UPSC Prelims Practice Questions — Container Manufacturing Promotion Scheme

Q1. With reference to interest subvention and sales-linked operational assistance as tools of industrial policy, consider the following statements: Which of the statements given above is/are correct?

  1. An interest subvention lowers the cost of borrowed capital, and its benefit depends on the loan taken rather than on the number of units produced.
  2. A per-unit payment made only on units sold ties the fiscal outlay to actual commercial production rather than to capacity installed.
  3. An interest subvention is better suited than a sales-linked payment to offsetting a recurring per-unit operating-cost disadvantage against established foreign producers.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 1 only
  • D. 2 and 3 only

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

  1. Under the WTO Agreement on Subsidies and Countervailing Measures, a subsidy conditional on the use of domestic over imported goods can be challenged only if the complaining member shows that it has caused adverse effects to its interests.
  2. The WTO treats subsidies contingent on the use of domestic over imported goods, like export subsidies, as designed to directly affect trade.
  • 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. With reference to WTO disciplines on local-content conditions attached to industrial incentives, consider the following statements: Which of the statements given above is/are correct?

  1. The Illustrative List annexed to the TRIMs Agreement covers measures that require an enterprise to purchase or use products of domestic origin.
  2. The TRIMs Agreement applies only to measures imposed on foreign-owned enterprises, so a local-content condition applying equally to domestic firms falls outside it.
  3. A local-content condition can conflict with the national-treatment obligation of GATT because it treats imported inputs less favourably than like domestic inputs.
  • A. 1 only
  • B. 1, 2 and 3
  • C. 2 and 3 only
  • D. 1 and 3 only

Q4. Under a scheme, a newly built container plant is eligible only if its annual capacity is at least 1,00,000 TEUs. A proposed plant will make 45,000 forty-foot containers and 15,000 twenty-foot containers a year. Which one of the following is correct?

  • A. It qualifies, as its annual capacity works out to 1,05,000 TEUs.
  • B. It does not qualify, as its annual capacity works out to 60,000 TEUs.
  • C. It does not qualify, as its annual capacity works out to 82,500 TEUs.
  • D. It qualifies, as its annual capacity works out to 1,20,000 TEUs.

Q5. With reference to greenfield and brownfield investment, consider the following statements: Which of the statements given above is/are NOT correct?

  1. A firm building a new container plant on a vacant site makes a greenfield investment even if it already runs similar plants elsewhere.
  2. Expanding or upgrading an existing production facility is a brownfield investment.
  3. A foreign investor's acquisition of an existing Indian factory, with no expansion, counts as greenfield investment because it brings fresh foreign capital into the country.
  • A. 1 only
  • B. 1 and 3 only
  • C. 3 only
  • D. 2 and 3 only

Q6. Consider the following facts: India has had negligible domestic container manufacturing. It imports nearly 2 million empty containers every year to meet domestic demand and for repositioning. The availability of containers for Indian trade has fluctuated with global freight cycles and route disruptions. Which of the following inferences can be drawn from the above?

  1. The availability of empty containers to Indian exporters depends partly on supply from outside the country.
  2. Indian ports lack the handling capacity to receive large container vessels.
  3. Domestic container manufacturing will by itself bring down ocean freight rates on Indian trade routes.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 only

Q7. Consider the following assertion: Shipping containers have come to be treated as strategic logistics assets rather than mere packaging. Which of the following statements support the above assertion?

  1. Most of the world's merchandise trade by volume moves by sea, and containerised cargo accounts for a large share of the value of international trade.
  2. Disruptions on major shipping routes can leave empty containers stranded far from where exporters need them.
  3. The Twenty-foot Equivalent Unit is the standard unit used to express container and port capacity.
  4. A country without domestic container production must import or reposition empty boxes to meet its trade needs.
  • A. 1 and 3 only
  • B. 1, 2 and 4 only
  • C. 1, 2, 3 and 4
  • D. 2 and 4 only

Q8. With reference to the constitutional and legal position of ports in India, consider the following statements: Which of the statements given above is/are NOT correct?

  1. The declaration and delimitation of major ports, and the constitution and powers of port authorities in them, fall under the Union List.
  2. Non-major ports are placed in the State List, so only State Legislatures can make laws on them.
  3. The administration of each major port is vested in a Board constituted under a central law.
  • A. 2 only
  • B. 1, 2 and 3
  • C. 1 and 3 only
  • D. 3 only