UPSC Prelims Practice Questions — ‘Must get preferential access under U.S. trade deal as agreed’

Q1. With reference to the interim India–U.S. Bilateral Trade Agreement (BTA) being negotiated in 2026, consider the following statements: 1. Under the interim understanding, U.S. tariffs on Indian goods are to be reduced to 18% from a peak of 50%. 2. India has pledged to purchase American goods worth about $500 billion over five years. 3. India's lead negotiator is the Commerce & Industry Minister, and his U.S. counterpart is the U.S. Treasury Secretary. 4. The first tranche of the BTA is targeted for conclusion by mid-July 2026. Which of the above is/are correctly identified?

  1. Under the interim understanding, U.S. tariffs on Indian goods are to be reduced to 18% from a peak of 50%.
  2. India has pledged to purchase American goods worth about $500 billion over five years.
  3. India's lead negotiator is the Commerce & Industry Minister, and his U.S. counterpart is the U.S. Treasury Secretary.
  4. The first tranche of the BTA is targeted for conclusion by mid-July 2026.
  • A. 1 and 3
  • B. 2, 3 and 4
  • C. 1, 2 and 4
  • D. 1, 2, 3 and 4

Q2. In the ongoing negotiations for the interim India–U.S. Bilateral Trade Agreement, who is India's lead negotiator?

  • A. The Union Minister of Commerce & Industry (Piyush Goyal)
  • B. The U.S. Trade Representative (Jamieson Greer)
  • C. The Union Minister of External Affairs (S. Jaishankar)
  • D. The Union Minister of Finance (Nirmala Sitharaman)

Q3. Under which U.S. law did President Trump impose the April 2, 2025 'Liberation Day' reciprocal tariffs?

  • A. International Emergency Economic Powers Act, 1977 (IEEPA)
  • B. Trading with the Enemy Act, 1917
  • C. Section 301 of the Trade Act, 1974
  • D. Trade Expansion Act, 1962

Q4. Among the following countries, which one faced the highest country-specific reciprocal tariff rate announced by the U.S. on April 2, 2025?

  • A. Cambodia (49%)
  • B. Vietnam (46%)
  • C. Bangladesh (37%)
  • D. China (34%)

Q5. Before the U.S. Supreme Court's 2026 verdict, which body first ruled (in May 2025) that President Trump had exceeded his authority in imposing the IEEPA tariffs?

  • A. The U.S. Court of International Trade
  • B. The U.S. Court of Appeals for the Federal Circuit
  • C. The U.S. Tax Court
  • D. The Federal Trade Commission

Q6. Consider these five Asian economies and their April 2, 2025 U.S. reciprocal tariff rates — China (34%), Vietnam (46%), Bangladesh (37%), Cambodia (49%) and Thailand (37%). How many of them were assigned a rate higher than India's 26%?

  • A. Two
  • B. Three
  • C. Four
  • D. Five

Q7. With reference to the U.S. reciprocal tariff rates announced on April 2, 2025, consider the following country–tariff pairings: 1. China – 34% 2. Vietnam – 46% 3. Bangladesh – 37% 4. India – 46% Which of the above pairings is/are NOT correctly matched?

  1. China – 34%
  2. Vietnam – 46%
  3. Bangladesh – 37%
  4. India – 46%
  • A. 1 only
  • B. 4 only
  • C. 2 and 4
  • D. 3 and 4

Q8. With reference to the U.S. International Emergency Economic Powers Act (IEEPA), consider the following statements: 1. It was enacted in 1977. 2. Its invocation requires the President to first declare a national emergency with respect to an unusual and extraordinary threat. 3. It has historically been used mainly to impose economic sanctions and to freeze foreign assets. 4. Prior to 2025, IEEPA had repeatedly been used by U.S. Presidents to impose import tariffs. Which of the above is/are NOT correct?

  1. It was enacted in 1977.
  2. Its invocation requires the President to first declare a national emergency with respect to an unusual and extraordinary threat.
  3. It has historically been used mainly to impose economic sanctions and to freeze foreign assets.
  4. Prior to 2025, IEEPA had repeatedly been used by U.S. Presidents to impose import tariffs.
  • A. 4 only
  • B. 1 and 4
  • C. 3 only
  • D. 2 and 3

Q9. Consider the following statements about the WTO's Most-Favoured-Nation (MFN) principle and its exceptions: 1. The MFN principle is embodied in Article I of the GATT and requires a member to extend any trade advantage granted to one member to all other members. 2. GATT Article XXIV permits customs unions and free-trade areas as a departure from MFN treatment. 3. The 1979 Enabling Clause permits preferential trade arrangements only among developed (industrialised) countries. Which of the statements given above is/are correct?

  1. The MFN principle is embodied in Article I of the GATT and requires a member to extend any trade advantage granted to one member to all other members.
  2. GATT Article XXIV permits customs unions and free-trade areas as a departure from MFN treatment.
  3. The 1979 Enabling Clause permits preferential trade arrangements only among developed (industrialised) countries.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q10. Consider the following statements about India's export exposure to the U.S. under the 2025–26 tariff changes: 1. The United States accounts for roughly 30% of India's gems and jewellery exports. 2. Pharmaceuticals and energy products were exempted from the U.S. country-specific reciprocal tariffs. 3. India is the single largest seafood supplier to the United States, ahead of Canada and Chile. Which of the statements given above is/are correct?

  1. The United States accounts for roughly 30% of India's gems and jewellery exports.
  2. Pharmaceuticals and energy products were exempted from the U.S. country-specific reciprocal tariffs.
  3. India is the single largest seafood supplier to the United States, ahead of Canada and Chile.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q11. With reference to the Office of the U.S. Trade Representative (USTR), consider the following statements: 1. Under Sections 301–310 of the U.S. Trade Act of 1974, the USTR is authorised to investigate foreign practices that impede U.S. exports. 2. In 2026 the USTR proposed a 12.5% duty on certain Indian imports in connection with a Section 301 investigation linked to forced-labour concerns. 3. Jamieson Greer is the U.S. Trade Representative. 4. The USTR is a specialised agency of the World Trade Organization. Which of the above is/are correctly identified?

  1. Under Sections 301–310 of the U.S. Trade Act of 1974, the USTR is authorised to investigate foreign practices that impede U.S. exports.
  2. In 2026 the USTR proposed a 12.5% duty on certain Indian imports in connection with a Section 301 investigation linked to forced-labour concerns.
  3. Jamieson Greer is the U.S. Trade Representative.
  4. The USTR is a specialised agency of the World Trade Organization.
  • A. 1 and 4
  • B. 2, 3 and 4
  • C. 1, 2 and 3
  • D. 1, 2, 3 and 4