MCQs on India’s Foreign Trade Policy
- Which year was the Foreign Trade Policy (FTP) of India first introduced?
- A) 1991
- B) 2000
- C) 2015
- D) 2020
Answer: A) 1991
- What is the primary objective of India’s Foreign Trade Policy?
- A) To reduce imports
- B) To promote exports
- C) To increase foreign investments
- D) To control inflation
Answer: B) To promote exports
- Which policy replaced the Export-Import (EXIM) Policy in India?
- A) Make in India
- B) Foreign Trade Policy
- C) Skill India
- D) Digital India
Answer: B) Foreign Trade Policy
- The FTP aims to increase India’s share in global exports to what percentage by 2025?
- A) 3%
- B) 5%
- C) 7%
- D) 10%
Answer: C) 7%
- Which of the following is a key component of the Foreign Trade Policy?
- A) Import Substitution
- B) Export Promotion
- C) Foreign Direct Investment (FDI)
- D) Balance of Payment
Answer: B) Export Promotion
- What is the primary focus of the “Make in India” initiative?
- A) Increasing exports
- B) Boosting domestic manufacturing
- C) Reducing tariffs
- D) Promoting foreign education
Answer: B) Boosting domestic manufacturing
- Which government body is responsible for formulating and implementing India’s Foreign Trade Policy?
- A) Ministry of Finance
- B) Ministry of Commerce and Industry
- C) Reserve Bank of India
- D) Planning Commission
Answer: B) Ministry of Commerce and Industry
- What is the purpose of the Merchandise Exports from India Scheme (MEIS)?
- A) To regulate imports
- B) To provide duty credit scrips to exporters
- C) To control inflation
- D) To promote tourism
Answer: B) To provide duty credit scrips to exporters
- Which of the following is NOT a feature of India’s Foreign Trade Policy?
- A) Simplification of procedures
- B) Focus on skill development
- C) Export promotion councils
- D) Import quotas
Answer: D) Import quotas
- The FTP of 2015 aimed to achieve how much export target by 2020?
- A) USD 300 billion
- B) USD 500 billion
- C) USD 1 trillion
- D) USD 700 billion
Answer: B) USD 500 billion
- Which of the following is a major challenge facing India’s Foreign Trade Policy?
- A) Over-dependence on few commodities
- B) Lack of infrastructure
- C) Trade imbalances
- D) All of the above
Answer: D) All of the above
- The term “Trade Facilitation” in the FTP refers to:
- A) Simplifying trade regulations
- B) Reducing tariffs on imports
- C) Promoting local products
- D) Establishing new trade routes
Answer: A) Simplifying trade regulations
- Which sector is primarily targeted by the “Service Exports from India Scheme (SEIS)”?
- A) Agricultural Sector
- B) Manufacturing Sector
- C) Service Sector
- D) Mining Sector
Answer: C) Service Sector
- What does “Zero Duty Export Promotion Capital Goods (EPCG) Scheme” entail?
- A) Exempting certain exports from taxes
- B) Allowing imports of capital goods at zero duty
- C) Promoting tourism through capital investment
- D) Providing subsidies for agricultural exports
Answer: B) Allowing imports of capital goods at zero duty
- Which country was India’s largest trading partner in 2020-21?
- A) China
- B) USA
- C) UAE
- D) Japan
Answer: B) USA
- The Foreign Trade Policy is typically reviewed and updated every:
- A) Year
- B) Two years
- C) Five years
- D) Ten years
Answer: B) Two years
- What is a significant criticism of India’s Foreign Trade Policy?
- A) Over-regulation of exports
- B) Lack of coherence in policy measures
- C) Focus on large industries only
- D) All of the above
Answer: D) All of the above
- Which of the following is a strategic goal of the FTP 2021-26?
- A) Attracting more foreign tourists
- B) Increasing share of manufacturing in GDP
- C) Enhancing agricultural exports
- D) Strengthening financial institutions
Answer: B) Increasing share of manufacturing in GDP
- Which of the following is an area of concern in India’s Foreign Trade Policy?
- A) Slow export growth
- B) Increasing import dependency
- C) Non-tariff barriers
- D) All of the above
Answer: D) All of the above
- The FTP promotes which of the following schemes to encourage exports of high-value goods?
- A) Import Duty Exemption
- B) Duty Drawback Scheme
- C) Export Incentive Scheme
- D) Quality Control Scheme
Answer: B) Duty Drawback Scheme
- What role does the Directorate General of Foreign Trade (DGFT) play in India’s FTP?
- A) Formulating monetary policy
- B) Monitoring trade practices
- C) Implementing trade policy and regulations
- D) Regulating banking operations
Answer: C) Implementing trade policy and regulations
- Which of the following is a primary aim of the FTP?
- A) Promoting imports
- B) Enhancing foreign reserves
- C) Reducing trade deficits
- D) Promoting ease of doing business
Answer: C) Reducing trade deficits
- Which initiative focuses on fostering innovation in the manufacturing sector under the FTP?
- A) Make in India
- B) Digital India
- C) Startup India
- D) Skill India
Answer: A) Make in India
- The FTP emphasizes the role of which financial instrument to support exporters?
- A) Mutual Funds
- B) Bank Guarantees
- C) Export Credit Insurance
- D) Bonds
Answer: C) Export Credit Insurance
- What is one of the major benefits of India’s Foreign Trade Policy for farmers?
- A) Higher tariffs on agricultural imports
- B) Direct subsidies for crop production
- C) Access to international markets
- D) Government procurement guarantees
Answer: C) Access to international markets
- Which of the following is a limitation of the current Foreign Trade Policy?
- A) Lack of clarity in policies
- B) Absence of technology in exports
- C) High transaction costs
- D) All of the above
Answer: D) All of the above
- What is the target for India’s goods and services exports by 2030 as per recent FTP?
- A) USD 1 trillion
- B) USD 2 trillion
- C) USD 5 trillion
- D) USD 3 trillion
Answer: B) USD 2 trillion
- The ‘Trade Policy Review Mechanism’ is conducted by which international organization?
- A) World Trade Organization (WTO)
- B) International Monetary Fund (IMF)
- C) United Nations (UN)
- D) World Bank
Answer: A) World Trade Organization (WTO)
- Which of the following areas does the FTP seek to promote through ease of doing business?
- A) Import tariffs
- B) Export processes
- C) Banking regulations
- D) Government procurement
Answer: B) Export processes
- Which recent trend has been identified as an opportunity for India’s foreign trade?
- A) De-globalization
- B) Shift towards renewable energy
- C) Increased reliance on traditional trade partners
- D) Decline in technology exports
Answer: B) Shift towards renewable energy
These MCQs are designed to cover a broad understanding of India’s Foreign Trade Policy, its achievements, and the areas of concern.
