Q. Consider the following statements:
Statement-I: A majority of gold and silver are imported to India from the United Arab Emirates (UAE).
Statement-II: Under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), India has agreed to reduce silver import duties to 0% over ten years.
Which one of the following is correct in respect of the above statements?
Red Book
Red Book

[A] Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

[B] Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

[C] Statement-I is correct but Statement-II is incorrect

[D] Statement-I is incorrect but Statement-II is correct

Answer: A
Notes:

Explanation –

Statement I is correct. A majority of gold and silver are imported to India from the United Arab Emirates (UAE). India’s imports of gold and silver from the UAE surged 210% in 2023-24 to $10.7 billion.

Statement II is correct. Under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), India has agreed to reduce silver import duties to 0% over 10 years.

Hence, Statement-II explains the significant increase in imports from the UAE, as the reduced duties make it more economically attractive to import silver (and gold) from the UAE, leading to the majority of these imports coming from there.

Source: The Hindu

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