UPSC Prelims Practice Questions — Reducing India’s exposure to U.S. tariff risks
Q1. The temporary 10 per cent ad valorem import surcharge applied by the United States to goods from all its trading partners with effect from 20 February 2026 — a levy that lapsed before the forced-labour duty on India took effect — was imposed under which one of the following authorities?
- A. Section 232 of the U.S. Trade Expansion Act of 1962
- B. Section 201 of the U.S. Trade Act of 1974
- C. Section 122 of the U.S. Trade Act of 1974
- D. Section 338 of the U.S. Tariff Act of 1930
Q2. With reference to the U.S. Section 301 forced-labour measures of 2026 and the Section 122 surcharge that preceded them, consider the following statements:
1. A Section 122 surcharge may not exceed 15 per cent ad valorem and may not remain in force beyond 150 days unless extended by an Act of Congress.
2. The Section 301 forced-labour action covered 60 economies, and the duty finally notified on India was lower than the rate that had been proposed for India in June 2026.
3. The Section 301 duty applies to the entire basket of India's merchandise exports to the United States, leaving no export category outside its scope.
4. Section 122 is invoked on the ground of large and serious balance-of-payments deficits, whereas the 2026 Section 301 action rested on the enforcement of prohibitions on goods made with forced labour.
Which of the statements given above is/are correct?
- A Section 122 surcharge may not exceed 15 per cent ad valorem and may not remain in force beyond 150 days unless extended by an Act of Congress.
- The Section 301 forced-labour action covered 60 economies, and the duty finally notified on India was lower than the rate that had been proposed for India in June 2026.
- The Section 301 duty applies to the entire basket of India's merchandise exports to the United States, leaving no export category outside its scope.
- Section 122 is invoked on the ground of large and serious balance-of-payments deficits, whereas the 2026 Section 301 action rested on the enforcement of prohibitions on goods made with forced labour.
- A. 1, 2 and 4 only
- B. 1 and 3 only
- C. 2, 3 and 4 only
- D. 1, 2, 3 and 4
Q3. Which of the following are correctly identified with respect to India's sourcing of crude oil from Russia?
1. About 2 per cent — the share of Russia in India's crude oil imports before the Russia–Ukraine conflict began in February 2022.
2. About 56 per cent — the share of Russian crude in India's total crude imports in July 2026, which was also a record in volume terms.
3. 8.96 million metric tonnes in May 2026, up from 4.54 million metric tonnes in January 2026 — the near-doubling of India's Russian crude intake within that period.
4. Azerbaijan — the country that displaced Russia as India's single largest supplier of crude oil in August 2026.
Which of the above is/are correctly identified?
- About 2 per cent — the share of Russia in India's crude oil imports before the Russia–Ukraine conflict began in February 2022.
- About 56 per cent — the share of Russian crude in India's total crude imports in July 2026, which was also a record in volume terms.
- 8.96 million metric tonnes in May 2026, up from 4.54 million metric tonnes in January 2026 — the near-doubling of India's Russian crude intake within that period.
- Azerbaijan — the country that displaced Russia as India's single largest supplier of crude oil in August 2026.
- A. 1 and 4 only
- B. 2 and 3 only
- C. 1, 3 and 4 only
- D. 1, 2 and 3 only
Q4. In the context of India's crude oil procurement after February 2022, the strategy described as 'energy diversification' is best understood as which one of the following?
- A. Substituting imported crude with expanded domestic production from the Krishna-Godavari and Mumbai High fields to cut import dependence
- B. Shifting the fuel mix of Indian refineries away from crude oil towards imported liquefied natural gas on long-term contracts
- C. Redirecting a large share of crude purchases towards discounted Russian barrels in order to lower the oil import bill while retaining traditional suppliers
- D. Enlarging the strategic petroleum reserve caverns so that a longer period of consumption is covered by stored crude
Q5. With reference to the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which of the following are correctly identified?
1. China, India, Azerbaijan, Hungary and Slovakia — the countries presently placed among the five largest importers of Russian oil and gas.
2. The United States Department of Energy — the authority required to recalculate the list of the top five purchasers of Russian oil and gas every 180 days.
3. 500 per cent — the tariff rate the Bill would apply to United States imports originating from Russia itself.
4. The Russian 'shadow fleet' of sanctions-evading tankers — a category expressly carved out and exempted from the Bill's sanctions.
Which of the above is/are correctly identified?
- China, India, Azerbaijan, Hungary and Slovakia — the countries presently placed among the five largest importers of Russian oil and gas.
- The United States Department of Energy — the authority required to recalculate the list of the top five purchasers of Russian oil and gas every 180 days.
- 500 per cent — the tariff rate the Bill would apply to United States imports originating from Russia itself.
- The Russian 'shadow fleet' of sanctions-evading tankers — a category expressly carved out and exempted from the Bill's sanctions.
- A. 1 and 2 only
- B. 1 and 3 only
- C. 3 and 4 only
- D. 1, 2 and 3 only
Q6. Consider the following statements comparing the tariff instruments contained in the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026:
1. The maximum secondary tariff the Bill authorises against third countries buying Russian energy was scaled down to 100 per cent from the 500 per cent level originally canvassed for such countries.
2. The secondary tariff is triggered by fresh purchases of Russian oil or gas made after the Bill's enactment, whereas goods imported into the United States from Russia itself face a far higher headline rate.
3. A country is exempt from the secondary tariff if it draws less than 50 per cent of its natural gas from Russia and is reducing such imports.
Which of the statements given above is/are correct?
- The maximum secondary tariff the Bill authorises against third countries buying Russian energy was scaled down to 100 per cent from the 500 per cent level originally canvassed for such countries.
- The secondary tariff is triggered by fresh purchases of Russian oil or gas made after the Bill's enactment, whereas goods imported into the United States from Russia itself face a far higher headline rate.
- A country is exempt from the secondary tariff if it draws less than 50 per cent of its natural gas from Russia and is reducing such imports.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q7. As of early September 2026 the Sanctioning Russia and Iran Act had cleared only one chamber of the U.S. Congress. Assuming it is later passed by the other chamber in identical form but is returned unsigned with objections by the President, it could still become law in which one of the following ways?
- A. Ratification of the measure by the legislatures of three-fourths of the States
- B. Re-passage by a simple majority in both chambers after a ten-day interval
- C. Certification of a concurrent resolution of Congress by the Supreme Court
- D. Re-passage by a two-thirds vote in each of the House of Representatives and the Senate
Q8. A bill that has been passed by both chambers of the U.S. Congress and presented to the President, who neither signs nor returns it while Congress remains in session, becomes law automatically on the expiry of how many days?
- A. Seven days
- B. Ten days
- C. Fourteen days
- D. Thirty days
Q9. Among India's merchandise export sectors assessed for vulnerability to the 2026 United States tariff measures, which one carried the largest value of exports to the United States at risk?
- A. Textiles and apparel
- B. Electrical and mechanical machinery
- C. Gems and jewellery
- D. Marine products and processed seafood
Q10. Consider the following statements regarding the measures available to India for reducing the concentration risk in its export markets:
1. A market-diversification strategy has been framed around 40 target importing countries which together account for more than $590 billion in textile and apparel imports.
2. Export Promotion Councils have been superseded by the Directorate General of Foreign Trade as the sole implementing arm of this diversification strategy.
3. The India–United Kingdom Comprehensive Economic and Trade Agreement entered into force on 15 July 2026, giving India immediate duty-free access on 99 per cent of tariff lines.
4. India's present share in the textile and apparel imports of these 40 target markets stands at over 25 per cent.
Which of the statements given above is/are correct?
- A market-diversification strategy has been framed around 40 target importing countries which together account for more than $590 billion in textile and apparel imports.
- Export Promotion Councils have been superseded by the Directorate General of Foreign Trade as the sole implementing arm of this diversification strategy.
- The India–United Kingdom Comprehensive Economic and Trade Agreement entered into force on 15 July 2026, giving India immediate duty-free access on 99 per cent of tariff lines.
- India's present share in the textile and apparel imports of these 40 target markets stands at over 25 per cent.
- A. 1 and 3 only
- B. 1, 2 and 4 only
- C. 2 and 4 only
- D. 1, 2 and 3 only
Q11. India's merchandise trade surplus with the United States in the financial year 2025-26 was closest to which one of the following figures?
- A. $24.4 billion
- B. $34.4 billion
- C. $40.9 billion
- D. $52.9 billion
Q12. Shortly before the United States' forced-labour duty on Indian goods took effect in late July 2026, India prohibited the import of goods produced wholly or partly through forced labour. This prohibition was operationalised through a gazette notification issued by which one of the following?
- A. The Central Board of Indirect Taxes and Customs, by amending the First Schedule to the Customs Tariff Act
- B. The Ministry of Labour and Employment, by framing rules under the Bonded Labour System (Abolition) Act
- C. The Directorate General of Trade Remedies, by issuing a safeguard measure notification
- D. The Directorate General of Foreign Trade, by amending the Foreign Trade Policy, 2023