UPSC Prelims Marathon 8 October - External Sector of India-III

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Dear Friends,

We are posting prelims marathon MCQs for today. In this initiative, you can attempt 10 subjectwise MCQs daily. Daily Quiz UPSC Prelims Marathon 8 October External Sector of India-III

For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

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Marking Pattern

Correct Answer : 2

Wrong Answer : -0.66

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CHOOSE A QUESTION

Time Left :5

Question No. 1

With reference to the General Anti-Avoidance Rule (GAAR) in India, consider the following statements:
1.GAAR empowers tax authorities to recharacterize transactions that lack commercial substance primarily to obtain tax benefits.
2.It applies exclusively to domestic taxpayers and does not cover cross-border arrangements involving foreign entities.
Which of the statements given above is/are correct?

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Question No. 2

With reference to External Commercial Borrowings (ECBs) by Indian entities, which of the following risks is/are associated with an appreciation of the Indian Rupee against the currency of borrowing?
1.Increased debt servicing cost in Rupee terms.
2.Loss on hedging instruments taken to mitigate currency depreciation risk.
3.Translation loss on foreign currency-denominated assets on the entity’s balance sheet.
Select the correct answer using the code given below:

A1 only

B2 only

C1 and 3 only

D2 and 3 only

Question No. 3

The South Asian Free Trade Area (SAFTA) agreement provides for a “Sensitive List.” Consider the following statements regarding this list in the context of India’s external trade:
1.Products included in the Sensitive List are exempt from the tariff reduction schedule under SAFTA.
2.India’s Sensitive List under SAFTA is the same for both Least Developed Countries (LDCs) and Non-Least Developed Countries (Non-LDCs) within the SAARC region.
3.The purpose of the Sensitive List is to protect the domestic industry and agriculture of the member countries from sudden import surges.
Which of the statements given above is/are correct?

A1 only

B3 only

C1 and 3 only

D1, 2 and 3

Question No. 4

Consider the following statements with regard to Early Harvest Scheme (EHS) in India’s Free Trade Agreements:
1.EHS typically covers a limited set of tariff lines for immediate duty reductions as a precursor to a comprehensive FTA.
2.The India-Thailand EHS, signed in 2004, focuses exclusively on trade in agricultural goods.
3.EHS provisions often include safeguards against import surges in sensitive sectors.
Which of the statements given above is/are correct?

A1 and 2 only

B1 and 3 only

C2 and 3 only

D1, 2 and 3

Question No. 5

In the context of India’s Comprehensive Economic Cooperation Agreement (CECA) with Singapore, which of the following sectors are comprehensively covered?
1.Trade in goods and services
2.Investment protection and facilitation
3.Movement of natural persons for business purposes
Select the correct answer using the code given below:

A1 and 2 only

B2 and 3 only

C1 and 3 only

D1, 2 and 3

Question No. 6

With reference to the Regional Comprehensive Economic Partnership (RCEP), consider the following statements:
1.India opted out of RCEP negotiations in November 2019 due to concerns over trade deficits with China.
2.RCEP comprises 10 ASEAN countries plus five others, including Japan and South Korea.
3.The agreement entered into force in 2022 and covers about 30% of global GDP.
4.India retains an open invitation to rejoin without needing to renegotiate terms.
Which of the statements given above is/are correct?

A1 and 2 only

B1, 2 and 3 only

C2 and 4 only

D1, 3 and 4 only

Question No. 7

Consider the following agreements under India’s external trade framework:
1.Bilateral Trade and Investment Agreement (BTIA) with the EU
2.Comprehensive Economic Partnership Agreement (CEPA) with UAE
3.Comprehensive Economic Cooperation Agreement (CECA) with Australia
How many of the above are currently under active negotiations as of 2025?

AOnly one

BOnly two

COnly three

DNone

Question No. 8

With reference to the Global System of Trade Preferences (GSTP) among developing countries, “GSTP facilitates reciprocal tariff concessions on a non-reciprocal basis for least developed participants” is most accurately described as:

AA multilateral framework under WTO

BA preferential trade arrangement outside WTO

CAn investment promotion scheme

DA services liberalization pact

Question No. 9

Consider the following statements regarding the impact of rising crude oil prices on India’s external sector in 2025:
1.It exacerbates the current account deficit due to higher import bills.
2.It contributes to domestic inflation through pass-through to fuel and commodity prices.
3.It enhances the competitiveness of India’s petroleum exports globally.
How many of the above statements are correct?

AOnly one

BOnly two

CAll the three

DNone

Question No. 10

Consider the following statements with regard to India’s Foreign Trade Policy 2023:
1.It introduces an amnesty scheme allowing one-time settlement for exporters with defaulted export obligations.
2.E-commerce exports are recognized with hubs to facilitate small shipments up to ₹10 lakh per consignment.
3.The policy extends validity of status holder certificates from five to lifetime.
Which of the statements given above is/are correct?

A1 and 2 only

B2 and 3 only

C1 and 3 only

D1, 2 and 3

Total Number of Questions :

Total Not Attempted Questions :

Total Correct :

Total Wrong :

For schedule, refer to the archive link given below. Best UPSC institute In Delhi,

For the Prelims Marathon archive – click here,

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