UPSC Prelims Practice Questions — India to sign U.S. deal only after clarity on rates

Q1. With reference to the negotiations on the India–United States Bilateral Trade Agreement (BTA), which one of the following is the nodal Indian agency leading the negotiations?

  • A. Ministry of External Affairs
  • B. Department of Economic Affairs, Ministry of Finance
  • C. Department of Commerce, Ministry of Commerce and Industry
  • D. NITI Aayog

Q2. With reference to the recent India–US trade negotiations and U.S. tariff measures in 2026, consider the following statements: 1. The United States Trade Representative initiated Section 301 investigations covering forced labour and excess industrial capacity concerns. 2. The proposed additional Section 301 tariff of 12.5% on Indian imports applies across all product categories including textiles. 3. After IEEPA-based reciprocal tariffs were invalidated, the U.S. imposed a 10% universal tariff under Section 122 of the Trade Act, 1974. 4. The Section 122 universal tariff is scheduled to lapse on 24 July 2026. Which of the statements given above is/are correct?

  1. The United States Trade Representative initiated Section 301 investigations covering forced labour and excess industrial capacity concerns.
  2. The proposed additional Section 301 tariff of 12.5% on Indian imports applies across all product categories including textiles.
  3. After IEEPA-based reciprocal tariffs were invalidated, the U.S. imposed a 10% universal tariff under Section 122 of the Trade Act, 1974.
  4. The Section 122 universal tariff is scheduled to lapse on 24 July 2026.
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 3 and 4 only
  • D. 1, 2, 3 and 4

Q3. With reference to U.S. tariff actions affecting India in 2026, consider the following statements distinguishing Section 122 from Section 301 of the U.S. Trade Act, 1974: 1. Section 122 tariffs are imposed on balance-of-payments grounds, whereas Section 301 tariffs target alleged unfair foreign practices such as forced labour. 2. The Section 122 fallback imposed a uniform 10% duty on imports from all countries, while the proposed Section 301 measure proposes a 12.5% additional duty on a subset of economies including India. 3. Both Section 122 and the proposed Section 301 measure derive their legal authority from the U.S. Trade Act, 1974. Which of the statements given above is/are correct?

  1. Section 122 tariffs are imposed on balance-of-payments grounds, whereas Section 301 tariffs target alleged unfair foreign practices such as forced labour.
  2. The Section 122 fallback imposed a uniform 10% duty on imports from all countries, while the proposed Section 301 measure proposes a 12.5% additional duty on a subset of economies including India.
  3. Both Section 122 and the proposed Section 301 measure derive their legal authority from the U.S. Trade Act, 1974.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. After the U.S. Supreme Court invalidated IEEPA-based 'reciprocal' tariffs in February 2026, the U.S. administration imposed a 10% universal tariff on imports from all countries under which one of the following statutory provisions?

  • A. Section 232 of the Trade Expansion Act, 1962
  • B. Section 201 of the Trade Act, 1974
  • C. Section 301 of the Trade Act, 1974
  • D. Section 122 of the Trade Act, 1974

Q5. With reference to the India–U.S. Bilateral Trade Agreement (BTA) developments in 2026, consider the following statements: 1. India and the United States released a joint statement in February 2026 finalising the framework for the BTA. 2. The proposed additional Section 301 tariff of 12.5% would apply to Indian textile exports. 3. The BTA is being negotiated by India through the Ministry of External Affairs as the nodal agency. 4. The U.S. Supreme Court struck down the IEEPA-based reciprocal tariffs on 20 February 2026. Which of the above is/are NOT correct?

  1. India and the United States released a joint statement in February 2026 finalising the framework for the BTA.
  2. The proposed additional Section 301 tariff of 12.5% would apply to Indian textile exports.
  3. The BTA is being negotiated by India through the Ministry of External Affairs as the nodal agency.
  4. The U.S. Supreme Court struck down the IEEPA-based reciprocal tariffs on 20 February 2026.
  • A. 1 and 3
  • B. 2 and 4
  • C. 2 and 3
  • D. 3 only