UPSC Prelims Practice Questions — Govt. plans to wrap up trade agreement with Chile this year
Q1. The Joint Study Group whose report recommended upgrading India–Chile economic ties to a Comprehensive Economic Partnership Agreement was constituted under which one of the following instruments?
- A. The India–Chile Preferential Trade Agreement concluded in March 2006
- B. The Framework Agreement on Economic Cooperation concluded in January 2005
- C. The expanded India–Chile Preferential Trade Agreement concluded in September 2016
- D. The India–MERCOSUR Preferential Trade Agreement to which Chile is an associate
Q2. Under the expanded India–Chile Preferential Trade Agreement implemented in May 2017, concessions were extended by India to Chile on how many tariff lines at the 8-digit level?
- A. 296
- B. 1031
- C. 1798
- D. 2448
Q3. Consider the following statements regarding the India–Chile Comprehensive Economic Partnership Agreement (CEPA) negotiations:
1. The Terms of Reference for the negotiations were signed in May 2025 by Chile's Ambassador to India and a Joint Secretary in India's Department of Commerce, who is also India's Chief Negotiator for the CEPA.
2. The first round of negotiations was held in Santiago, whereas the fourth round was concluded in New Delhi.
3. Unlike the existing Preferential Trade Agreement, the proposed CEPA is intended to cover sectors such as digital services, investment promotion and cooperation, MSMEs and critical minerals.
Which of the statements given above is/are correct?
- The Terms of Reference for the negotiations were signed in May 2025 by Chile's Ambassador to India and a Joint Secretary in India's Department of Commerce, who is also India's Chief Negotiator for the CEPA.
- The first round of negotiations was held in Santiago, whereas the fourth round was concluded in New Delhi.
- Unlike the existing Preferential Trade Agreement, the proposed CEPA is intended to cover sectors such as digital services, investment promotion and cooperation, MSMEs and critical minerals.
- A. 1 only
- B. 1 and 2 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q4. In the context of the India–Chile trade talks, the signing of the 'Terms of Reference' by the two sides denotes which one of the following?
- A. A binding schedule of tariff concessions and rules of origin that the two sides have already settled and will notify on entry into force
- B. An interim arrangement extending preferences on a limited basket of goods until the wider agreement is concluded and ratified
- C. A mutually agreed document fixing the scope, structure and chapters that the negotiations will cover, whose signature formally launches the rounds
- D. The instrument by which the two governments complete domestic ratification and bring the negotiated agreement into legal effect
Q5. On the Chilean side, negotiation of trade agreements such as the CEPA with India is conducted by which one of the following?
- A. The Ministry of Mining of Chile, acting through its Undersecretariat for Mining
- B. The Corporación Nacional del Cobre (CODELCO), the state-owned mining corporation of Chile
- C. The Central Bank of Chile, acting through its external sector and reserves division
- D. The Undersecretariat for International Economic Relations within Chile's Ministry of Foreign Affairs
Q6. Chile shares its land boundary with how many countries?
- A. One
- B. Two
- C. Three
- D. Four
Q7. Among the following trade agreements concluded by India, which one entered into force the earliest?
- A. India–Oman Comprehensive Economic Partnership Agreement
- B. India–EFTA Trade and Economic Partnership Agreement
- C. India–Australia Economic Cooperation and Trade Agreement
- D. India–United Arab Emirates Comprehensive Economic Partnership Agreement
Q8. According to the Department of Commerce's 2026 review of India's trade partnerships, India's network of free trade agreements extends to how many partner countries?
Q9. Which one of the following correctly describes the sanction of India's National Critical Mineral Mission?
- A. Approved by the Cabinet Committee on Economic Affairs in 2023, with an outlay of ₹16,300 crore over five years, and administered by the Ministry of Mines
- B. Approved by the Union Cabinet in January 2025, with an outlay of ₹16,300 crore over seven years, and administered by the Ministry of Coal
- C. Approved by the Union Cabinet in January 2025, with an outlay of ₹16,300 crore over seven years, and administered by the Ministry of Mines
- D. Approved by NITI Aayog in January 2025, with an outlay of ₹18,000 crore over seven years, and administered by the Ministry of Heavy Industries
Q10. Consider the following statements:
1. Khanij Bidesh India Limited (KABIL) is a joint venture of NALCO, Hindustan Copper Limited and Mineral Exploration Corporation Limited, mandated to identify, explore and acquire critical mineral assets overseas.
2. The proposed India–Chile CEPA envisages a dedicated chapter on critical and strategic minerals, whereas the existing India–Chile Preferential Trade Agreement operates only through preferences on a selected list of tariff lines.
3. The National Critical Mineral Mission is confined to domestic exploration and processing, and excludes acquisition of critical mineral assets abroad, which is left entirely to bilateral agreements.
Which of the statements given above is/are correct?
- Khanij Bidesh India Limited (KABIL) is a joint venture of NALCO, Hindustan Copper Limited and Mineral Exploration Corporation Limited, mandated to identify, explore and acquire critical mineral assets overseas.
- The proposed India–Chile CEPA envisages a dedicated chapter on critical and strategic minerals, whereas the existing India–Chile Preferential Trade Agreement operates only through preferences on a selected list of tariff lines.
- The National Critical Mineral Mission is confined to domestic exploration and processing, and excludes acquisition of critical mineral assets abroad, which is left entirely to bilateral agreements.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q11. With reference to the State visit of the President of Chile to India in April 2025 and the India–Chile Joint Statement issued on that occasion, consider the following:
1. Both sides recorded that India and Chile are Observer States to the Antarctic Treaty, though neither holds Consultative Party status.
2. The visit, from 1 to 5 April 2025, marked the completion of 76 years of diplomatic relations between the two countries.
3. Apart from New Delhi, the Chilean President's itinerary in India included Agra, Mumbai and Bengaluru.
4. The two sides highlighted the positive effects of the expansion of the India–Chile Preferential Trade Agreement, which took effect in May 2017, on bilateral trade.
Which of the above is/are correctly identified?
- Both sides recorded that India and Chile are Observer States to the Antarctic Treaty, though neither holds Consultative Party status.
- The visit, from 1 to 5 April 2025, marked the completion of 76 years of diplomatic relations between the two countries.
- Apart from New Delhi, the Chilean President's itinerary in India included Agra, Mumbai and Bengaluru.
- The two sides highlighted the positive effects of the expansion of the India–Chile Preferential Trade Agreement, which took effect in May 2017, on bilateral trade.
- A. 1 and 2
- B. 1, 3 and 4
- C. 2, 3 and 4
- D. 3 and 4 only
Q12. India's agreements of the CECA/CEPA type, such as those with Singapore, the UAE and Oman, are distinguished from a conventional Free Trade Agreement principally in that they —
- A. confine liberalisation to trade in goods, leaving services and investment to be taken up in separately negotiated instruments later
- B. combine goods, services and investment in a single package, together with disciplines in areas such as intellectual property, competition and government procurement
- C. grant a margin of preference on a limited list of tariff lines instead of eliminating duties on substantially all trade between the parties
- D. establish a common external tariff towards non-members along with free movement of capital and labour among the parties