UPSC Prelims Practice Questions — New Zealand, India to sign free trade pact today; tariffs to be removed on all exports

Q1. The India–New Zealand Free Trade Agreement was concluded through how many formal rounds of negotiation held between the official launch of talks in March 2025 and the conclusion in December 2025?

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

Q2. When India–New Zealand trade negotiations were first launched in 2010, the framework was designated by the acronym 'CECA'. What does CECA stand for?

  • A. Comprehensive Economic Cooperation Agreement
  • B. Comprehensive Economic Cooperation and Trade Agreement
  • C. Comprehensive Economic Partnership Agreement
  • D. Comprehensive Economic Convergence Arrangement

Q3. Under the India–New Zealand FTA, New Zealand's USD 20 billion investment commitment is backed by a 'rebalancing mechanism'. What does this mechanism specifically provide for?

  • A. Suspension of FTA benefits if the investment target is not met
  • B. Automatic revision of the agreed tariff schedules every five years
  • C. Adjustment of the rupee–New Zealand dollar exchange rate to protect exporters
  • D. Annual equalisation of the two countries' bilateral trade balance

Q4. The India–New Zealand FTA sets a target to double bilateral trade to USD 5 billion. Over what time-frame is this doubling targeted?

  • A. 5 years
  • B. 10 years
  • C. 15 years
  • D. 3 years

Q5. Consider the following statements comparing India–New Zealand merchandise trade in 2023–24 and 2024–25: 1. Total merchandise trade rose from about USD 873 million in 2023–24 to about USD 1.3 billion in 2024–25. 2. This change represented roughly a 49% year-on-year increase. 3. India recorded a merchandise trade deficit with New Zealand in 2024–25. Which of the statements given above is/are correct?

  1. Total merchandise trade rose from about USD 873 million in 2023–24 to about USD 1.3 billion in 2024–25.
  2. This change represented roughly a 49% year-on-year increase.
  3. India recorded a merchandise trade deficit with New Zealand in 2024–25.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q6. Under the India–New Zealand FTA, India protected certain sensitive sectors by offering no tariff concessions on them. Which of the following items were kept out of India's tariff concessions? 1. Dairy products 2. Wine 3. Edible oils 4. Wool Which of the above is/are correctly identified?

  1. Dairy products
  2. Wine
  3. Edible oils
  4. Wool
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 2 and 3
  • D. 3 and 4 only

Q7. The India–Australia Economic Cooperation and Trade Agreement (ECTA), often cited as India's first trade pact with a developed economy in over a decade, came into force in which year?

  • A. 2020
  • B. 2022
  • C. 2023
  • D. 2024

Q8. Which Union Ministry is the nodal ministry responsible for negotiating and implementing India's Free Trade Agreements, including the India–New Zealand FTA?

  • A. Ministry of External Affairs
  • B. Ministry of Commerce and Industry
  • C. Ministry of Finance
  • D. Ministry of Corporate Affairs

Q9. Which one of the following is the capital city of New Zealand?

  • A. Auckland
  • B. Wellington
  • C. Christchurch
  • D. Queenstown

Q10. Among the following forms of regional economic integration, which represents a deeper stage than a Free Trade Area, being distinguished by a common external tariff on imports from non-member countries?

  • A. Preferential Trade Agreement
  • B. Customs Union
  • C. Free Trade Area
  • D. Early Harvest Scheme

Q11. With reference to the Directorate General of Foreign Trade (DGFT), which one of the following statements is correct?

  • A. It is an attached office of the Ministry of Commerce and Industry that formulates and implements India's Foreign Trade Policy
  • B. It is a statutory body under the Ministry of Finance that fixes all of India's import tariffs
  • C. It is the sole authority that negotiates and signs every one of India's Free Trade Agreements
  • D. It is a regulator under the Reserve Bank of India that manages all foreign exchange transactions

Q12. India and New Zealand first launched negotiations for a Comprehensive Economic Cooperation Agreement (later revived as an FTA) in which year?

  • A. 2005
  • B. 2010
  • C. 2015
  • D. 2020