UPSC Prelims Practice Questions — The global impact of Indonesia’s export policy shift

Q1. In the context of Indonesia's 2026 commodity export governance reform, which one of the following best describes PT Danantara Sumberdaya Indonesia (DSI)?

  • A. A trading company under the sovereign wealth fund Danantara, designated to act as the single channel for exports of specified strategic commodities
  • B. An independent commodity futures exchange set up to determine global reference prices for palm oil and coal
  • C. A department under Indonesia's finance ministry created solely to collect export duties on minerals
  • D. A joint venture between Indonesian state firms and Chinese buyers to jointly manage nickel refining

Q2. In global commodity trade, 'thermal coal' — the category in which Indonesia is the world's largest exporter — is primarily characterised by which one of the following uses?

  • A. Burned to raise steam mainly for electricity generation
  • B. Used chiefly as a reducing agent in blast-furnace steelmaking
  • C. Converted into metallurgical coke for foundry operations
  • D. Processed into activated carbon for water filtration

Q3. Which one of the following countries is the world's largest producer of nickel?

  • A. Indonesia
  • B. the Philippines
  • C. Russia
  • D. Australia

Q4. With reference to Indonesia's 2026 centralisation of strategic commodity exports, consider the following statements. Which of the statements given above is/are correct?

  1. It was announced by President Prabowo Subianto in May 2026.
  2. Exports are to be routed through a trading company overseen by the sovereign wealth fund Danantara.
  3. The mechanism begins with a transition period of about three months before taking full effect.
  4. The first phase applies to exports of crude oil and natural gas.
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q5. Consider the following statements comparing Indonesia's 2026 export-centralisation reform with its earlier commodity-export measures. Which of the statements given above is/are correct?

  1. Unlike the 2020 nickel ore measure, which prohibited exports outright, the 2026 reform routes exports through a single state-linked channel rather than banning them.
  2. Unlike the temporary 2022 palm oil export ban, the 2026 reform is intended as a lasting structural change to export governance.
  3. The 2026 reform, like the 2022 palm oil ban, is confined to palm oil and its derivatives.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q6. Indonesia's policy of 'hilirisasi' (downstreaming), of which the 2020 nickel ore export ban was an instance, is best described as:

  • A. Restricting exports of raw materials to compel domestic value-addition and processing before export
  • B. Subsidising exports of unprocessed raw materials to capture a larger share of global markets
  • C. Relocating mining operations further downstream along river systems to cut transport costs
  • D. Lowering export tariffs on processed goods to expand overall trade volume

Q7. With reference to Indonesia's 2020 nickel ore export ban, consider the following statements. Which of the statements given above is/are correct?

  1. Indonesia reinstated a total ban on nickel ore exports with effect from 1 January 2020.
  2. The measure was challenged at the WTO by the European Union.
  3. The policy was aimed at developing Indonesia's domestic stainless-steel processing industry.
  4. The 2020 ban was Indonesia's first-ever restriction on nickel ore exports, with no earlier curbs.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1, 3 and 4

Q8. The roughly three-week Indonesian palm oil export ban of 2022 was lifted through which one of the following instruments?

  • A. Regulation No. 30/2022, issued on 23 May 2022
  • B. Regulation No. 44 of 2020
  • C. Government Regulation No. 26 of 2026
  • D. Presidential Regulation No. 30 of 2020

Q9. By making the state-linked entity DSI the sole seller of designated commodities to foreign buyers — thereby reducing the price-negotiating leverage of large importers such as China — Indonesia effectively creates which one of the following market structures on the export side?

  • A. A monopoly (a single seller)
  • B. A monopsony (a single buyer)
  • C. An oligopoly of competing exporters
  • D. A perfectly competitive market

Q10. With reference to resource nationalism and recent trends in export restrictions on critical raw materials, consider the following statements. Which of the statements given above is/are correct?

  1. China introduced fresh restrictions on rare-earth exports in October 2025.
  2. Export restrictions on critical raw materials have risen roughly fivefold since 2009.
  3. Indonesia's 2020 nickel ore export ban is an example of export curbs favouring domestic downstream users.
  4. According to the OECD, export restrictions on critical raw materials fell to record-low levels in 2024.
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 2, 3 and 4
  • D. 1 and 4

Q11. Consider the following statements about Indonesia's geography and economic profile. Which of the statements given above is/are NOT correct?

  1. Indonesia is a founding member of ASEAN.
  2. Indonesia is a member of the G20.
  3. Kalimantan and Sumatra are among Indonesia's principal coal-producing regions.
  4. Indonesia's nickel deposits are concentrated mainly in Java, its most populous island.
  • A. 1 only
  • B. 2 and 3
  • C. 4 only
  • D. 3 and 4