports of raw materials.
• D) Reduce tariffs on imports.
  Answer: B

13. What does FTAs stand for in international trade?

• A) Free Trade Areas
• B) Financial Trade Agreements
• C) Free Trade Agreements
• D) Federal Trade Alliances
  Answer: C

14. The Sagarmala project is aimed at:

• A) Enhancing India’s maritime exports.
• B) Promoting domestic agriculture.
• C) Increasing air freight capacities.
• D) Developing landlocked states.
  Answer: A

15. India’s primary export in the IT services sector is:

• A) Hardware
• B) Software and IT-enabled services
• C) Cybersecurity solutions
• D) Telecom equipment
  Answer: B

16. Which Indian ministry negotiates trade agreements with other countries?

• A) Ministry of Finance
• B) Ministry of Commerce and Industry
• C) Ministry of External Affairs
• D) Ministry of Home Affairs
  Answer: B

17. The major objective of the ‘Make in India’ campaign is to:

• A) Reduce exports
• B) Increase imports
• C) Boost domestic manufacturing for exports
• D) Enhance foreign labor migration
  Answer: C

18. India’s trade deficit arises primarily due to:

• A) High import of petroleum products
• B) Decline in software exports
• C) Lack of labor productivity
• D) Over-reliance on agriculture
  Answer: A

19. What is the primary export from India in the pharmaceutical sector?

• A) Vaccines
• B) Active Pharmaceutical Ingredients (APIs)
• C) Medical devices
• D) Healthcare services
  Answer: B

20. India’s Foreign Trade Policy emphasizes MSMEs because:

• A) They contribute significantly to exports.
• B) They focus on agricultural production.
• C) They reduce foreign investment.
• D) They focus only on urban areas.
  Answer: A

21. What is a major challenge for India’s agricultural exports?

• A) Low global demand for Indian grains
• B) High pesticide residues in products
• C) Lack of warehousing infrastructure
• D) Export bans on fruits and vegetables
  Answer: B

22. India’s trade policy with ASEAN is governed by:

• A) RCEP
• B) SAFTA
• C) CECA
• D) BIMSTEC
  Answer: C

23. Which port handles the highest volume of trade in India?

• A) Mumbai Port
• B) Kandla Port
• C) Visakhapatnam Port
• D) Mundra Port
  Answer: D

24. India’s import dependency on China is highest for:

• A) Electronics
• B) Automobiles
• C) Textiles
• D) Pharmaceuticals
  Answer: A

25. A significant opportunity for India’s foreign trade lies in:

• A) Diversifying exports to Africa
• B) Increasing imports from the US
• C) Relying solely on regional trade agreements
• D) Promoting energy exports
  Answer: A

26. The Atma Nirbhar Bharat initiative focuses on:

• A) Self-reliance and reducing import dependency.
• B) Exporting defense equipment.
• C) Encouraging foreign labor migration.
• D) Increasing dependency on FDI.
  Answer: A

27. What is India’s rank in the global trade of agricultural commodities (2023)?

• A) First
• B) Second
• C) Tenth
• D) Fifth
  Answer: D

28. The primary challenge in India’s energy trade is:

• A) Lack of renewable energy infrastructure
• B) High reliance on crude oil imports
• C) Export bans on coal
• D) Declining demand for natural gas
  Answer: B

29. Which Indian state is the largest exporter of marine products?

• A) Kerala
• B) Gujarat
• C) Andhra Pradesh
• D) Tamil Nadu
  Answer: C

30. The Regional Comprehensive Economic Partnership (RCEP) aims to:

• A) Enhance India’s FDI inflows.
• B) Facilitate regional trade partnerships.
• C) Boost India’s textile exports.
• D) Reduce global carbon emissions.
  Answer: B