UPSC Prelims Practice Questions — India–New Zealand FTA to Come into Force on 20th October 2026 on Vijay Dashmi, Opening New Opportunities for Indian Exporters

Q1. With reference to the making and implementation of international trade agreements by India, consider the following statements: Which of the statements given above is/are correct?

  1. Because the executive power of the Union extends to matters on which Parliament can legislate, the Union Government can enter into a trade agreement without prior approval of Parliament.
  2. Parliament can make a law to implement an international agreement even if the subject of that law falls in the State List.
  3. A trade agreement signed by India binds it to apply the agreed preferential tariffs from the date of signature, whatever entry-into-force date the agreement itself specifies.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 3 only
  • D. 1 and 2 only

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Once India and New Zealand signed their Free Trade Agreement in April 2026, both countries were bound to apply its preferential tariffs from that date.
  2. In India, the Union executive exercises the power to enter into treaties, and parliamentary legislation is needed only where implementing a treaty requires a change in domestic law.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. Under the GATT framework, which one of the following features distinguishes a customs union from a free trade area?

  • A. Members apply substantially the same duties to imports coming from non-member countries
  • B. Members must notify the arrangement to the multilateral trading body for its review
  • C. Members may keep lists of sensitive products that are excluded from liberalisation
  • D. Members eliminate duties on substantially all trade in goods originating within the group

Q4. With reference to preferential rules of origin in free trade agreements, consider the following statements: Which of the statements given above is/are correct?

  1. They decide whether a good qualifies as originating in a partner country, using criteria such as a minimum share of value added or a change in tariff classification.
  2. They are meant to stop goods from a non-member country being routed through the partner with lower external tariffs to claim preferential duty in the other partner.
  3. Complex origin criteria and certification requirements can reduce the share of eligible exports that actually claim the preferences offered by an agreement.
  • A. 1 and 3 only
  • B. 1 and 2 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q5. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Rules of origin remain an essential part of the India–New Zealand Free Trade Agreement even though New Zealand eliminates duties on all its tariff lines for goods from India.
  2. Without origin criteria, goods made in a third country could pass through India and enter New Zealand at zero duty while that third country pays New Zealand's normal tariffs on direct shipments.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q6. Consider the following pairs of activity and the mode of supply under the WTO's General Agreement on Trade in Services (GATS): Which of the pairs given above are correctly matched?

  1. An Indian Ayurveda practitioner goes to New Zealand on a temporary work visa to treat patients there — Presence of natural persons
  2. An Indian student enrols in a two-year course at a university in New Zealand — Consumption abroad
  3. An Indian IT company sets up a subsidiary in Auckland to serve local clients — Cross-border supply
  4. A New Zealand firm in Wellington delivers software services online to clients in India — Cross-border supply
  • A. 1 and 2 only
  • B. 1, 2 and 4 only
  • C. 1, 3 and 4 only
  • D. 2 and 3 only

Q7. The India–New Zealand Free Trade Agreement contains most-favoured-nation (MFN) commitments by New Zealand in about 139 services sub-sectors. Suppose that after the agreement enters into force, New Zealand gives a third country more favourable access in one of these sub-sectors through a later trade agreement. Consider the following consequences: Which of the consequences given above would follow?

  1. New Zealand would have to extend the same more favourable treatment to Indian service suppliers in that sub-sector.
  2. India would have to extend to that third country the same treatment it gives New Zealand in that sub-sector.
  3. Indian suppliers would also become entitled to that third country's treatment in sub-sectors where New Zealand made no MFN commitment to India.
  • A. 1 and 3 only
  • B. 2 only
  • C. 2 and 3 only
  • D. 1 only