UPSC Prelims Practice Questions — ‘Geopolitical tensions point to elevated risks, policy uncertainty’
Q1. Which one of the following is the nodal Indian agency that leads negotiations of Free Trade Agreements such as the recently concluded India-EU FTA and the India-GCC FTA?
- 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. In the context of the RBI Monetary Policy Committee's October 2025 resolution, the 'neutral' stance retained by the MPC is best described as:
- A. A commitment to keep the policy repo rate unchanged for at least the next four consecutive meetings
- B. A position that gives the MPC the flexibility to move the policy repo rate in either direction depending on incoming data and the evolving outlook
- C. An explicit bias toward withdrawal of accommodation while remaining supportive of growth
- D. A directive to inject durable liquidity into the banking system to bring the call money rate below the repo rate
Q3. As highlighted by the RBI Bulletin (January 2026) and the Department of Commerce, India is currently engaged in active Free Trade Agreement negotiations with how many countries/groups (covering nearly 50 nations)?
Q4. Which one of the following Free Trade Agreements, concluded in 2026, was officially described by the Government of India as a 'strategic breakthrough' and hailed as the 'Mother of All Deals' for India's global trade engagement?
- A. India-United Kingdom Comprehensive Economic and Trade Agreement
- B. India-EFTA Trade and Economic Partnership Agreement
- C. India-European Union Free Trade Agreement
- D. India-Oman Comprehensive Economic Partnership Agreement
Q5. With reference to India's trade-diversification responses to the geo-economic risks flagged in the RBI Bulletin (January 2026), consider the following statements:
1. The India-EU Free Trade Agreement was jointly announced as concluded at the 16th India-EU Summit on 27 January 2026.
2. The framework for an India-United States Interim Trade Agreement, announced on 7 February 2026, targets expanding bilateral trade to USD 500 billion by 2030.
3. The Terms of Reference for the India-Gulf Cooperation Council Free Trade Agreement were signed in November 2025, prior to the conclusion of the India-EU FTA.
Which of the statements given above is/are correct?
- The India-EU Free Trade Agreement was jointly announced as concluded at the 16th India-EU Summit on 27 January 2026.
- The framework for an India-United States Interim Trade Agreement, announced on 7 February 2026, targets expanding bilateral trade to USD 500 billion by 2030.
- The Terms of Reference for the India-Gulf Cooperation Council Free Trade Agreement were signed in November 2025, prior to the conclusion of the India-EU FTA.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3