UPSC Prelims Practice Questions — ‘Gulf remittances rose despite West Asia crisis’

Q1. According to official data cited in the Economic Survey, what was the approximate total value of remittance inflows received by India in FY 2024-25 (FY25), the highest for any country in the world?

  • A. USD 135.4 billion
  • B. USD 110.5 billion
  • C. USD 151.7 billion
  • D. USD 68.0 billion

Q2. In India's external-sector statistics, the term 'workers' remittances' most precisely refers to which one of the following?

  • A. Current transfers of earnings sent home by Indian nationals employed abroad, chiefly to households in India
  • B. Repatriated profits and dividends of Indian companies operating overseas
  • C. Foreign portfolio investment routed into Indian markets through NRI accounts
  • D. Concessional development assistance received by India from Gulf governments

Q3. The Gulf Cooperation Council (GCC), historically the principal source region of India's Gulf remittances, is best described as—

  • A. A regional bloc of six Persian Gulf Arab monarchies — Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain
  • B. An organisation comprising all member states of the Arab League
  • C. A grouping of every oil-exporting nation of West Asia, including Iran and Iraq
  • D. A customs union of all Muslim-majority countries of Asia

Q4. How many member countries constitute the Gulf Cooperation Council (GCC), which together accounted for about 38% of India's remittance inflows in FY24?

  • A. 5
  • B. 6
  • C. 7
  • D. 8

Q5. In analysing the resilience of Gulf remittances during the West Asia crisis, the phenomenon of 'precautionary front-loading' of remittances refers to—

  • A. Migrant workers advancing or stepping up money transfers to their families during periods of uncertainty, to secure household finances before conditions potentially worsen
  • B. Gulf employers paying out wages in a lump sum in advance before terminating labour contracts
  • C. The RBI front-loading its foreign-exchange reserves into the market to defend the rupee
  • D. Migrants deliberately postponing transfers to wait for a more favourable exchange rate

Q6. The finding that Gulf remittance inflows to India stayed elevated in Q4 FY26 partly because of precautionary transfers amid geopolitical uncertainty is drawn from balance-of-payments data officially compiled and published by which institution?

  • A. The Reserve Bank of India (RBI)
  • B. The Securities and Exchange Board of India (SEBI)
  • C. NITI Aayog
  • D. The Ministry of Labour and Employment

Q7. Within India's current account, which single component is the LARGEST source of net receipts, with private remittances ranking only second?

  • A. Net services exports (led by software and IT-enabled services)
  • B. Private transfers / workers' remittances
  • C. Net investment (primary) income
  • D. Net merchandise (goods) trade

Q8. With reference to how transactions are classified in India's Balance of Payments, consider the following items claimed to be recorded under 'private transfers' in the current account: 1. Wages remitted home by Indian workers employed in the Gulf 2. Withdrawals from Non-Resident Indian (NRI) deposit accounts 3. External Commercial Borrowings (ECBs) raised by Indian companies 4. Personal gifts and the value of gold/silver brought in as baggage Which of the above is/are NOT correctly recorded under private transfers (current account)?

  1. Wages remitted home by Indian workers employed in the Gulf
  2. Withdrawals from Non-Resident Indian (NRI) deposit accounts
  3. External Commercial Borrowings (ECBs) raised by Indian companies
  4. Personal gifts and the value of gold/silver brought in as baggage
  • A. 1 and 2
  • B. 2 and 4
  • C. 3 and 4
  • D. 3 only

Q9. During the West Asia crisis, the threatened disruption of which single waterway — the world's most important oil-transit chokepoint, carrying roughly a fifth of global oil supply — posed the gravest risk to India's energy security?

  • A. The Strait of Hormuz
  • B. The Suez Canal
  • C. The Bab-el-Mandeb strait
  • D. The Strait of Malacca

Q10. Consider the following statements comparing the two passport-emigration categories under India's overseas-employment framework: 1. Under the Emigration Act, 1983, holders of an 'Emigration Check Required' (ECR) passport need clearance from the Protector of Emigrants to take up employment in notified ECR countries. 2. An 'ECNR' (Emigration Check Not Required) passport is generally issued to persons who have passed matriculation (Class 10) and above, and needs no such clearance for overseas employment. 3. ECR clearance is mandatory even for tourism and business travel to the Gulf, not merely for taking up employment. Which of the statements given above is/are correct?

  1. Under the Emigration Act, 1983, ECR passport holders need clearance from the Protector of Emigrants to take up employment in notified ECR countries.
  2. An ECNR passport is generally issued to those who have passed matriculation and above, and needs no clearance for overseas employment.
  3. ECR clearance is mandatory even for tourism and business travel to the Gulf, not merely for employment.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q11. Consider the following statements regarding recent official reports on remittances: 1. India remained the world's largest recipient of remittances, with about USD 135 billion in FY25. 2. The World Bank's Migration and Development Brief, published every six months, estimated remittances to low- and middle-income countries at around USD 685 billion in 2024. 3. The World Bank flagged that a proposed US remittance tax would have its largest absolute impact on India and Mexico. 4. Private transfers such as workers' remittances are recorded under India's capital account. Which of the above is/are correctly identified?

  1. India remained the world's largest recipient of remittances, with about USD 135 billion in FY25.
  2. The World Bank's Migration and Development Brief, published every six months, estimated remittances to low- and middle-income countries at around USD 685 billion in 2024.
  3. The World Bank flagged that a proposed US remittance tax would have its largest absolute impact on India and Mexico.
  4. Private transfers such as workers' remittances are recorded under India's capital account.
  • A. 1, 2 and 3
  • B. 1, 2 and 4
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q12. Consider the following statements about India's diaspora-engagement architecture: 1. The 18th Pravasi Bharatiya Divas (2025) was hosted at Bhubaneswar, Odisha, with the theme 'Diaspora's Contribution to a Viksit Bharat'. 2. The Pravasi Bharatiya Samman Award conferred at the convention is the highest civilian honour of the Republic of India. 3. Both the Pravasi Bharatiya Divas and the eMigrate emigration-clearance system come under the Ministry of External Affairs. Which of the statements given above is/are correct?

  1. The 18th Pravasi Bharatiya Divas (2025) was hosted at Bhubaneswar, Odisha, with the theme 'Diaspora's Contribution to a Viksit Bharat'.
  2. The Pravasi Bharatiya Samman Award conferred at the convention is the highest civilian honour of the Republic of India.
  3. Both the Pravasi Bharatiya Divas and the eMigrate emigration-clearance system come under the Ministry of External Affairs.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3