UPSC Prelims Practice Questions — India's Exports Scale Record US$ 863.1 Billion in FY 2025–26, Driven by Strong Trade with UAE, UK and Australia

Q1. With reference to India's foreign trade performance in FY 2025-26 (April–March), consider the following figures as released by the Ministry of Commerce and Industry: 1. Merchandise exports of about US$ 441.78 billion 2. Services exports of about US$ 418.31 billion 3. Non-petroleum exports of about US$ 387.88 billion 4. Total imports (merchandise and services) of about US$ 919.92 billion Which of the above is/are correctly identified?

  1. Merchandise exports of about US$ 441.78 billion
  2. Services exports of about US$ 418.31 billion
  3. Non-petroleum exports of about US$ 387.88 billion
  4. Total imports (merchandise and services) of about US$ 919.92 billion
  • A. 1 and 2 only
  • B. 2, 3 and 4 only
  • C. 1, 2 and 3 only
  • D. 1, 3 and 4 only

Q2. Consider the following statements comparing India's external trade in FY 2025-26 with the preceding years: 1. Services exports grew at a faster rate than merchandise exports during FY 2025-26. 2. India's total exports rose from US$ 778.13 billion in FY 2023-24 to US$ 825.26 billion in FY 2024-25. 3. The merchandise trade deficit in FY 2025-26, at about US$ 333.19 billion, was lower than that recorded in FY 2024-25. Which of the statements given above is/are correct?

  1. Services exports grew at a faster rate than merchandise exports during FY 2025-26.
  2. India's total exports rose from US$ 778.13 billion in FY 2023-24 to US$ 825.26 billion in FY 2024-25.
  3. The merchandise trade deficit in FY 2025-26, at about US$ 333.19 billion, was lower than that recorded in FY 2024-25.
  • A. 1 and 3 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q3. The India–UAE Comprehensive Economic Partnership Agreement was signed and subsequently entered into force on which one of the following pairs of dates?

  • A. Signed on 18 February 2022; entered into force on 1 May 2022
  • B. Signed on 2 April 2022; entered into force on 29 December 2022
  • C. Signed on 1 May 2022; entered into force on 18 February 2023
  • D. Signed on 24 July 2025; entered into force on 15 July 2026

Q4. Which one of the following statements about the agency-level operationalisation of the India–UAE CEPA is correct?

  • A. Preferential Certificates of Origin under the agreement are issued through agencies authorised by the Directorate General of Foreign Trade
  • B. The Directorate General of Trade Remedies is the nodal authority for notifying all tariff concessions granted under the agreement
  • C. The agreement is administered exclusively by the Ministry of External Affairs, since it is a bilateral treaty with a foreign state
  • D. Every tariff concession under the agreement requires prior ratification by Parliament before it can be notified

Q5. The India–Australia ECTA yielded India its fullest tariff-line coverage from any trading partner. Which one of the following correctly states Australia's commitment under it?

  • A. 100% of tariff lines opened, of which 98.3% became duty-free immediately and the rest were phased out over five years
  • B. 100% of tariff lines opened, of which 70.3% became duty-free immediately and the rest were phased out over ten years
  • C. 90.6% of tariff lines opened, of which 98.3% became duty-free immediately and the rest were phased out over five years
  • D. 70.3% of tariff lines opened, all of which became duty-free immediately with no phase-out period

Q6. Consider the following statements about the India–Australia Economic Cooperation and Trade Agreement: 1. It entered into force on 29 December 2022. 2. India extended preferential access to Australia on 70.3% of its tariff lines, covering 90.6% of the trade value. 3. India's exports to Australia stood at about US$ 8.5 billion in FY 2024-25, against about US$ 4 billion in FY 2020-21. 4. A Mutual Recognition Arrangement on organic products between the two countries was signed in September 2024. Which of the above is/are NOT correct?

  1. It entered into force on 29 December 2022.
  2. India extended preferential access to Australia on 70.3% of its tariff lines, covering 90.6% of the trade value.
  3. India's exports to Australia stood at about US$ 8.5 billion in FY 2024-25, against about US$ 4 billion in FY 2020-21.
  4. A Mutual Recognition Arrangement on organic products between the two countries was signed in September 2024.
  • A. 1 and 3
  • B. 2 only
  • C. 2 and 4
  • D. 4 only

Q7. On the Indian side, the negotiation and subsequent implementation of the India–UK CETA is led by which one of the following?

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

Q8. In the context of preferential trade agreements such as the India–UK CETA, 'rules of origin' provisions serve which one of the following purposes?

  • A. They set out the criteria by which a good is treated as sufficiently produced or processed in a partner country to qualify for concessional duty
  • B. They identify the port or place of shipment from which a consignment must be despatched for it to draw concessional duty
  • C. They establish the country in which the exporting enterprise was originally incorporated, which decides its eligibility for concessions
  • D. They fix the base tariff rate obtaining before the agreement, from which the agreed duty reductions are calculated

Q9. Consider the following statements distinguishing the types of trade agreements India has entered into: 1. In a Preferential Trade Agreement partners lower tariffs on an agreed list of products, whereas a Free Trade Agreement removes barriers on substantially all trade between them. 2. A Comprehensive Economic Partnership Agreement goes beyond goods to cover services, investment and the movement of professionals, as with the India–UAE CEPA, which opened around 111 services sub-sectors to Indian suppliers. 3. The India–Mauritius CECPA provides preferential market access for over 300 Indian export products and access to around 40 services sub-sectors. Which of the statements given above is/are correct?

  1. In a Preferential Trade Agreement partners lower tariffs on an agreed list of products, whereas a Free Trade Agreement removes barriers on substantially all trade between them.
  2. A Comprehensive Economic Partnership Agreement goes beyond goods to cover services, investment and the movement of professionals, as with the India–UAE CEPA, which opened around 111 services sub-sectors to Indian suppliers.
  3. The India–Mauritius CECPA provides preferential market access for over 300 Indian export products and access to around 40 services sub-sectors.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q10. Under the India–Oman CEPA that came into force on 1 June 2026, the commitment described as 'zero-duty access on 98.08% of Oman's tariff lines' means which one of the following?

  • A. 98.08% of the product categories listed in Oman's tariff schedule carry no import duty for qualifying Indian goods
  • B. 98.08% of the goods India ships to Oman enter free of duty irrespective of where they were manufactured
  • C. Oman's average applied tariff on Indian goods has been cut by 98.08% across every product that it imports
  • D. 98.08% of India's total merchandise exports worldwide now enjoy duty-free entry into all Gulf markets

Q11. The Foreign Trade Policy 2023, notified by the Directorate General of Foreign Trade, structures its approach around how many key pillars?

  • A. Two
  • B. Three
  • C. Four
  • D. Six

Q12. Which one of the following contributed the largest share — nearly 28% — of India's merchandise exports in FY 2025-26, at a record US$ 122.43 billion?

  • A. Engineering goods
  • B. Gems and jewellery
  • C. Textiles and apparel
  • D. Drugs and pharmaceuticals