UPSC Prelims Practice Questions — India’s economic prospects after the West Asian crisis

Q1. In the context of India's response to the closure of the Strait of Hormuz during the 2026 West Asian crisis, which one of the following is the nodal ministry that coordinated measures to secure the country's crude oil supply?

  • A. Ministry of External Affairs
  • B. Ministry of Petroleum and Natural Gas
  • C. Ministry of Ports, Shipping and Waterways
  • D. Ministry of Commerce and Industry

Q2. With reference to the geography of the Strait of Hormuz, consider the following statements: 1. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. 2. Iran lies to the north of the shipping lanes while Oman lies to the south. 3. The main shipping lanes of the strait lie predominantly within Iranian territorial waters. Which of the statements given above is/are correct?

  1. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
  2. Iran lies to the north of the shipping lanes while Oman lies to the south.
  3. The main shipping lanes of the strait lie predominantly within Iranian territorial waters.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q3. The Indian crude oil basket, published daily by the Petroleum Planning and Analysis Cell, is computed as a weighted average of how many distinct international crude oil benchmarks?

  • A. Only one benchmark (Brent alone)
  • B. Two benchmarks
  • C. Three benchmarks
  • D. Four benchmarks

Q4. With reference to the Indian crude oil basket and its March 2026 formula revision, consider the following statements: 1. Its sour-grade component is the average of Oman and Dubai prices, while its sweet-grade component is Dated Brent. 2. In the March 2026 revision, the weight of Dated Brent was raised above 50% for the first time. 3. The basket is compiled and released by the Reserve Bank of India. Which of the statements given above is/are correct?

  1. Its sour-grade component is the average of Oman and Dubai prices, while its sweet-grade component is Dated Brent.
  2. In the March 2026 revision, the weight of Dated Brent was raised above 50% for the first time.
  3. The basket is compiled and released by the Reserve Bank of India.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q5. India's diversification of crude oil sourcing during the 2026 crisis was operationalised chiefly through actual procurement by which one of the following?

  • A. Public-sector Oil Marketing Companies (Oil PSUs)
  • B. The Petroleum Planning and Analysis Cell
  • C. The Directorate General of Hydrocarbons
  • D. The Securities and Exchange Board of India

Q6. As stated in Parliament during the 2026 West Asian crisis, India now imports crude oil from how many countries, compared with 27 in 2006-07?

  • A. 33
  • B. 40
  • C. 45
  • D. 48

Q7. With reference to the preliminary Memorandum of Understanding (MoU) to end the 2026 West Asian crisis, consider the following statements: 1. It provides for safe passage of commercial vessels through the Strait of Hormuz free of charge for a period of 60 days. 2. It sets a 30-day window for the minesweeping/demining of the strait. 3. It was concluded between the United States and Iraq. Which of the statements given above is/are correct?

  1. It provides for safe passage of commercial vessels through the Strait of Hormuz free of charge for a period of 60 days.
  2. It sets a 30-day window for the minesweeping/demining of the strait.
  3. It was concluded between the United States and Iraq.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. The 14-point instrument signed in June 2026 to de-escalate the West Asian crisis and reopen the Strait of Hormuz is best described as which one of the following?

  • A. A preliminary Memorandum of Understanding (MoU) providing for the reopening of the Strait of Hormuz
  • B. A legally binding bilateral defence treaty ratified by both national legislatures
  • C. A United Nations Security Council resolution imposing a mandatory ceasefire
  • D. A permanent free-trade agreement between the two signatories

Q9. With reference to the NSO's national income estimates, which one of the following correctly describes the relationship between Gross Value Added (GVA) and Gross Domestic Product (GDP)?

  • A. GVA is measured at basic prices, and GDP is obtained by adding net product taxes (product taxes minus product subsidies) to GVA.
  • B. GVA is obtained by adding net product taxes to GDP measured at basic prices.
  • C. GVA is always numerically equal to GDP at current prices.
  • D. GVA excludes the contribution of the services sector to output.

Q10. India's structural vulnerability to West Asian supply shocks stems largely from the fact that a rise in the price of which one of the following most directly and heavily inflates its merchandise import bill?

  • A. Gold
  • B. Crude petroleum
  • C. Coal
  • D. Electronic goods

Q11. In its 2026 assessment terming the West Asia conflict the driver of the 'biggest energy price surge in four years', by approximately what percentage did the World Bank project energy prices to rise in 2026?

  • A. 16%
  • B. 24%
  • C. 31%
  • D. 60%

Q12. India's currently operational (Phase-I) strategic crude oil storages under ISPRL are located at how many sites?

  • A. Two
  • B. Three
  • C. Five
  • D. Six