UPSC Prelims Practice Questions — ‘India has no excess capacity, bans forced-labour imports’

Q1. With reference to the non-discrimination principles of the World Trade Organization (WTO), consider the following statements: Which of the statements given above is/are correct?

  1. A WTO member that cuts its customs duty on a product from one member must, as a rule, extend the same cut to like products from all other members.
  2. Charging a customs duty on an imported good while levying no equivalent tax on the identical domestically produced good violates the National Treatment principle.
  3. Once an imported good has entered the market, subjecting it to a higher internal tax than an identical domestic good breaches National Treatment rather than the Most-Favoured-Nation principle.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. A WTO member wishes to treat imports from some trading partners differently from imports from others. Consider the following measures: Which of the measures given above would fall within the recognised exceptions to the Most-Favoured-Nation obligation?

  1. Removing tariffs only on goods originating in partners with which it has formed a free trade area
  2. Granting lower tariffs to goods from developing countries under a preferential access scheme
  3. Lowering tariffs on goods from one major partner, outside any free trade area, in return for that partner's commitment to buy more of its exports
  4. Imposing an additional duty on a product from one specific partner after an investigation finds that product is being traded unfairly through dumping
  • A. 1, 2 and 4 only
  • B. 3 and 4 only
  • C. 1 and 2 only
  • D. 1, 2, 3 and 4

Q3. With reference to anti-dumping and countervailing duties under WTO rules, consider the following statements: Which of the statements given above are correct?

  1. The WTO agreements prohibit firms from dumping, and an anti-dumping duty is the penalty for that breach.
  2. An anti-dumping duty responds to an exporting firm's pricing below what it normally charges at home, whereas a countervailing duty responds to support from the exporting country's government or public bodies.
  3. A subsidy that is generally available across the economy, rather than specific to an enterprise, industry or region, is subject to countervailing action in the same way as a specific one.
  4. A countervailing duty can be imposed only after it is shown that subsidised imports are injuring the domestic industry and that there is a causal link between the two.
  • A. 1, 2 and 4 only
  • B. 1 and 3 only
  • C. 2, 3 and 4 only
  • D. 2 and 4 only

Q4. Country P, a WTO member, believes that Country Q, also a member, is violating its obligations under a WTO agreement and that this is hurting P's exporters. Consider the following courses of action open to P: Which of the courses of action given above is/are consistent with P's obligations under the WTO's Dispute Settlement Understanding?

  1. Seeking redress by invoking the rules and procedures of the Dispute Settlement Understanding against Q
  2. Determining, through an investigation under its own domestic trade law, that Q has violated the agreement and then raising tariffs on Q's goods
  3. Determining for itself that Q has violated the agreement, but raising tariffs on Q's goods only after bilateral talks with Q have failed
  • A. 2 and 3 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 1 and 3 only

Q5. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. As of 2026, the WTO Appellate Body remains unable to hear appeals, a situation that began in December 2019.
  2. The WTO General Council voted to suspend the Appellate Body until members agree on a reform of the dispute settlement system.
  • 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

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The General Agreement on Tariffs and Trade expressly lists measures relating to the products of prison labour among its general exceptions.
  2. The 1996 Singapore Ministerial Declaration of the WTO designated the International Labour Organization as the competent body to set and deal with core labour standards.
  • 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

Q7. Suppose a large economy uses government support to sustain manufacturing capacity in a sector far above its domestic demand for several years. Consider the following possible consequences for its trading partners: Which of the consequences given above are likely?

  1. Surplus output is pushed into export markets at depressed prices, raising concerns about dumping.
  2. World prices for the product rise because the supported economy keeps its surplus output off global markets.
  3. Producers in importing countries face price pressure, which may lead their governments to open anti-dumping or countervailing duty investigations.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 and 3 only