UPSC Prelims Practice Questions — India lays out tariffs and quotas for U.K. vehicles under trade deal

Q1. Ahead of the entry into force of the India-UK CETA, the detailed schedule of quotas and concessional tariff rates for the import of completely built units (CBUs) of U.K. automobiles was notified by which of the following bodies?

  • A. Directorate General of Foreign Trade (DGFT)
  • B. Central Board of Indirect Taxes and Customs (CBIC)
  • C. Directorate General of Trade Remedies (DGTR)
  • D. Bureau of Indian Standards (BIS)

Q2. With reference to the India-U.K. Comprehensive Economic and Trade Agreement (CETA), consider the following statements: 1. It provides for concessional duties on trade in goods, including automobiles. 2. It includes commitments on government procurement and trade in services. 3. It incorporates a Double Contribution Convention on social security. 4. It establishes a common external tariff to be applied by India and the U.K. against third countries. Which of the statements given above is/are NOT correct?

  1. It provides for concessional duties on trade in goods, including automobiles.
  2. It includes commitments on government procurement and trade in services.
  3. It incorporates a Double Contribution Convention on social security.
  4. It establishes a common external tariff to be applied by India and the U.K. against third countries.
  • A. 1 and 2
  • B. 2 and 3
  • C. 4 only
  • D. 3 and 4

Q3. Under the DGFT public notice operationalising the CETA automobile tariff-rate quota, who is eligible to apply for an allocation of the quota for U.K. vehicle imports?

  • A. Only Original Equipment Manufacturers (OEMs) and dealers/channel partners duly authorised by the OEMs
  • B. Any registered importer holding an Import-Export Code
  • C. Only Indian automobile manufacturers with domestic production facilities
  • D. Only the U.K. exporting company through its Indian embassy

Q4. In the context of the CETA automobile schedule, the phrase 'tariff-rate quota' most precisely refers to which one of the following?

  • A. A lower concessional duty applied to imports up to a specified annual volume, with a higher duty applying to quantities beyond that volume
  • B. A complete prohibition on imports once a fixed annual quantity of vehicles has been reached
  • C. A single flat rate of duty applied uniformly to all imported vehicles irrespective of quantity
  • D. A cash subsidy paid to importers in proportion to the number of vehicles imported

Q5. With reference to the treatment of vehicles under the CETA automobile schedule, consider the following statements: 1. Petrol and diesel passenger vehicles receive concessional duty from Year 1, whereas electric, hybrid and hydrogen vehicles receive no concession during Years 1 to 5. 2. The tariff concession for conventional vehicles is graded by engine size, whereas that for electric/hybrid vehicles is graded by vehicle price band. 3. Electric vehicles priced below GBP 40,000 receive the deepest duty concession from Year 1. Which of the statements given above is/are correct?

  1. Petrol and diesel passenger vehicles receive concessional duty from Year 1, whereas electric, hybrid and hydrogen vehicles receive no concession during Years 1 to 5.
  2. The tariff concession for conventional vehicles is graded by engine size, whereas that for electric/hybrid vehicles is graded by vehicle price band.
  3. Electric vehicles priced below GBP 40,000 receive the deepest duty concession from Year 1.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q6. Regarding the treatment of electric, hybrid and hydrogen vehicles under the CETA schedule, consider the following statements: 1. From Year 6, vehicles priced between GBP 40,000 and GBP 80,000 attract a 50% duty within a quota of 400 units. 2. From Year 6, vehicles priced above GBP 80,000 attract a 40% duty within a quota of 4,000 units. 3. Electric vehicles priced below GBP 40,000 are permanently excluded from any tariff concession. 4. Electric and hybrid vehicles reach their 10% duty floor by Year 5, the same year as conventional vehicles. Which of the above is/are correctly identified?

  1. From Year 6, vehicles priced between GBP 40,000 and GBP 80,000 attract a 50% duty within a quota of 400 units.
  2. From Year 6, vehicles priced above GBP 80,000 attract a 40% duty within a quota of 4,000 units.
  3. Electric vehicles priced below GBP 40,000 are permanently excluded from any tariff concession.
  4. Electric and hybrid vehicles reach their 10% duty floor by Year 5, the same year as conventional vehicles.
  • A. 1, 2 and 3
  • B. 1 and 4 only
  • C. 2 and 3 only
  • D. 1, 2, 3 and 4

Q7. Which one of the following most accurately describes the Directorate General of Foreign Trade (DGFT)?

  • A. An attached office of the Ministry of Commerce & Industry responsible for formulating and implementing India's Foreign Trade Policy
  • B. A statutory regulator under the Reserve Bank of India that manages foreign exchange for trade
  • C. A wing of the Central Board of Indirect Taxes and Customs that assesses customs duty at ports
  • D. A division of the Ministry of External Affairs that negotiates and signs trade treaties

Q8. The Directorate General of Foreign Trade derives its statutory authority to regulate and develop India's foreign trade primarily from which one of the following?

  • A. The Foreign Trade (Development and Regulation) Act, 1992
  • B. The Customs Act, 1962
  • C. The Foreign Exchange Management Act, 1999
  • D. The Imports and Exports (Control) Act, 1947

Q9. With reference to tariff-rate quotas (TRQs) in the WTO framework, consider the following statements: 1. Under a TRQ, a lower in-quota tariff applies to imports within a set volume, while a higher out-of-quota tariff applies to imports beyond it. 2. Unlike an absolute import quota, a TRQ still permits imports beyond the threshold quantity, but at the higher duty. 3. TRQs were introduced as a WTO instrument for the first time at the 2013 Bali Ministerial Conference. Which of the statements given above is/are correct?

  1. Under a TRQ, a lower in-quota tariff applies to imports within a set volume, while a higher out-of-quota tariff applies to imports beyond it.
  2. Unlike an absolute import quota, a TRQ still permits imports beyond the threshold quantity, but at the higher duty.
  3. TRQs were introduced as a WTO instrument for the first time at the 2013 Bali Ministerial Conference.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q10. Consider the following as characteristics of a tariff-rate quota (TRQ): 1. It sets a lower rate of duty for a specified in-quota volume of imports. 2. It applies a higher rate of duty to quantities imported beyond the quota volume. 3. It was established as a market-access mechanism during the Uruguay Round negotiations. 4. It prohibits any further imports once the in-quota volume has been exhausted. Which of the above is/are NOT correct?

  1. It sets a lower rate of duty for a specified in-quota volume of imports.
  2. It applies a higher rate of duty to quantities imported beyond the quota volume.
  3. It was established as a market-access mechanism during the Uruguay Round negotiations.
  4. It prohibits any further imports once the in-quota volume has been exhausted.
  • A. 1 and 3
  • B. 2 only
  • C. 3 and 4
  • D. 4 only

Q11. With reference to India's recent free trade agreements, consider the following statements: 1. The India-U.K. CETA is India's first comprehensive free trade agreement with a G-7 economy. 2. India signed the EFTA Trade and Economic Partnership Agreement (in March 2024) before it signed the U.K. CETA (in July 2025). 3. The India-U.K. CETA entered into force earlier than the India-EFTA TEPA. Which of the statements given above is/are correct?

  1. The India-U.K. CETA is India's first comprehensive free trade agreement with a G-7 economy.
  2. India signed the EFTA Trade and Economic Partnership Agreement (in March 2024) before it signed the U.K. CETA (in July 2025).
  3. The India-U.K. CETA entered into force earlier than the India-EFTA TEPA.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q12. With reference to the non-goods components of the India-U.K. CETA package, consider the following statements: 1. The Double Contribution Convention exempts Indian workers on temporary U.K. assignments, and their employers, from U.K. social security contributions. 2. The Double Contribution Convention enters into force alongside CETA on 15 July 2026. 3. CETA includes commitments on trade in services and the mobility of professionals. 4. Under the Double Contribution Convention, such Indian workers are also exempted from U.K. income tax for the duration of their assignment. Which of the following is/are correctly identified?

  1. The Double Contribution Convention exempts Indian workers on temporary U.K. assignments, and their employers, from U.K. social security contributions.
  2. The Double Contribution Convention enters into force alongside CETA on 15 July 2026.
  3. CETA includes commitments on trade in services and the mobility of professionals.
  4. Under the Double Contribution Convention, such Indian workers are also exempted from U.K. income tax for the duration of their assignment.
  • A. 1, 2 and 3
  • B. 1 and 4 only
  • C. 2, 3 and 4
  • D. 1, 2, 3 and 4