External Sector of Economy

71. Which one of the following is not correct in the context of balance of

Which one of the following is not correct in the context of balance of payments of India during 2013-2014?

[amp_mcq option1=”India’s exports were less than its imports” option2=”Trade balance was negative” option3=”Net invisibles were positive” option4=”Capital account balance was negative” correct=”option4″]

This question was previously asked in
UPSC NDA-2 – 2015
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The correct answer is D) Capital account balance was negative. Based on official data for India’s balance of payments during the financial year 2013-2014, India had a significant trade deficit (exports were less than imports, leading to a negative trade balance). Net invisibles (services, transfers, income) were positive, helping to offset part of the trade deficit. Crucially, the capital account recorded a *surplus* (positive balance), driven by foreign investments and other capital inflows, which helped finance the current account deficit. Therefore, the statement that the Capital account balance was negative is incorrect.
In 2013-14, India experienced a current account deficit financed by a surplus in the capital account.
For 2013-14, India’s trade deficit was around $137.5 billion. Net invisibles surplus was around $93.4 billion, resulting in a current account deficit of $44.1 billion. The capital account surplus was around $48.0 billion, which covered the current account deficit and led to an overall increase in foreign exchange reserves.

72. In a first, India is to export BrahMos missile to

In a first, India is to export BrahMos missile to

[amp_mcq option1=”Bhutan” option2=”Philippines” option3=”Maldives” option4=”Nepal” correct=”option2″]

This question was previously asked in
UPSC NDA-1 – 2022
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India is to export the BrahMos missile to the Philippines.
In January 2022, India signed a deal worth USD 375 million with the Philippines for the supply of the shore-based anti-ship variant of the BrahMos supersonic cruise missile. This marked India’s first major defence export order for the BrahMos missile system.
BrahMos is a joint venture between India’s Defence Research and Development Organisation (DRDO) and Russia’s NPO Mashinostroyeniya (NPOM). It is one of the fastest supersonic cruise missiles in the world.

73. As per the data up to November, 2020, released by the Union Finance Mi

As per the data up to November, 2020, released by the Union Finance Ministry, which one of the following countries ranks 1 in terms of ODI (Outward Direct Investment) for the year 2020 – 21 ?

[amp_mcq option1=”USA” option2=”Singapore” option3=”Mauritius” option4=”United Kingdom” correct=”option2″]

This question was previously asked in
UPSC NDA-1 – 2021
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As per data available for the period up to November 2020 and for the financial year 2020-21, Singapore emerged as a major destination for India’s Outward Direct Investment (ODI).
Reports from the Reserve Bank of India (RBI) and the Ministry of Finance during this period indicated significant outflows of investment from India to Singapore, often placing it at or near the top of the list of destination countries for ODI.
Outward Direct Investment refers to investments made by a company or individual from one country into business interests located in another country. For India, major destinations for ODI often include countries like Singapore, USA, Mauritius, and the UK, influenced by factors such as business environment, taxation treaties, and market opportunities. While rankings can fluctuate month-to-month, data up to November 2020 frequently showed Singapore as a leading destination.

74. Which one among the following countries is the largest trading partner

Which one among the following countries is the largest trading partner of India in external trade for the year 2015-2016 ?

[amp_mcq option1=”United States of America” option2=”United Kingdom” option3=”United Arab Emirates” option4=”China” correct=”option4″]

This question was previously asked in
UPSC NDA-1 – 2017
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China was the largest trading partner of India in external trade for the year 2015-2016.
Based on official trade data from the Ministry of Commerce and Industry, Government of India, for the fiscal year 2015-2016, China was India’s largest trading partner in terms of total trade turnover (exports + imports). The trade value with China significantly exceeded that with the United States, United Arab Emirates, or the United Kingdom in that period.
India’s major trading partners can fluctuate over time based on geopolitical and economic factors. While the US is often a major destination for Indian exports, the volume of imports from China typically makes it the largest overall trading partner in many recent years, including 2015-2016.

75. Which of the following is/are not FDI policy change(s) after 2010? 1.

Which of the following is/are not FDI policy change(s) after 2010?
1. Permission of 100 percent FDI in the automotive sector.
2. Permitting foreign airlines to make FDI up to 49 percent.
3. Permission of up to 51 percent FDI under the government approval route in multi-brand retailing, subject to specified conditions.
4. Amendment of policy on FDI in single-brand product retail trading for aligning with global practices.

[amp_mcq option1=”1 only” option2=”2 and 4 only” option3=”1 and 2 only” option4=”1, 2 and 3 only” correct=”option1″]

This question was previously asked in
UPSC NDA-1 – 2016
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The question asks which statement describes a policy that was *not* a change after 2010.
Statement 1: Permission of 100% FDI in the automotive sector was already permitted under the automatic route well before 2010. Therefore, this was not a policy change *after* 2010.
Statement 2: Permitting foreign airlines to make FDI up to 49% in domestic carriers was a policy change implemented in September 2012. This occurred *after* 2010.
Statement 3: Permitting up to 51% FDI under the government approval route in multi-brand retail was a policy change implemented in September 2012. This occurred *after* 2010.
Statement 4: Amendment of policy on FDI in single-brand retail trading for aligning with global practices has seen changes *after* 2010 (e.g., further liberalization to 100% under automatic route with certain conditions).

Thus, only statement 1 describes a policy situation that existed before 2010 and was not a *new* change after 2010 among the options listed.

– FDI policies are frequently reviewed and amended by the Government of India.
– Specific sector caps and approval routes change over time.
– 100% FDI in the automotive sector under the automatic route has been a longstanding policy.
– Permitting FDI in sectors like multi-brand retail and by foreign airlines were significant policy shifts made after 2010.
FDI policy changes are announced by the Department for Promotion of Industry and Internal Trade (DPIIT) and are a key aspect of India’s economic reforms. The dates mentioned for statements 2 and 3 (September 2012) mark significant liberalization steps in those sectors. Subsequent amendments in single-brand retail also occurred after 2010, making statement 4 a change after 2010 as well.

76. Devaluation of currency will be more beneficial if prices of

Devaluation of currency will be more beneficial if prices of

[amp_mcq option1=”domestic goods remain constant” option2=”exports become cheaper to importers” option3=”imports remain constant” option4=”exports rise proportionately” correct=”option1″]

This question was previously asked in
UPSC CDS-2 – 2017
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Devaluation of currency will be more beneficial if prices of domestic goods remain constant.
– Devaluation lowers the foreign currency price of exports, making them cheaper and more attractive to foreign buyers.
– It increases the domestic currency price of imports, making them more expensive and less attractive to domestic buyers.
– The benefit of devaluation, primarily increased export competitiveness, is maximized if domestic costs and prices (especially of exportable goods) do not rise significantly.
– If domestic prices remain constant, the reduction in the foreign currency price of exports fully translates into a competitive advantage. If domestic prices rise, this advantage is eroded, making the devaluation less beneficial.
Option B describes a direct consequence of devaluation, not a condition that makes it *more* beneficial. Option C is incorrect as devaluation makes imports more expensive in domestic currency. Option D describes a desired outcome, not a condition on prices enhancing the benefit. Stable domestic prices (Option A) help preserve the competitive edge gained by devaluation.

77. Which one of the following institutions is not in the ‘World Bank Gr

Which one of the following institutions is not in the ‘World Bank Group’ ?

[amp_mcq option1=”International Centre for Settlement of Investment Disputes (ICSID)” option2=”Multilateral Investment Guarantee Agency (MIGA)” option3=”Investment Policy Framework for Sustainable Development (IPFSD)” option4=”International Finance Corporation (IFC)” correct=”option3″]

This question was previously asked in
UPSC Geoscientist – 2024
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The ‘World Bank Group’ consists of five international organizations: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID). The Investment Policy Framework for Sustainable Development (IPFSD) is a set of guidelines or principles related to investment policy, often developed or promoted by international bodies like UNCTAD, but it is not one of the constituent institutions of the World Bank Group. Therefore, IPFSD is not in the World Bank Group.
– World Bank Group members: IBRD, IDA, IFC, MIGA, ICSID.
– IBRD & IDA together are often referred to as “the World Bank”, providing financing to governments.
– IFC finances private sector development.
– MIGA provides political risk insurance and credit enhancement.
– ICSID resolves international investment disputes.
– IPFSD is a framework, not an institution.
The World Bank Group is a family of international financial institutions that provide loans, grants, and advice to developing countries and facilitate investment and trade. Each of the five institutions has a distinct role but works together towards the WBG’s goals.

78. Consider the following statements: 1. The Regional Comprehensive Eco

Consider the following statements:

  • 1. The Regional Comprehensive Economic Partnership (RCEP) is the world’s biggest free trade deal.
  • 2. India is a member of the RCEP.

Which of the statements given above is/are correct?

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option1″]

This question was previously asked in
UPSC Geoscientist – 2022
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Statement 1 is correct: The Regional Comprehensive Economic Partnership (RCEP) is considered the world’s largest free trade agreement, covering about 30% of the world’s population and GDP.
Statement 2 is incorrect: India participated in the RCEP negotiations for many years but decided not to join the agreement in November 2019 due to concerns about potential impacts on its domestic industries and agriculture.
RCEP was signed in November 2020 by 15 countries, including the ten ASEAN member states and five of their major trading partners: Australia, China, Japan, New Zealand, and South Korea. India remains outside the agreement but has the option to join later.

79. G-20 is a forum of countries that intends to promote global economic s

G-20 is a forum of countries that intends to promote global economic stability and sustainable growth. Which among the following group of countries DOES NOT form a part of the forum?

[amp_mcq option1=”Argentina, South Africa, Turkey” option2=”Australia, Brazil, India” option3=”Italy, United Kingdom, Indonesia” option4=”Ireland, New Zealand, Sweden” correct=”option4″]

This question was previously asked in
UPSC Geoscientist – 2021
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The group of countries consisting of Ireland, New Zealand, and Sweden does not form a part of the G20 forum. The G20 comprises 19 countries and the European Union.
The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the European Union.
The G20 was established in 1999 in response to the financial crises of the late 1990s and is a forum for international cooperation on the most important aspects of the international financial and economic agenda. Its members account for a large majority of the world’s gross domestic product, international trade, and population.

80. Which one of the following countries is NOT a member of SAFTA (South A

Which one of the following countries is NOT a member of SAFTA (South Asian Free Trade Agreement)?

[amp_mcq option1=”India” option2=”Bangladesh” option3=”Myanmar” option4=”Pakistan” correct=”option3″]

This question was previously asked in
UPSC Geoscientist – 2021
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Myanmar is not a member country of the South Asian Free Trade Area (SAFTA).
SAFTA comprises the member states of the South Asian Association for Regional Cooperation (SAARC).
The SAARC member countries are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Myanmar is a Southeast Asian country.
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