UPSC Prelims Practice Questions — Southern African Customs bloc, India revive trade talks
Q1. Which one of the following correctly describes the 'common revenue pool' operated under the Southern African Customs Union?
- A. Customs and excise duties collected by all member states are paid into a single pool and then distributed among the members, the pool being administered by South Africa
- B. Each member retains the duties it collects at its own borders and contributes a fixed share of its gross domestic product to a pool that funds the union's secretariat
- C. Only duties on goods entering through South African ports are pooled, the other members retaining every duty they collect at their own points of entry
- D. Excise duties are retained by each member nationally while customs duties alone are pooled and shared out strictly in proportion to member populations
Q2. Consider the following statements comparing India's trade engagement with the Southern African Customs Union (SACU) with its other recent trade engagements:
1. The instrument India signed with SACU in August 2026 was a Terms of Reference to launch negotiations, whereas the India–EFTA Trade and Economic Partnership Agreement had already entered into force in October 2025.
2. The pact sought with SACU is a Preferential Trade Agreement centred on trade in goods, while the negotiations launched with the Gulf Cooperation Council in February 2026 are for a Free Trade Agreement.
3. The India–EFTA agreement comprises fourteen chapters, whereas the proposed India–SACU pact is envisaged with eight chapters.
Which of the statements given above is/are correct?
- The instrument India signed with SACU in August 2026 was a Terms of Reference to launch negotiations, whereas the India–EFTA Trade and Economic Partnership Agreement had already entered into force in October 2025.
- The pact sought with SACU is a Preferential Trade Agreement centred on trade in goods, while the negotiations launched with the Gulf Cooperation Council in February 2026 are for a Free Trade Agreement.
- The India–EFTA agreement comprises fourteen chapters, whereas the proposed India–SACU pact is envisaged with eight chapters.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q3. Which one of the following constitutes the single largest category of India's merchandise exports to the SACU region?
- A. Petroleum products refined and shipped from India's western coast
- B. Motor vehicles and automotive components manufactured in India
- C. Pharmaceutical formulations and generic medicines of Indian origin
- D. Industrial machinery and mechanical appliances of Indian manufacture
Q4. How many rounds of negotiations on an India–SACU Preferential Trade Agreement were held between the launch of the talks and their lapse in 2010?
- A. Three
- B. Five
- C. Seven
- D. Nine
Q5. Consider the following statements about the chronology of the India–SACU engagement and of SACU itself:
1. Talks on an India–SACU Preferential Trade Agreement were first launched in 2002-03, whereas the Terms of Reference relaunching them were signed in 2026.
2. The earlier negotiations lapsed in 2010, so the relaunch came after a gap of about sixteen years.
3. SACU itself dates from 1910, and the agreement that currently governs its common revenue pool and sharing formula was concluded in 1969.
Which of the statements given above is/are correct?
- Talks on an India–SACU Preferential Trade Agreement were first launched in 2002-03, whereas the Terms of Reference relaunching them were signed in 2026.
- The earlier negotiations lapsed in 2010, so the relaunch came after a gap of about sixteen years.
- SACU itself dates from 1910, and the agreement that currently governs its common revenue pool and sharing formula was concluded in 1969.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q6. Trade agreement negotiations such as those with SACU, the Gulf Cooperation Council and EFTA are conducted on India's behalf by which one of the following?
- A. The Department of Commerce under the Ministry of Commerce and Industry
- B. The Department of Economic Affairs under the Union Ministry of Finance
- C. The Central Board of Indirect Taxes and Customs under the Department of Revenue
- D. The Economic Diplomacy Division of the Ministry of External Affairs
Q7. Consider the following statements about India's recent trade agreements:
1. The India–EFTA Trade and Economic Partnership Agreement, signed in March 2024, entered into force on 1 October 2025 and carries an investment objective of USD 50 billion over fifteen years.
2. India concluded its Free Trade Agreement negotiations with the European Union in January 2026, whereas its Comprehensive Economic and Trade Agreement with the United Kingdom dates from July 2025.
3. India's Comprehensive Economic Partnership Agreement with Oman belongs to December 2025, and the framework for an interim agreement with the United States was delivered in February 2026.
Which of the statements given above is/are correct?
- The India–EFTA Trade and Economic Partnership Agreement, signed in March 2024, entered into force on 1 October 2025 and carries an investment objective of USD 50 billion over fifteen years.
- India concluded its Free Trade Agreement negotiations with the European Union in January 2026, whereas its Comprehensive Economic and Trade Agreement with the United Kingdom dates from July 2025.
- India's Comprehensive Economic Partnership Agreement with Oman belongs to December 2025, and the framework for an interim agreement with the United States was delivered in February 2026.
- A. 1 and 2 only
- B. 1 and 3 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q8. Which one of the following is the essential distinction between a customs union and a free-trade area?
- A. Members of a customs union apply substantially the same duties to trade with non-members, while each member of a free-trade area keeps its own external tariff schedule
- B. Duties on trade among members are wholly eliminated in a customs union, while in a free-trade area they are only reduced by an agreed margin of preference
- C. A customs union additionally provides for free movement of labour and capital among its members, while a free-trade area is confined to trade in goods
- D. A customs union must eliminate duties on substantially all the trade among its members, while a free-trade area is exempt from any such requirement
Q9. Consider the following stages of economic integration and their descriptions:
1. Preferential trade arrangement — tariff concessions confined to an agreed list of products, each party retaining its own tariffs on the rest
2. Free-trade area — duties eliminated on substantially all the trade among members, each retaining its own tariffs towards non-members
3. Customs union — a single customs territory in which substantially the same duties are applied by members to trade with non-members
4. Common market — a customs union that additionally harmonises monetary policy among its members and adopts a single currency
Which of the above are correctly identified?
- Preferential trade arrangement — tariff concessions confined to an agreed list of products, each party retaining its own tariffs on the rest
- Free-trade area — duties eliminated on substantially all the trade among members, each retaining its own tariffs towards non-members
- Customs union — a single customs territory in which substantially the same duties are applied by members to trade with non-members
- Common market — a customs union that additionally harmonises monetary policy among its members and adopts a single currency
- A. 1 and 3 only
- B. 2, 3 and 4 only
- C. 1, 2 and 3 only
- D. 1, 2, 3 and 4
Q10. Consider the following minerals:
1. Cobalt
2. Iron ore
3. Platinum Group Elements
4. Copper
Which of the above are correctly identified as figuring in the list of critical minerals notified by the Government of India in 2023?
- Cobalt
- Iron ore
- Platinum Group Elements
- Copper
- A. 1, 2 and 3 only
- B. 1, 3 and 4 only
- C. 2 and 4 only
- D. 1, 2, 3 and 4
Q11. Of the five member states of the Southern African Customs Union, how many are landlocked?
- A. One
- B. Two
- C. Three
- D. Four