UPSC Prelims Practice Questions — On the delay in India-U.S. trade deal

Q1. Sanctions and trade restrictions imposed by the U.S. President under the International Emergency Economic Powers Act (IEEPA), 1977 are principally administered and enforced by which of the following bodies?

• A. Office of Foreign Assets Control (OFAC), Department of the Treasury
• B. Bureau of Industry and Security, Department of Commerce
• C. Office of the United States Trade Representative (USTR)
• D. Customs and Border Protection, Department of Homeland Security

Q2. With reference to the U.S. Supreme Court's 2026 decision on tariffs imposed under IEEPA, consider the following statements: 1. The Court held that IEEPA does not authorise the President to impose tariffs. 2. The case was decided as Learning Resources, Inc. v. Trump. 3. Following the ruling, the President relied on Section 232 of the Trade Expansion Act, 1962 to impose replacement tariffs. 4. IEEPA was enacted in 1977. Which of the above is/are correctly identified?

1. The Court held that IEEPA does not authorise the President to impose tariffs.
2. The case was decided as Learning Resources, Inc. v. Trump.
3. Following the ruling, the President relied on Section 232 of the Trade Expansion Act, 1962 to impose replacement tariffs.
4. IEEPA was enacted in 1977.

• A. 1, 2 and 4
• B. 1, 3 and 4
• C. 2 and 3 only
• D. 1 and 2 only

Q3. Consider the following statements regarding the India-U.S. Bilateral Trade Agreement process: 1. The BTA was formally announced by Prime Minister Modi and President Trump in February 2025. 2. Under the February 2026 interim framework, the U.S. agreed to apply a reciprocal tariff of 18% on Indian goods, reduced from a peak of 50%. 3. The February 2026 interim framework included tariff reductions by India on dairy products and wheat. Which of the statements given above is/are correct?

1. The BTA was formally announced by Prime Minister Modi and President Trump in February 2025.
2. Under the February 2026 interim framework, the U.S. agreed to apply a reciprocal tariff of 18% on Indian goods, reduced from a peak of 50%.
3. The February 2026 interim framework included tariff reductions by India on dairy products and wheat.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q4. On the Indian side, the negotiations for the India-U.S. Bilateral Trade Agreement are led by the chief negotiator drawn from which of the following?

• A. Department of Commerce, Ministry of Commerce and Industry
• B. Department of Economic Affairs, Ministry of Finance
• C. Ministry of External Affairs
• D. Department for Promotion of Industry and Internal Trade (DPIIT)

Q5. India's defensive stance on opening its dairy sector in trade negotiations is frequently justified by its position as the world's largest producer of which of the following?

• A. Milk
• B. Rice
• C. Sugarcane
• D. Cotton

Q6. The apex cooperative body that markets the 'Amul' brand and has consistently spearheaded the dairy sector's opposition to liberalising milk imports in trade deals such as RCEP is:

• A. Gujarat Cooperative Milk Marketing Federation (GCMMF)
• B. National Dairy Development Board (NDDB)
• C. National Agricultural Cooperative Marketing Federation (NAFED)
• D. Indian Farmers Fertiliser Cooperative (IFFCO)

Q7. In 2024, the single largest category of U.S. merchandise exports to India by value was:

• A. Crude petroleum
• B. Coal and solid fuels
• C. Gas turbines
• D. Aircraft and aircraft parts

Q8. India's official merchandise (foreign trade) statistics, used to measure bilateral trade with countries such as the United States, are compiled and released by which of the following?

• A. Directorate General of Commercial Intelligence and Statistics (DGCIS), Ministry of Commerce and Industry
• B. Directorate General of Foreign Trade (DGFT)
• C. National Statistical Office (NSO), Ministry of Statistics and Programme Implementation
• D. Reserve Bank of India (RBI)

Q9. The U.S. 'Russian oil' penalty tariff on India was triggered by the fact that, after 2022, which country had become the single largest source of India's crude oil imports?

• A. Russia
• B. Iraq
• C. Saudi Arabia
• D. United Arab Emirates

Q10. In the RCEP negotiations, the 'auto-trigger safeguard mechanism' that India demanded but did not obtain refers to a provision that would have:

• A. Automatically raised tariffs once imports from any member surged beyond a specified threshold
• B. Automatically conferred most-favoured-nation status on all member states
• C. Automatically resolved trade disputes through binding arbitration without a panel
• D. Automatically reduced tariffs to zero in a phased manner over a fixed period

Q11. Under the WTO/GATT framework, the 'Most-Favoured-Nation' (MFN) principle requires that a member:

• A. Extend to all WTO members any trade advantage it grants to the products of any one member
• B. Treat imported goods no less favourably than 'like' domestically produced goods
• C. Grant developing countries non-reciprocal preferential tariff access
• D. Bind its tariff rates at zero for all members of a customs union

Q12. Before India's removal from the U.S. Generalized System of Preferences (GSP) in 2019, the approximate value of Indian exports that entered the U.S. market duty-free under the programme (2018) was closest to:

• A. $6.3 billion
• B. $190 million
• C. $56 billion
• D. $129 billion