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Multiple-choice questions (MCQs) with answers on “India’s Trade Policy: Challenges in a Globalized World”

1. India’s trade policy primarily aims to:

  • a) Enhance domestic production and export competitiveness
  • b) Restrict all foreign trade
  • c) Focus solely on reducing import duties
  • d) Isolate India from global markets

Answer: a) Enhance domestic production and export competitiveness


2. The Foreign Trade Policy (FTP) of India is updated every:

  • a) 5 years
  • b) 3 years
  • c) 10 years
  • d) 2 years

Answer: b) 3 years


3. Which of the following agreements governs India’s trade relations with the European Union?

  • a) Comprehensive Economic Partnership Agreement (CEPA)
  • b) Free Trade Agreement (FTA)
  • c) Bilateral Investment Treaty (BIT)
  • d) Regional Comprehensive Economic Partnership (RCEP)

Answer: b) Free Trade Agreement (FTA)


4. India is a member of which of the following global trade organizations?

  • a) World Trade Organization (WTO)
  • b) International Monetary Fund (IMF)
  • c) World Bank
  • d) Bank for International Settlements (BIS)

Answer: a) World Trade Organization (WTO)


5. Which policy aims to make India a global manufacturing hub?

  • a) Make in India
  • b) Digital India
  • c) Skill India
  • d) Startup India

Answer: a) Make in India


6. The Trade Facilitation Agreement (TFA) under the WTO aims to:

  • a) Simplify and harmonize international trade procedures
  • b) Restrict global trade practices
  • c) Increase tariff barriers
  • d) Limit trade between developing countries

Answer: a) Simplify and harmonize international trade procedures


7. The Goods and Services Tax (GST) in India impacts trade by:

  • a) Streamlining tax structure and reducing tax barriers
  • b) Increasing the number of indirect taxes
  • c) Limiting international trade agreements
  • d) Separating central and state taxation policies

Answer: a) Streamlining tax structure and reducing tax barriers


8. India’s trade policy has historically focused on:

  • a) Import substitution and protectionism
  • b) Complete openness to foreign markets
  • c) Exclusively export promotion
  • d) Eliminating all trade barriers

Answer: a) Import substitution and protectionism


9. Which of the following agreements is India part of that focuses on regional trade?

  • a) South Asian Free Trade Area (SAFTA)
  • b) North American Free Trade Agreement (NAFTA)
  • c) Trans-Pacific Partnership (TPP)
  • d) Central American Free Trade Agreement (CAFTA)

Answer: a) South Asian Free Trade Area (SAFTA)


10. India’s policy of “Look East” primarily aims to:

  • a) Strengthen economic ties with Southeast Asian countries
  • b) Focus on the Western Hemisphere
  • c) Reduce trade with Eastern nations
  • d) Isolate from global trade dynamics

Answer: a) Strengthen economic ties with Southeast Asian countries


11. Which of the following is a challenge faced by India in its trade policy?

  • a) Trade imbalances and deficits
  • b) Excessive trade surpluses
  • c) Over-dependence on local markets
  • d) Complete self-sufficiency in production

Answer: a) Trade imbalances and deficits


12. The Regional Comprehensive Economic Partnership (RCEP) is a trade agreement involving:

  • a) ASEAN countries and six additional countries including India
  • b) Only South Asian countries
  • c) European Union countries
  • d) North American countries

Answer: a) ASEAN countries and six additional countries including India


13. The Make in India initiative is designed to:

  • a) Promote manufacturing and job creation within India
  • b) Encourage only IT and service sectors
  • c) Focus solely on importing foreign goods
  • d) Restrict foreign investments

Answer: a) Promote manufacturing and job creation within India


14. The Trade Policy Review Mechanism (TPRM) of the WTO is intended to:

  • a) Assess and review the trade policies and practices of member countries
  • b) Create new trade barriers
  • c) Exempt countries from trade agreements
  • d) Restrict international trade negotiations

Answer: a) Assess and review the trade policies and practices of member countries


15. India’s Export Credit Guarantee Corporation (ECGC) provides:

  • a) Insurance and credit risk management for exporters
  • b) Financial loans for importers
  • c) Legal aid for trade disputes
  • d) Tax incentives for domestic markets

Answer: a) Insurance and credit risk management for exporters


16. The National Export Insurance Account (NEIA) is aimed at:

  • a) Supporting long-term export credit insurance
  • b) Reducing import duties
  • c) Enhancing local production
  • d) Providing short-term trade credits

Answer: a) Supporting long-term export credit insurance


17. The WTO’s Doha Development Round primarily focuses on:

  • a) Addressing issues related to trade and development for developing countries
  • b) Restricting trade between developed nations
  • c) Promoting only agricultural trade
  • d) Increasing tariffs on all products

Answer: a) Addressing issues related to trade and development for developing countries


18. Which of the following is a significant non-tariff barrier affecting India’s trade?

  • a) Regulatory standards and quotas
  • b) Low import duties
  • c) High foreign investment thresholds
  • d) Open market access

Answer: a) Regulatory standards and quotas


19. India’s trade policy aims to balance:

  • a) Export growth and import needs
  • b) Only reducing imports
  • c) Increasing export subsidies
  • d) Maintaining trade deficits

Answer: a) Export growth and import needs


20. The Export Promotion Councils (EPCs) in India are responsible for:

  • a) Facilitating and promoting the export of goods and services
  • b) Regulating import tariffs
  • c) Monitoring domestic market prices
  • d) Controlling foreign exchange reserves

Answer: a) Facilitating and promoting the export of goods and services


21. Which organization regulates trade disputes between countries within the WTO framework?

  • a) Dispute Settlement Body (DSB)
  • b) International Trade Center (ITC)
  • c) World Bank Group
  • d) United Nations Conference on Trade and Development (UNCTAD)

Answer: a) Dispute Settlement Body (DSB)


22. The India-U.S. Trade Policy Forum aims to:

  • a) Address and resolve bilateral trade issues and enhance trade relations
  • b) Focus exclusively on investment disputes
  • c) Restrict bilateral trade agreements
  • d) Promote only military cooperation

Answer: a) Address and resolve bilateral trade issues and enhance trade relations


23. India’s Intellectual Property Rights (IPR) policies impact trade by:

  • a) Protecting patents and copyrights which can affect trade negotiations and agreements
  • b) Reducing patent protection
  • c) Promoting only local intellectual property
  • d) Ignoring international IP standards

Answer: a) Protecting patents and copyrights which can affect trade negotiations and agreements


24. The Atmanirbhar Bharat initiative focuses on:

  • a) Enhancing self-reliance and reducing dependence on foreign imports
  • b) Increasing foreign aid
  • c) Expanding only service sector exports
  • d) Restricting domestic production

Answer: a) Enhancing self-reliance and reducing dependence on foreign imports


25. Which agreement is India negotiating to enhance trade relations with Australia and New Zealand?

  • a) Comprehensive Economic Cooperation Agreement (CECA)
  • b) Regional Comprehensive Economic Partnership (RCEP)
  • c) Bilateral Investment Treaty (BIT)
  • d) South Asian Free Trade Area (SAFTA)

Answer: a) Comprehensive Economic Cooperation Agreement (CECA)


26. The Trade Facilitation Agreement (TFA) is expected to reduce:

  • a) Trade costs and streamline customs procedures
  • b) Import tariffs
  • c) Export subsidies
  • d) Domestic production

Answer: a) Trade costs and streamline customs procedures


27. India’s trade policy includes measures for:

  • a) Promoting exports and managing imports to ensure trade balance
  • b) Excluding all foreign products
  • c) Ignoring global trade trends
  • d) Only focusing on domestic markets

Answer: a) Promoting exports and managing imports to ensure trade balance


28. Which of the following is a primary goal of India’s trade agreements?

  • a) Enhancing market access for Indian products
  • b) Reducing market access for foreign products
  • c) Limiting foreign investments
  • d) Isolating from global trade practices

Answer: a) Enhancing market access for Indian products


29. India’s Special Economic Zones (SEZs) are designed to:

  • a) Attract foreign investment and promote exports
  • b) Restrict foreign trade and investment
  • c) Limit domestic market expansion
  • d) Focus solely on local industries

Answer: a) Attract foreign investment and promote exports


30. Which of the following is a challenge associated with India’s trade policy in a globalized world?

  • a) Increasing trade protectionism from major trading partners
  • b) Expanding global trade opportunities
  • c) High domestic production capacity
  • d) Perfect trade balance with all partners

Answer: a) Increasing trade protectionism from major trading partners


These questions cover various aspects of India’s trade policy, including challenges, strategies, and international agreements.

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