External Sector of Economy

61. Which one among the following is the latest nation to join the World T

Which one among the following is the latest nation to join the World Trade Organization (as on March 2013)?

[amp_mcq option1=”North Korea” option2=”China” option3=”Russia” option4=”Tajikistan” correct=”option4″]

This question was previously asked in
UPSC CAPF – 2013
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The correct option is D.
– Tajikistan became the 159th member of the World Trade Organization (WTO) on March 2, 2013.
– China joined the WTO on December 11, 2001.
– Russia joined the WTO on August 22, 2012.
– North Korea is not a member of the WTO.
– Therefore, as of March 2013, Tajikistan was the latest nation to have joined the organization.

62. Which of the following statements is correct with respect to the conve

Which of the following statements is correct with respect to the convertibility of Indian rupee?

[amp_mcq option1=”It is convertible on capital account” option2=”It is convertible on current account” option3=”It is convertible both on current and capital account” option4=”None of the above” correct=”option2″]

This question was previously asked in
UPSC CAPF – 2013
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The correct option is B.
– Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies.
– Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility.
– Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. The Indian Rupee is fully convertible on the current account.
– Capital account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for capital account transactions, which involve cross-border movement of capital, such as investments (FDI, FPI), loans, and acquisition of assets. The Indian Rupee is *not* fully convertible on the capital account; there are restrictions and regulations imposed by the RBI on various capital transactions. India has moved towards greater capital account convertibility but has not achieved full convertibility due to concerns about potential financial instability.
India achieved full current account convertibility in 1994. The journey towards capital account convertibility has been cautious and gradual, guided by various committees (like the Tarapore Committee). The level of capital account convertibility is often described as ‘partial’ or ‘limited’.

63. Which one among the following is the correct descending sequence of In

Which one among the following is the correct descending sequence of India’s import of commodities in terms of value?

[amp_mcq option1=”Capital Goods—Electronic Goods—Food Products—Fertilizers” option2=”Fertilizers—Food Products—Electronic Goods—Chemicals” option3=”Capital Goods—Electronic Goods—Food Products—Chemicals” option4=”Electronic Goods—Capital Goods—Fertilizers—Food Products” correct=”option1″]

This question was previously asked in
UPSC CAPF – 2012
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Based on general trade patterns of India, particularly around the period this question is likely from (early 2010s), the correct descending sequence of import value among the given options is Capital Goods, followed by Electronic Goods, then Food Products, and finally Fertilizers.
– Capital Goods and Electronic Goods typically represent significant portions of India’s import bill, reflecting industrialization, technological needs, and consumer demand.
– While essential, Food Products and Fertilizers imports, while substantial, often rank lower in overall value compared to major industrial inputs and finished goods like Capital and Electronic goods, although their ranking can fluctuate based on domestic production and global prices.
– The provided options reflect broad categories, and precise ranking can vary slightly year-to-year, but Option A aligns best with the general trend of major import categories for India during the period. (Note: Crude Petroleum is usually India’s largest import, but it is not among the options).
India imports a wide variety of goods ranging from energy products (like crude oil and natural gas) to manufactured items, machinery, chemicals, and raw materials. The composition and value of imports are influenced by domestic economic activity, global prices, and specific sector needs.

64. India signed an agreement to avoid double taxation and prevent fiscal

India signed an agreement to avoid double taxation and prevent fiscal evasion with respect to taxes on income on 27th July, 2012 with

[amp_mcq option1=”Japan” option2=”Indonesia” option3=”Sweden” option4=”Bangladesh” correct=”option3″]

This question was previously asked in
UPSC CAPF – 2012
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India signed an agreement for avoidance of double taxation and prevention of fiscal evasion with Sweden on July 27, 2012.
Double Taxation Avoidance Agreements (DTAAs) are signed between countries to prevent income earned in one country from being taxed in both that country and the country of residence. They also include provisions for information exchange to prevent tax evasion. The specific agreement mentioned in the question was indeed signed between India and Sweden on the stated date in New Delhi.
DTAAs are crucial for promoting international trade and investment by providing clarity and certainty on tax matters for businesses and individuals operating across borders. India has signed comprehensive DTAAs with numerous countries.

65. There is a growing internal financial crisis in the US with the possib

There is a growing internal financial crisis in the US with the possibility that there will be de-valuation of the dollar. Which amongst the following countries is/are most affected?

[amp_mcq option1=”India” option2=”China” option3=”European Union” option4=”Japan” correct=”option2″]

This question was previously asked in
UPSC CAPF – 2011
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China is most likely to be significantly affected by a growing internal financial crisis in the US with the possibility of dollar devaluation.
– China holds a very large amount of US dollar-denominated assets, particularly US Treasury securities, as part of its foreign exchange reserves. A devaluation of the dollar would directly reduce the value of these holdings when measured in other currencies.
– China is a major trading partner of the US. A weaker dollar makes Chinese exports to the US more expensive for American buyers and US exports to China cheaper for Chinese buyers, potentially negatively impacting China’s export-oriented economy.
– Other countries like Japan and the EU are also major holders of dollar assets and significant trading partners, but China’s scale of dollar holdings and trade dependency on the US market often makes it the most vulnerable to significant US dollar fluctuations.
The interconnectedness of the global economy means that a major financial crisis in one large economy like the US has ripple effects worldwide. Countries with strong trade links and large holdings of the affected currency are particularly exposed.

66. India has identified ten new hydropower projects for development to ac

India has identified ten new hydropower projects for development to achieve the target of import of 10,000 MW of hydropower from a neighbouring country by 2020. Which is that country ?

[amp_mcq option1=”Bhutan” option2=”Nepal” option3=”Sri Lanka” option4=”Bangladesh” correct=”option1″]

This question was previously asked in
UPSC CAPF – 2011
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India has identified ten new hydropower projects for development to achieve the target of importing 10,000 MW of hydropower from Bhutan by 2020.
India has a long-standing and extensive cooperation with Bhutan in the hydropower sector. India provides financial and technical assistance for building major hydropower projects in Bhutan, and in return, India has the right to buy the surplus power generated from these projects. This cooperation is a significant source of revenue for Bhutan and helps India meet its energy demands. The target of importing 10,000 MW by 2020 is part of this bilateral framework.
Several large hydropower projects have been built or are under construction in Bhutan with Indian assistance, such as Chukha, Tala, Kurichhu, Punatsangchhu I & II, and Mangdechhu. These projects are primarily geared towards power export to India. While India also cooperates with Nepal on hydropower, the scale and specific target mentioned align more closely with the established framework and ongoing projects with Bhutan around the 2011 timeframe.

67. ASEAN (Association of South East Asian Nations) Regional Block consist

ASEAN (Association of South East Asian Nations) Regional Block consists of a number of countries. Which one of the following groups of countries is a part of this block ?

[amp_mcq option1=”India, Pakistan, Sri Lanka, Bangladesh, Thailand, Myanmar” option2=”Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand, Vietnam” option3=”Indonesia, Malaysia, New Zealand, Australia, Philippines, China” option4=”Indonesia, Maldives, Bhutan, Nepal, China, Myanmar” correct=”option2″]

This question was previously asked in
UPSC CAPF – 2011
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The group of countries that is a part of the ASEAN (Association of South East Asian Nations) block among the given options is Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand, Vietnam.
ASEAN comprises ten member states: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Option B lists six of these ten members.
ASEAN was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the founding fathers of ASEAN: Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 7 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.

68. Which one of the following statements about BRIC is not correct?

Which one of the following statements about BRIC is not correct?

[amp_mcq option1=”In the year 2009 the leaders of the BRIC countries held their first summit in Yekaterinburg” option2=”According to Goldman Sachs, the global investment banking and securities firm, the economic potential of BRIC is such that they may become among the four most dominant economies by the year 2050″ option3=”BRIC countries suggests for the Doha round to be accelerated in order to find compromise solutions for radical reductions for multibillion dollar subsidies in the agricultural sector” option4=”Brazil, Russia, India and Canada are the members of BRIC” correct=”option4″]

This question was previously asked in
UPSC CAPF – 2009
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Statement A is correct. The first summit of the BRIC heads of state was held in Yekaterinburg, Russia, on June 16, 2009.
Statement B is correct. Jim O’Neill, the economist at Goldman Sachs, coined the term BRIC and made predictions about the significant economic growth and potential dominance of these countries by 2050.
Statement C is correct. BRIC/BRICS countries have consistently advocated for reforms in the global trade system and often push for the reduction of agricultural subsidies by developed nations within forums like the WTO (Doha Development Agenda).
Statement D is incorrect. BRIC is an acronym for Brazil, Russia, India, and China. Canada is not a member of this grouping. South Africa joined in 2010, expanding the group to BRICS.
Since the question asks for the statement that is *not* correct, option D is the answer.
BRIC (later BRICS) is an association of major emerging national economies. Understanding its member countries, origin, and key positions on global issues is important for international relations and economics.
The BRIC concept was first introduced in 2001 by Jim O’Neill in a Goldman Sachs report titled “Building Better Global Economic BRICs”. The formal political grouping started with the first meeting of Foreign Ministers in 2006 and the first summit in 2009.

69. As per the RBI guidelines, which one of the following is the minimum t

As per the RBI guidelines, which one of the following is the minimum tenure of Masala Bonds that an Indian company can issue offshore ?

[amp_mcq option1=”Five years” option2=”Four years” option3=”Three years” option4=”Two years” correct=”option3″]

This question was previously asked in
UPSC NDA-2 – 2016
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The correct answer is Three years.
As per the Reserve Bank of India (RBI) guidelines for issuing Masala Bonds (INR denominated bonds issued overseas), the minimum maturity period was set at 3 years.
Specifically, RBI guidelines around the time Masala Bonds became prominent stipulated a minimum maturity of 3 years for issues up to USD 50 million equivalent per financial year per issuer. For issues exceeding USD 50 million equivalent, the minimum maturity was set at 5 years. The question asks for the minimum tenure that *an* Indian company can issue, which refers to the lowest possible tenure allowed under the guidelines, which is 3 years.

70. Which one of the following continents accounts for the maximum share i

Which one of the following continents accounts for the maximum share in exports from India?

[amp_mcq option1=”Asia” option2=”Europe” option3=”Africa” option4=”North America” correct=”option1″]

This question was previously asked in
UPSC NDA-2 – 2015
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The correct answer is A) Asia. Historically and in recent decades, the continent of Asia has been the largest destination for India’s exports, accounting for the maximum share compared to Europe, Africa, or North America. This includes significant trade with countries in West Asia, South East Asia (ASEAN), and East Asia.
Asia consistently remains the largest market for Indian exports.
While trade relations with Europe (including the UK post-Brexit), North America (USA), and Africa are also significant and growing, the cumulative share of different Asian regions typically exceeds that of other individual continents. Major export partners in Asia include UAE, Saudi Arabia, Singapore, Hong Kong, China, Bangladesh, etc.
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