UPSC Prelims Practice Questions — India slashed oil imports from U.S. and Russia in Sept.

Q1. With reference to secondary sanctions and secondary tariffs, such as those provided for in recent U.S. legislation on buyers of Russian energy, consider the following statements: Which of the statements given above is/are correct?

  1. They penalise third countries or foreign entities for dealing with the target state, instead of only restricting the sanctioning state's own nationals.
  2. They can be lawfully imposed on a third country only after the UN Security Council authorises them.
  3. A secondary tariff of this kind is charged on the third country's exports to the sanctioning state, not on the target state's oil itself.
  • A. 1 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Although India is not the country that U.S. sanctions under CAATSA are aimed at, India's defence purchases from Russia can expose it to those sanctions.
  2. CAATSA provides for sanctions on any party that carries out significant transactions with Russia's defence and intelligence sectors.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. Consider the following facts about India's crude oil imports in September 2026: total imports were 9.5% higher than in August 2026; the U.S. share was zero; the UAE's share was more than 25%; and Russia and the UAE together accounted for 60% of imports. Which of the following inferences can be validly drawn from these facts alone?

  1. India imported a larger absolute volume of crude from the UAE in September 2026 than in August 2026.
  2. Russia's share of India's crude imports in September 2026 was below 35%.
  3. Suppliers other than Russia and the UAE together accounted for only 40% of India's crude imports in September 2026.
  4. India's crude import dependence fell in September 2026 compared with August 2026.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 3 and 4 only
  • D. 1, 2 and 4 only

Q4. Suppose the price of the Indian crude basket rises sharply while the volume of crude India imports remains unchanged. Consider the following likely consequences: Which of the statements given above is/are correct?

  1. The merchandise trade deficit tends to widen, which puts pressure on the current account deficit.
  2. Oil importers' higher demand for U.S. dollars tends to put depreciating pressure on the rupee.
  3. A depreciating rupee lowers the rupee cost of crude imports and partly offsets the rise in the dollar price.
  4. Where higher fuel prices are passed on to consumers, headline inflation rises directly through fuel and indirectly through transport costs.
  • A. 1 and 2 only
  • B. 2, 3 and 4 only
  • C. 1, 2 and 4 only
  • D. 1, 3 and 4 only

Q5. With reference to India's Strategic Petroleum Reserves (SPR), consider the following statements: Which of the statements given above is/are correct?

  1. Phase I reserves store crude in above-ground steel tanks located inside the premises of public sector refineries.
  2. Because SPR adequacy is measured in days of cover, rising national consumption reduces the days of cover that an unchanged storage capacity provides.
  3. Cavern space cannot be leased to overseas national oil companies, because all crude in a strategic reserve must be owned by the Government of India.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 1 and 3 only
  • D. 2 only

Q6. With reference to demand-side measures for reducing India's exposure to imported crude oil, consider the following statements: Which of the statements given above is/are correct?

  1. Ethanol blending under the National Policy on Biofuels cuts demand for diesel and petrol in the same proportion.
  2. Ethanol blending saves foreign exchange because part of the fuel comes from domestic feedstock such as sugarcane and food grains.
  3. Ethanol blending reduces the volume of crude India needs, but by itself does not change which countries supply the remaining crude.
  4. Electric mobility reduces structural oil demand, while the source of the electricity decides how far emissions fall.
  • A. 2, 3 and 4 only
  • B. 2 and 3 only
  • C. 1, 3 and 4 only
  • D. 1 and 2 only

Q7. With reference to the Reserve Bank of India's framework for settling international trade in Indian rupees through Special Rupee Vostro Accounts (SRVA), consider the following statements: Which of the statements given above is/are correct?

  1. An Indian importer pays in rupees, and the amount is credited to the vostro account of the partner country's correspondent bank.
  2. An Indian exporter can be paid its export proceeds in rupees from the balance in such a vostro account.
  3. Surplus rupee balances in such accounts may be invested in Central Government securities.
  4. The arrangement can be used only with partner countries whose currencies are fully convertible.
  • A. 1, 3 and 4 only
  • B. 1 and 2 only
  • C. 2, 3 and 4 only
  • D. 1, 2 and 3 only

Q8. Consider the following assertion: Settlement of India's crude oil imports in Indian rupees has made slow progress. Which of the following statements support/supports the above assertion?

  1. An oil exporter that runs a large trade surplus with India builds up rupee balances beyond what it can spend on Indian goods and services.
  2. The rupee is not fully convertible on the capital account, so a foreign holder can use rupee balances in fewer ways than dollar balances.
  3. Settling crude imports in rupees would reduce India's need for foreign exchange to pay for oil.
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1 only