UPSC Prelims Practice Questions — Goods exports surge lowers trade deficit

Q1. By approximately how much did India's merchandise trade deficit narrow in August 2026 as compared with the immediately preceding month?

  • A. About US$ 0.36 billion
  • B. About US$ 2.34 billion
  • C. About US$ 5.12 billion
  • D. About US$ 8.71 billion

Q2. Consider the following statements regarding India's merchandise trade in August 2026: 1. Merchandise exports stood at about US$ 43.81 billion, growing by roughly 26 per cent year-on-year. 2. Merchandise imports stood at about US$ 70.67 billion, growing at a slower pace than exports. 3. The merchandise trade deficit in August 2026 was larger than the deficit recorded in August 2025. 4. Cumulative merchandise exports during April-August of 2026-27 stood at about US$ 215.91 billion, nearly 18 per cent higher year-on-year. Which of the statements given above is/are correct?

  1. Merchandise exports stood at about US$ 43.81 billion, growing by roughly 26 per cent year-on-year.
  2. Merchandise imports stood at about US$ 70.67 billion, growing at a slower pace than exports.
  3. The merchandise trade deficit in August 2026 was larger than the deficit recorded in August 2025.
  4. Cumulative merchandise exports during April-August of 2026-27 stood at about US$ 215.91 billion, nearly 18 per cent higher year-on-year.
  • A. 1 and 3
  • B. 1, 2 and 4
  • C. 2, 3 and 4
  • D. 1 and 4 only

Q3. In August 2026, which one of the following components of India's external trade recorded the highest year-on-year rate of growth?

  • A. Merchandise exports
  • B. Merchandise imports
  • C. Services exports
  • D. Services imports

Q4. Consider the following statements regarding India's combined goods-and-services trade: 1. The overall trade deficit narrowed to about US$ 9.41 billion in August 2026. 2. Combined exports of goods and services rose by about 25 per cent year-on-year to roughly US$ 82.68 billion in August 2026. 3. Services exports in August 2026 were estimated at about US$ 38.9 billion, a growth of roughly 24.6 per cent year-on-year. 4. Cumulative exports of goods and services during April-August of 2026-27 were lower than in the corresponding period of the previous year. Which of the statements given above is/are NOT correct?

  1. The overall trade deficit narrowed to about US$ 9.41 billion in August 2026.
  2. Combined exports of goods and services rose by about 25 per cent year-on-year to roughly US$ 82.68 billion in August 2026.
  3. Services exports in August 2026 were estimated at about US$ 38.9 billion, a growth of roughly 24.6 per cent year-on-year.
  4. Cumulative exports of goods and services during April-August of 2026-27 were lower than in the corresponding period of the previous year.
  • A. 1 and 3
  • B. 2 only
  • C. 4 only
  • D. 2 and 4

Q5. The revision of the base year of India's Merchandise Trade Indices to FY 2022-23 was carried out on the recommendations of a committee constituted under the chairmanship of which one of the following?

  • A. Prof. Ravindra H. Dholakia, Indian Institute of Management, Ahmedabad
  • B. Prof. Nachiketa Chattopadhyay, Indian Statistical Institute, Kolkata
  • C. Prof. Bimal Kumar Roy, Indian Statistical Institute, Kolkata
  • D. Dr. C. Rangarajan, former Governor, Reserve Bank of India

Q6. Which one of the following is the principal input on the basis of which the Directorate General of Commercial Intelligence and Statistics compiles India's monthly merchandise trade statistics?

  • A. Foreign exchange receipt and payment records reported by authorised dealer banks
  • B. Export and import declarations filed with the regional offices of the Directorate General of Foreign Trade
  • C. Daily Trade Returns received from custom houses, ports, airports and inland container depots
  • D. Electronic invoices generated on the Goods and Services Tax Network for zero-rated supplies

Q7. Consider the following statements regarding the structure of India's merchandise trade: 1. Petroleum crude and products constitute one of the largest single elements of India's import basket. 2. A sharp fall of nearly 58 per cent in gold imports, to about US$ 2.3 billion, was a major factor narrowing the trade deficit in August 2026. 3. India's merchandise trade deficit in FY 2024-25 was smaller than that in FY 2023-24. 4. Non-petroleum, non-gems-and-jewellery imports in FY 2025-26 were higher than in the preceding financial year. Which of the statements given above is/are NOT correct?

  1. Petroleum crude and products constitute one of the largest single elements of India's import basket.
  2. A sharp fall of nearly 58 per cent in gold imports, to about US$ 2.3 billion, was a major factor narrowing the trade deficit in August 2026.
  3. India's merchandise trade deficit in FY 2024-25 was smaller than that in FY 2023-24.
  4. Non-petroleum, non-gems-and-jewellery imports in FY 2025-26 were higher than in the preceding financial year.
  • A. 1 and 2
  • B. 3 only
  • C. 3 and 4
  • D. 2 only

Q8. Of the 168 principal export commodity groups tracked in India's August 2026 merchandise trade data, in how many did both volume and value register growth?

  • A. 39
  • B. 68
  • C. 96
  • D. 129

Q9. The 'Balance of Payments Manual for India', which lays down the concepts and compilation practices followed for India's balance of payments statistics, was brought out by which authority and in which year?

  • A. The Reserve Bank of India, in 2010
  • B. The Reserve Bank of India, in 1993
  • C. The Ministry of Statistics and Programme Implementation, in 2010
  • D. The Department of Economic Affairs, Ministry of Finance, in 1993

Q10. The Export and Import Unit Value Indices are used as deflators for estimating real exports and imports in the compilation of India's national accounts by which one of the following?

  • A. The Directorate General of Commercial Intelligence and Statistics, Department of Commerce
  • B. The National Accounts Division, Ministry of Statistics and Programme Implementation
  • C. The Department of Statistics and Information Management, Reserve Bank of India
  • D. The Economic Division, Department of Economic Affairs, Ministry of Finance

Q11. Consider the following statements comparing India's cumulative export performance in 2026-27 with earlier reference periods: 1. Cumulative merchandise exports during April-August 2026-27 were about US$ 215.91 billion, roughly 18 per cent higher than in the corresponding period a year earlier. 2. Cumulative exports of merchandise and services taken together during April-August 2026-27 were estimated at about US$ 399.27 billion, against about US$ 345.55 billion a year earlier. 3. The year-on-year growth in combined merchandise and services exports during April-August 2026-27 was lower than that recorded during April-July 2026-27. Which of the statements given above is/are correct?

  1. Cumulative merchandise exports during April-August 2026-27 were about US$ 215.91 billion, roughly 18 per cent higher than in the corresponding period a year earlier.
  2. Cumulative exports of merchandise and services taken together during April-August 2026-27 were estimated at about US$ 399.27 billion, against about US$ 345.55 billion a year earlier.
  3. The year-on-year growth in combined merchandise and services exports during April-August 2026-27 was lower than that recorded during April-July 2026-27.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q12. Consider the following statements regarding India's export promotion framework: 1. Niryat Protsahan and Niryat Disha are the two integrated sub-schemes through which the Export Promotion Mission is implemented. 2. The Export Promotion Mission was approved with an outlay of about Rs. 25,060 crore covering the period from FY 2025-26 to FY 2030-31. 3. The Remission of Duties and Taxes on Exported Products scheme has been in operation since 1 January 2021. 4. The Trade Infrastructure for Export Scheme is administered by the Ministry of Micro, Small and Medium Enterprises. Which of the above is/are correctly identified?

  1. Niryat Protsahan and Niryat Disha are the two integrated sub-schemes through which the Export Promotion Mission is implemented.
  2. The Export Promotion Mission was approved with an outlay of about Rs. 25,060 crore covering the period from FY 2025-26 to FY 2030-31.
  3. The Remission of Duties and Taxes on Exported Products scheme has been in operation since 1 January 2021.
  4. The Trade Infrastructure for Export Scheme is administered by the Ministry of Micro, Small and Medium Enterprises.
  • A. 1 and 4
  • B. 2, 3 and 4
  • C. 1, 2 and 3
  • D. 1 and 3 only