UPSC Prelims Practice Questions — India’s Export Growth in FY 2026-27: Strong Performance, New Milestones

Q1. With reference to the instruments India uses to keep duties out of the cost of export production, consider the following statements: Which of the statements given above is/are correct?

  1. Under Advance Authorisation, the inputs imported without duty are meant to be physically incorporated into the export product.
  2. Under Duty Free Import Authorisation, the duty-free entitlement is issued before exports take place, against an export plan projected by the exporter.
  3. The Rebate of State and Central Taxes and Levies refunds unrebated levies on every category of exported manufactured goods.
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 2 and 3 only
  • D. 1 only

Q2. An Indian manufacturer of engineering goods finds that the price of its exports includes electricity duty and State VAT on transport fuel. No other mechanism refunds these levies to it. Which of the following instruments is designed to neutralise this embedded cost?

  • A. RoDTEP
  • B. RoSCTL
  • C. EPCG
  • D. AA

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. India's current account deficit is typically far smaller than its merchandise trade deficit.
  2. India runs a large net surplus on invisibles, driven mainly by net services receipts and net personal transfers such as remittances.
  • 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

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The Foreign Trade Policy 2023, unlike its predecessors, has no fixed end date and is revised as and when needed.
  2. The Foreign Trade (Development and Regulation) Act, 1992 provides the legal framework for India's foreign trade policy.
  • 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

Q5. Consider the following assertion: Moving away from export incentives linked to export performance and towards schemes that refund taxes embedded in exported goods reduces India's exposure to challenges at the WTO. Which of the statements given above support/supports the assertion?

  1. The Rebate of State and Central Taxes and Levies is available only for apparel and made-ups.
  2. Under the WTO Agreement on Subsidies and Countervailing Measures, subsidies contingent upon export performance are prohibited.
  3. Under the same Agreement, remitting duties or taxes on an exported product, in amounts not exceeding those that have accrued, is not deemed to be a subsidy.
  • A. 3 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 and 2 only

Q6. With reference to preferential trade agreements under WTO rules, consider the following statements: Which of the statements given above are correct?

  1. A free trade agreement among WTO members is a permitted exception to most-favoured-nation treatment, provided it covers substantially all the trade between the parties.
  2. Preferential arrangements on goods among developing-country members can be covered by the Enabling Clause instead of GATT Article XXIV.
  3. Once a free trade agreement comes into force, its parties must extend the same preferential tariffs to all other WTO members.
  4. Liberalisation of trade in services within such an agreement is governed by GATS Article V, which requires substantial sectoral coverage.
  • A. 1 and 2 only
  • B. 1, 2, 3 and 4
  • C. 1, 2 and 4 only
  • D. 3 and 4 only

Q7. Consider the following facts: In April-October FY 2026-27, India's total exports grew by 16.66%. Over the same period, India's exports to ASEAN and SAFTA members grew faster than its overall exports. Which of the following inferences can validly be drawn from these facts?

  1. The share of ASEAN and SAFTA members in India's total exports rose during the period.
  2. India's exports to all destinations outside ASEAN and SAFTA, taken together, grew by less than 16.66% during the period.
  3. The faster growth of exports to ASEAN and SAFTA members was caused entirely by the tariff preferences available under India's trade agreements with them.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 1 only

Q8. With reference to the design of India's export-neutralisation instruments, consider the following statements: Which of the statements given above is/are correct?

  1. EPCG extends duty-free import to capital goods used in export production, whereas Advance Authorisation covers inputs.
  2. Advance Authorisation and RoDTEP both serve the principle that domestic duties and taxes should not be embedded in the price of exported goods.
  3. RoDTEP and RoSCTL operate by refunding levies after they have been borne, whereas Advance Authorisation operates by exempting duty at the point of import.
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 1 only
  • D. 1 and 3 only