UPSC Prelims Practice Questions — ‘Constructive’ trade deal talks held with U.S.: India

Q1. Under the framework for the Interim Agreement announced between India and the United States, India committed to purchase about $500 billion of U.S. energy products, aircraft and parts, precious metals, technology products and coking coal over a period of how many years?

  • A. 3 years
  • B. 5 years
  • C. 10 years
  • D. 15 years

Q2. Which institution delivered the February 2026 ruling that invalidated the reciprocal tariffs imposed on Indian and other trading partners' goods, thereby stalling the scheduled signing of the India–U.S. Interim Agreement?

  • A. The Office of the U.S. Trade Representative
  • B. The U.S. Court of International Trade
  • C. The Supreme Court of the United States
  • D. The U.S. Federal Trade Commission

Q3. In striking down the President's reciprocal tariffs under the IEEPA, the U.S. Supreme Court relied on the 'major questions doctrine'. Which one of the following best describes this doctrine?

  • A. Courts will not presume that Congress delegated authority over questions of vast economic and political significance to the executive without clear and explicit statutory authorization
  • B. Only the Supreme Court, and never lower courts, may decide constitutional questions of national importance
  • C. The President has inherent emergency powers over all matters of foreign commerce that courts must always defer to
  • D. Any executive action affecting more than one country must first be ratified by a two-thirds majority of the Senate

Q4. Under the framework Interim Agreement announced in February 2026, the headline reciprocal/overall U.S. tariff on Indian goods was to be brought down to which single rate?

  • A. 10 percent
  • B. 15 percent
  • C. 18 percent
  • D. 25 percent

Q5. In the context of the recent U.S. tariff actions on Indian goods, what does a 'reciprocal tariff' most precisely mean?

  • A. A duty imposed by an importing country calibrated to match the tariff and market-access barriers that the trading partner applies to its own goods
  • B. A uniform duty that every WTO member is legally required to charge on all imports regardless of origin
  • C. A tariff levied by the exporting country on its own outbound shipments to raise revenue
  • D. A duty fixed jointly by the World Trade Organization and applied equally to all developing countries

Q6. For the United States, which single body leads the international trade negotiations, including those for the Bilateral Trade Agreement with India, as the President's principal adviser on trade policy?

  • A. The U.S. Department of the Treasury
  • B. The Office of the U.S. Trade Representative
  • C. The U.S. Department of State
  • D. The U.S. Department of Commerce

Q7. Consider the following statements about the Office of the U.S. Trade Representative (USTR): 1. It is the President's principal adviser on international trade policy. 2. It conducts international trade negotiations for the United States. 3. It represents the United States at the World Trade Organization. 4. It is the agency that physically assesses and collects customs duties at U.S. ports of entry. Which of the above is/are NOT correct?

  1. It is the President's principal adviser on international trade policy.
  2. It conducts international trade negotiations for the United States.
  3. It represents the United States at the World Trade Organization.
  4. It is the agency that physically assesses and collects customs duties at U.S. ports of entry.
  • A. 1 and 2
  • B. 2 and 3
  • C. 4 only
  • D. 3 and 4

Q8. 'Technical Barriers to Trade (TBT)', one of the negotiation heads in the India–U.S. talks, most precisely refers to which of the following?

  • A. Technical regulations, standards, and conformity-assessment (testing and certification) procedures that can restrict trade without being tariffs
  • B. Import duties levied specifically on high-technology and electronic goods
  • C. Physical infrastructure bottlenecks such as inadequate port and road capacity that slow the movement of goods
  • D. Quantitative ceilings on the value of technology products a country may import in a year

Q9. Consider the following statements comparing India's recent trade agreements: 1. The India–UAE CEPA came into force in 2022, whereas the India–EFTA TEPA entered into force in 2025. 2. Unlike the India–UAE CEPA and the India–Australia ECTA, which are already in force, the India–U.S. Bilateral Trade Agreement is still under negotiation. 3. The India–EFTA TEPA entered into force on 1 October 2024. Which of the statements given above is/are correct?

  1. The India–UAE CEPA came into force in 2022, whereas the India–EFTA TEPA entered into force in 2025.
  2. Unlike the India–UAE CEPA and the India–Australia ECTA, which are already in force, the India–U.S. Bilateral Trade Agreement is still under negotiation.
  3. The India–EFTA TEPA entered into force on 1 October 2024.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q10. The 'Most-Favoured-Nation (MFN)' principle of the WTO, embodied in Article I of GATT 1994, is best defined as which of the following?

  • A. Any trade advantage a member grants to one trading partner must be extended immediately and unconditionally to all other WTO members
  • B. Imported goods, once inside a market, must be treated no less favourably than domestically produced like goods
  • C. A single country may be designated the 'most favoured' partner and given exclusive preferential tariffs by another member
  • D. Developed members must grant duty-free access to all imports from least-developed countries