UPSC Prelims Practice Questions — The U.S. trade deal — gains from economic diplomacy

Q1. With reference to the India–U.S. Bilateral Trade Agreement framework announced in February 2026, consider the following Indian agricultural exports: 1. Spices 2. Coffee 3. Dairy products 4. Mangoes Which of the above are correctly identified as products granted zero reciprocal tariff access in the United States market under this deal?

  1. Spices
  2. Coffee
  3. Dairy products
  4. Mangoes
  • A. 1, 2 and 3 only
  • B. 1, 2 and 4 only
  • C. 2, 3 and 4 only
  • D. 1, 2, 3 and 4

Q2. Under the India–U.S. interim Bilateral Trade Agreement framework announced in February 2026, what is the reduced reciprocal tariff rate that the United States will apply on covered Indian goods?

  • A. 15%
  • B. 18%
  • C. 25%
  • D. 26%

Q3. With reference to the evolution of the U.S. reciprocal tariff on India between April 2025 and the interim trade deal of February 2026, consider the following statements: 1. The initial discounted reciprocal tariff of 26% on India was imposed by the Office of the United States Trade Representative (USTR) by a notification under the Trade Act. 2. The February 2026 framework reduced the reciprocal tariff on covered Indian goods to 18%. 3. In exchange, India agreed to eliminate or reduce duties on a range of U.S. agricultural items including dried distillers' grains (DDGs), red sorghum and soybean oil. Which of the statements given above is/are correct?

  1. The initial discounted reciprocal tariff of 26% on India was imposed by the Office of the United States Trade Representative (USTR) by a notification under the Trade Act.
  2. The February 2026 framework reduced the reciprocal tariff on covered Indian goods to 18%.
  3. In exchange, India agreed to eliminate or reduce duties on a range of U.S. agricultural items including dried distillers' grains (DDGs), red sorghum and soybean oil.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. In the context of the India–U.S. Bilateral Trade Agreement framework (2025–26), the term "reciprocal tariff" specifically refers to which one of the following?

  • A. An additional import duty imposed by the United States under Executive Order 14257 (April 2025) intended to mirror the tariff and non-tariff barriers maintained by its trading partners
  • B. A tariff jointly fixed by the WTO Trade Negotiations Committee based on average Most-Favoured-Nation (MFN) rates
  • C. A retaliatory countervailing duty levied as a remedy under WTO dispute settlement procedures
  • D. A preferential tariff concession extended by the United States under the Generalized System of Preferences (GSP)