UPSC Prelims Practice Questions — To compete with China, India may need China

Q1. Press Note 3 of 2020, as amended by Press Note 2 of 2026, regulates foreign direct investment from countries sharing a land border with India. How many such land-border-sharing countries fall within the ambit of this regime?

  • A. Five
  • B. Six
  • C. Seven
  • D. Eight

Q2. Press Note 2 of 2026, which amends the foreign direct investment regime applicable to investors from countries sharing a land border with India, is issued by:

  • A. Department of Economic Affairs, Ministry of Finance
  • B. Foreign Investment Facilitation Portal under the Invest India agency
  • C. Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
  • D. Reserve Bank of India under the Foreign Exchange Management Act, 1999

Q3. Which one of the following was India's single largest bilateral trading partner (merchandise) in FY 2025-26?

  • A. United States of America
  • B. United Arab Emirates
  • C. People's Republic of China
  • D. Kingdom of Saudi Arabia

Q4. In the context of Press Note 2 of 2026, the term 'non-controlling stake' which qualifies for the eased automatic-route treatment in respect of investors from land border countries is best defined as:

  • A. An equity holding of up to 5 per cent in an Indian company, irrespective of board representation
  • B. An indirect beneficial ownership of up to 10 per cent held through a non-LBC entity, without conferring control, and subject to sectoral caps
  • C. An equity holding of up to 24 per cent that does not entitle the investor to a board seat
  • D. Any minority equity holding below 26 per cent that does not carry veto rights over special resolutions