UPSC Prelims Practice Questions — Government Relaxes Sugar Stockholding Limit for Bulk Consumers from 15 to 30 Days, Additional stock to be sourced exclusively from imported sugar under Advance Authorization Scheme (AAS) and Tariff Rate Quota (TRQ)

Q1. In the sugar stockholding limit orders of 2026, the expression 'bulk consumer' denotes which one of the following?

  • A. An institutional buyer such as a confectioner or soft-drink manufacturer whose sugar stock on any single day exceeds 400 tonnes, irrespective of monthly consumption
  • B. Any trader or processor of sugar whose sales turnover in the preceding sugar season exceeded 4,000 quintals of sugar
  • C. An institutional buyer whose average monthly sugar consumption over the preceding year is not less than 10 tonnes
  • D. Any khandsari unit or sugar mill with a crushing capacity above 500 TCD that also sells sugar directly to consumers

Q2. The stockholding limit order applicable to bulk consumers of sugar is notified by which one of the following?

  • A. The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution
  • B. The Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution
  • C. The Department of Agriculture and Farmers Welfare, Ministry of Agriculture and Farmers Welfare
  • D. The Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry

Q3. Consider the following statements comparing the Advance Authorisation Scheme with the Export Promotion Capital Goods (EPCG) Scheme: 1. Duty-free import under the Advance Authorisation Scheme is confined to inputs that are physically incorporated in the export product, whereas the EPCG Scheme covers import of capital goods used for producing export goods. 2. Exemption from Integrated Goods and Services Tax and Compensation Cess has been notified for imports under the Advance Authorisation Scheme, as it has for the EPCG Scheme and Export Oriented Units. 3. Unlike the EPCG Scheme, an Advance Authorisation carries no export obligation; the holder need only establish that the imported inputs were consumed domestically. Which of the statements given above is/are correct?

  1. Duty-free import under the Advance Authorisation Scheme is confined to inputs that are physically incorporated in the export product, whereas the EPCG Scheme covers import of capital goods used for producing export goods.
  2. Exemption from Integrated Goods and Services Tax and Compensation Cess has been notified for imports under the Advance Authorisation Scheme, as it has for the EPCG Scheme and Export Oriented Units.
  3. Unlike the EPCG Scheme, an Advance Authorisation carries no export obligation; the holder need only establish that the imported inputs were consumed domestically.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. The quantity of duty-free inputs that an Advance Authorisation permits is fixed, in the first instance, on the basis of which one of the following?

  • A. Ad-hoc norms fixed case by case by the sector-specific Norms Committees of the DGFT
  • B. The Minimum Import Price notified for that item by the Department of Commerce
  • C. The in-quota entitlement notified for that item under the relevant Tariff Rate Quota
  • D. The Standard Input Output Norms notified under the Foreign Trade Policy

Q5. In India, the modalities and allocation of a Tariff Rate Quota for import of a commodity such as raw sugar are notified by which one of the following?

  • A. The Directorate General of Foreign Trade, under the Department of Commerce
  • B. The Central Board of Indirect Taxes and Customs, under the Department of Revenue
  • C. The Department of Food and Public Distribution, under the Ministry of Consumer Affairs, Food and Public Distribution
  • D. The Directorate General of Trade Remedies, under the Department of Commerce

Q6. Tariff Rate Quotas in agricultural trade owe their origin to which one of the following?

  • A. The Agreement on Safeguards, which allows temporary quantitative restrictions during import surges
  • B. The Agreement on Import Licensing Procedures, which disciplines automatic and non-automatic licensing
  • C. The Agreement on Agriculture, under which non-tariff barriers were converted into tariffs
  • D. The Doha Ministerial Decision on implementation-related issues concerning market access

Q7. Consider the following statements regarding the sugar supply-management measures announced in 2026: 1. The duty-free import permitted alongside the stock limits was of 10 lakh tonnes of refined white sugar. 2. Sugar dealers were capped at 400 tonnes with effect from 1 August 2026, the cap remaining in force up to 30 November 2026. 3. Bulk consumers were capped at 15 days of their consumption requirement, the cap taking effect a month after the dealers' cap. Which of the statements given above is/are correct?

  1. The duty-free import permitted alongside the stock limits was of 10 lakh tonnes of refined white sugar.
  2. Sugar dealers were capped at 400 tonnes with effect from 1 August 2026, the cap remaining in force up to 30 November 2026.
  3. Bulk consumers were capped at 15 days of their consumption requirement, the cap taking effect a month after the dealers' cap.
  • A. 1 and 2 only
  • B. 1 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. The stock limit imposed on sugar dealers with effect from 1 August 2026, expressed in quintals, was:

  • A. 4,000 quintals, applicable to sugar dealers throughout the country for the period ending 30 November 2026
  • B. 4,000 quintals, applicable to every dealer, bulk consumer and sugar mill alike, without exception
  • C. 10,000 quintals, applicable to dealers in the deficit States alone and to no other category
  • D. 2,000 quintals, applicable permanently to all dealers from the 2026 sugar season onwards

Q9. Under the stock-limit provisions of the Essential Commodities Act as amended in 2020, the relief available to a processor of an agricultural produce is best described as which one of the following?

  • A. A stock limit applies to a processor only after the retail price of the commodity has risen by 50 per cent over the preceding year
  • B. A stock limit does not apply to a processor during the first three months of every marketing season, irrespective of quantity held
  • C. A stock limit applies to a processor at half the quantity prescribed for an ordinary dealer in the same commodity
  • D. A stock limit does not apply so long as the stock held does not exceed the ceiling of the processor's installed processing capacity

Q10. The Fair and Remunerative Price of sugarcane payable by sugar mills for a sugar season is approved by which one of the following?

  • A. The Cabinet Committee on Economic Affairs of the Union Cabinet
  • B. The Commission for Agricultural Costs and Prices under the Ministry of Agriculture and Farmers Welfare
  • C. The Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution
  • D. The Directorate of Sugar and Vegetable Oils in the Department of Food and Public Distribution

Q11. With reference to the world sugar economy, India's position is best described as which one of the following?

  • A. The largest producer and the largest exporter of sugar, and the second largest consumer
  • B. The largest producer and the largest consumer of sugar, and the second largest exporter
  • C. The second largest producer and the largest consumer of sugar, and the largest exporter
  • D. The largest consumer and the second largest producer of sugar, and the second largest exporter

Q12. With reference to the 2026 relaxation of the sugar stockholding limit for bulk consumers, consider the following: 1. Bulk consumers may hold sugar stocks up to 30 days of their consumption requirement. 2. The headroom above the earlier 15-day norm has to be met from sugar imported under the Advance Authorisation Scheme or the Tariff Rate Quota. 3. Raw sugar imported under the Tariff Rate Quota has to be converted into white or refined sugar and sold in the domestic market within a stipulated period. 4. Sugar imported under the Advance Authorisation Scheme may be disposed of freely in the domestic market on the same footing as duty-paid sugar. Which of the above is/are NOT correct?

  1. Bulk consumers may hold sugar stocks up to 30 days of their consumption requirement.
  2. The headroom above the earlier 15-day norm has to be met from sugar imported under the Advance Authorisation Scheme or the Tariff Rate Quota.
  3. Raw sugar imported under the Tariff Rate Quota has to be converted into white or refined sugar and sold in the domestic market within a stipulated period.
  4. Sugar imported under the Advance Authorisation Scheme may be disposed of freely in the domestic market on the same footing as duty-paid sugar.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 4 only