UPSC Prelims Practice Questions — Diversification gains

Q1. The Export Promotion Mission, with an outlay of Rs 25,060 crore, spans how many financial years (FY2025-26 to FY2030-31)?

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

Q2. In the context of India's trade pacts, a 'Comprehensive Economic Partnership Agreement (CEPA)' is best described as an agreement that:

  • A. covers trade in goods along with services, investment and broader economic cooperation
  • B. reduces tariffs only on a limited list of merchandise goods
  • C. is confined solely to liberalising trade in physical goods
  • D. establishes a common external tariff and a shared currency between members

Q3. India's official monthly merchandise trade statistics (such as the April 2026 export figures) are released under the authority of which of the following?

  • A. Ministry of Commerce and Industry, Department of Commerce
  • B. Ministry of Finance, Department of Economic Affairs
  • C. Reserve Bank of India
  • D. Ministry of Statistics and Programme Implementation

Q4. By approximately how many percentage points did Europe's share in India's exports rise between FY24 and FY25?

  • A. 1 percentage point
  • B. 2 percentage points
  • C. 3 percentage points
  • D. 5 percentage points

Q5. As per FY25 data, which one of the following remained India's single largest export destination?

  • A. United States
  • B. United Arab Emirates
  • C. Netherlands
  • D. China

Q6. In trade economics, 'export destination (market) diversification' most precisely refers to:

  • A. expanding the range of countries a nation exports to, reducing dependence on a few markets
  • B. widening the variety of products in a nation's export basket
  • C. raising the value of exports to a nation's existing partner countries
  • D. shifting a nation's exports from merchandise goods towards services

Q7. The Directorate General of Foreign Trade (DGFT), an attached office of the Department of Commerce, is appointed and functions principally under which of the following?

  • A. The Foreign Trade (Development and Regulation) Act, 1992
  • B. The Foreign Exchange Management Act, 1999
  • C. The Customs Act, 1962
  • D. The Foreign Trade Policy Act, 2015

Q8. The FY26 finding that 'at least 20 exporting sectors added 17 or more new destinations, with handloom products reaching 29 more countries' is best interpreted as evidence of:

  • A. geographic (market) diversification of India's exports
  • B. a permanent and complete shift of all Indian exports away from the US and West Asia
  • C. an increase only in the value of exports to India's existing markets
  • D. import substitution achieved across 20 domestic sectors