UPSC Prelims Practice Questions — India Welcomes Passage of New Zealand Legislation to Give Effect to India-New Zealand FTA

Q1. The India–New Zealand Free Trade Agreement, whose negotiations were launched in March 2025, was concluded after how many formal rounds of negotiations (apart from several in-person and virtual intersessions)?

  • A. Three formal rounds
  • B. Five formal rounds
  • C. Seven formal rounds
  • D. Nine formal rounds

Q2. Which one of the following is the nodal body of the Government of India that negotiates and operationalises free trade agreements such as the India–New Zealand FTA?

  • A. The Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry
  • B. The Department of Economic Affairs under the Ministry of Finance
  • C. The Department of Commerce under the Ministry of Commerce and Industry
  • D. The Economic Diplomacy Division under the Ministry of External Affairs

Q3. The instrument signed by Shri Piyush Goyal and Hon. Todd McClay at Bharat Mandapam in April 2026 is titled a 'Free Trade Agreement'. In trade terminology, which one of the following best describes this category of arrangement?

  • A. Partners eliminate tariffs on trade among themselves and also adopt an identical common external tariff schedule towards all non-partner countries
  • B. Partners eliminate tariffs on substantially all trade among themselves, while each retains its own independent tariff policy towards non-partner countries
  • C. Partners exchange tariff concessions on a limited negotiated list of products, retaining normal duties on all products outside that list
  • D. Partners permit unrestricted movement of goods, services, capital and labour among themselves under a single harmonised regulatory framework

Q4. With reference to the signing of the India–New Zealand Free Trade Agreement, consider the following: 1. The Agreement was signed at Bharat Mandapam, New Delhi, in April 2026. 2. India was represented by the Union Minister of Commerce and Industry and New Zealand by its Minister for Trade and Investment. 3. The Agreement could be signed only after it had been ratified by the legislatures of both countries, since ratification necessarily precedes signature in every Westminster-derived treaty system. 4. The Government of India has described the Agreement as the country's first women-led Free Trade Agreement. Which of the above is/are correctly identified?

  1. The Agreement was signed at Bharat Mandapam, New Delhi, in April 2026.
  2. India was represented by the Union Minister of Commerce and Industry and New Zealand by its Minister for Trade and Investment.
  3. The Agreement could be signed only after it had been ratified by the legislatures of both countries, since ratification necessarily precedes signature in every Westminster-derived treaty system.
  4. The Government of India has described the Agreement as the country's first women-led Free Trade Agreement.
  • A. 1 and 2 only
  • B. 2, 3 and 4
  • C. 1, 2 and 4
  • D. 1 and 3 only

Q5. In the context of the India–New Zealand Free Trade Agreement, the expression 'entry into force' refers to which one of the following?

  • A. The date on which the negotiated text was closed and initialled by the chief negotiators of the two sides
  • B. The date on which the agreement was formally signed by the trade ministers of the two countries in New Delhi
  • C. The date from which the agreement's obligations become legally binding, after both sides complete their domestic procedures and so notify each other
  • D. The date on which the agreement is notified to the World Trade Organization's Committee on Regional Trade Agreements by the parties

Q6. Under the India–New Zealand Free Trade Agreement, India kept a segment of its tariff lines in an exclusion list, granting no tariff concession. Consider the following: 1. Sheep meat 2. Dairy products such as milk, cheese and butter 3. Sugar 4. Gems and jewellery Which of the above is/are correctly identified as items in India's exclusion list?

  1. Sheep meat
  2. Dairy products such as milk, cheese and butter
  3. Sugar
  4. Gems and jewellery
  • A. 1, 2 and 3
  • B. 1 and 4 only
  • C. 2 and 3 only
  • D. 2, 3 and 4

Q7. Under the India–New Zealand Free Trade Agreement, New Zealand's elimination of duties on Indian exports operates in which one of the following ways?

  • A. Duties are eliminated in a single step from the date of entry into force, covering 100 per cent of New Zealand's tariff lines
  • B. Duties are eliminated in five equal annual instalments from entry into force, beginning with labour-intensive sectors such as textiles and leather
  • C. Duties are eliminated from the date of signature for 95 per cent of tariff lines, with the remaining lines phased out over a ten-year period
  • D. Duties are eliminated from entry into force, but only for the 118 sectors in which New Zealand has undertaken binding commitments

Q8. With reference to India–New Zealand economic relations, consider the following: 1. Bilateral merchandise trade rose from about USD 855 million in 2015–16 to about USD 1,298 million in 2024–25. 2. Before the 2026 Free Trade Agreement, India and New Zealand had already implemented a Comprehensive Economic Cooperation Agreement covering goods and services, which the FTA now replaces. 3. The Free Trade Agreement is among the fastest concluded by India with a developed economy. 4. New Zealand ranked among India's top ten merchandise trading partners in 2024–25, with bilateral trade exceeding USD 10 billion. Which of the above is/are correctly identified?

  1. Bilateral merchandise trade rose from about USD 855 million in 2015–16 to about USD 1,298 million in 2024–25.
  2. Before the 2026 Free Trade Agreement, India and New Zealand had already implemented a Comprehensive Economic Cooperation Agreement covering goods and services, which the FTA now replaces.
  3. The Free Trade Agreement is among the fastest concluded by India with a developed economy.
  4. New Zealand ranked among India's top ten merchandise trading partners in 2024–25, with bilateral trade exceeding USD 10 billion.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 3 and 4
  • D. 3 only

Q9. New Zealand has undertaken 'Most-Favoured-Nation treatment' in 139 services sectors under the Agreement. In trade agreements, such a commitment means which one of the following?

  • A. An undertaking to charge the partner the lowest tariff available anywhere in the world, irrespective of any agreement the partner may have
  • B. An undertaking to treat the partner's service suppliers exactly as favourably as its own domestic suppliers, in all sectors without exception
  • C. An undertaking to grant the partner permanent and irrevocable exemption from all regulatory conditions applicable to foreign suppliers
  • D. An undertaking to extend to the partner any more favourable treatment it subsequently grants to a third country in the covered sectors

Q10. With reference to India's trade agreements with developed economies, consider the following: 1. The India–UK Comprehensive Economic and Trade Agreement was signed in July 2025 in London. 2. Under the India–Australia Economic Cooperation and Trade Agreement, implemented in December 2022, India obtained preferential access to 100 per cent of Australia's tariff lines. 3. The India–UK CETA provides duty-free access for about 99 per cent of India's exports to the United Kingdom. 4. Like the India–New Zealand FTA, the India–UK CETA was concluded within nine months of the launch of its negotiations. Which of the above is/are correctly identified?

  1. The India–UK Comprehensive Economic and Trade Agreement was signed in July 2025 in London.
  2. Under the India–Australia Economic Cooperation and Trade Agreement, implemented in December 2022, India obtained preferential access to 100 per cent of Australia's tariff lines.
  3. The India–UK CETA provides duty-free access for about 99 per cent of India's exports to the United Kingdom.
  4. Like the India–New Zealand FTA, the India–UK CETA was concluded within nine months of the launch of its negotiations.
  • A. 1 and 4 only
  • B. 1, 2 and 3
  • C. 2 and 4 only
  • D. 2, 3 and 4

Q11. With reference to the Financial Services component of the India–New Zealand Free Trade Agreement, consider the following: 1. It was negotiated as a stand-alone chapter of the Agreement, separate from and independent of the Trade in Services Chapter. 2. It contains commitments supporting the provision of back-office and financial services support functions from India. 3. At the time of its conclusion, two Indian banks maintained subsidiary operations in New Zealand, while New Zealand had no banking or insurance presence in India. 4. It obliges New Zealand to grant unrestricted market access to all Indian banks and insurers in every financial sub-sector, with no national treatment limitations whatsoever. Which of the above is/are correctly identified?

  1. It was negotiated as a stand-alone chapter of the Agreement, separate from and independent of the Trade in Services Chapter.
  2. It contains commitments supporting the provision of back-office and financial services support functions from India.
  3. At the time of its conclusion, two Indian banks maintained subsidiary operations in New Zealand, while New Zealand had no banking or insurance presence in India.
  4. It obliges New Zealand to grant unrestricted market access to all Indian banks and insurers in every financial sub-sector, with no national treatment limitations whatsoever.
  • A. 1 and 4
  • B. 2 and 3
  • C. 1, 2 and 3
  • D. 2, 3 and 4