International Trade (External Sector) Part-III

Total Questions: 50

31. Consider the following statements: [I.A.S. (Pre) 2003]

1. India's import of crude and petroleum products during the year 2001-02 accounted for about 27% of India's total imports.

2. During the year 2001-02, India's exports had increased by 10% as compared to the previous year.

Which of these statements is/are correct?

Correct Answer: (a) Only 1
Solution:India's import of crude and petroleum products during the year 2001-02 accounted for about 27.2% of India's total imports. In comparison to previous year India's export growth rate was negative (-1.6%) in 2001-02. Hence, option (a) was the correct answer. According to Ministry of Commerce and Industry, Government of India, share of petroleum, crude products in total imports is at 26.52% in 2023-24 (P) and 29.4% in 2022-23.

32. Consider the following items imported by India: [I.A.S. (Pre) 1996]

1. Capital goods

2. Petroleum

3. Pearls and precious stones

4. Chemicals

5. Iron and Steel

The correct sequence of the decreasing order of these items (as per 94-95 figures), in terms of value is:

 

Correct Answer: (c) 2, 1 ,3, 4, 5
Solution:As per the question period, sequence given in option (c) was the correct answer. According to the Economic Survey 2022- d choose your answer with 23, import values (in Rs. cr.) of these items in recent years are as follows:
ItemsImport value (Rs. cr.) 2020-21Import value (Rs. cr.) 2021-22
Capital goods406644510074
Petroleum (POL)6113531207803
Pearls, precious and semiprecious stones139024231279
Chemical elements and compounds209326308882
Iron & Steel6128894053

33. The biggest LNG supplier to India is: [U.P.P.C.S. (Mains) 2011]

Correct Answer: (c) Qatar
Solution:Qatar is the largest liquefied natural gas (LNG) supplier to India. India imports LNG mainly from Qatar and some other countries through long-term agreements and also takes steps to diversify its own natural gas resources. As per the Statistical Review of World Energy 2023, India imported 28.4 billion cubic metres (bcm) of LNG in 2022, with Qatar (14.7bcm), UAE (3.8 bcm), USA (3.3 bcm), Nigeria and Oman (1.3 bcm each) being the top suppliers.

34. The term 'West Texas Intermediate', sometimes found in news, refers to a grade of: [I.A.S. (Pre) 2020]

Correct Answer: (a) Crude oil
Solution:'West Texas Intermediate' (WTI) refers to a grade of crude oil. It is a specific grade of crude oil and one of the three major oil benchmarks used in trading, along with Brent and Dubai crude.

Sourced primarily in inland Texas, WTI is one of the world's highest-quality oils. WTI is the underlying commodity for the NYMEX's oil futures contract. WTI is often compared to Brent crude, which is the benchmark for two-thirds of the world's oil contracts.

WTI is the main oil benchmark for North America, as it is sourced from the United States. It originates mainly in the Permian Basin, the site of the nation's highest-producing oil field. The oil travels via pipeline from Texas to refineries in the Midwest and the Gulf of Mexico

35. Goods imported at Haldia Port is: [U.P.P.C.S (Pre) 1992]

Correct Answer: (c) Steel
Solution:The Port of Haldia is a major port and industrial city in West Bengal. The main goods imported at Port of Haldia are: fertilizers, foodgrains, sugar, paper and newsprint, coking coal, petroleum and metallurgical coke, soda ash, iron and steel, limestone, machinery, scrap, vegetables, and general cargoes.

List of Major Ports in India 

Sl. No.Name of the PortState
1.Kolkata PortWest Bengal
2.Paradip PortOrissa
3.Visakhapatnam PortAndhra Pradesh
4.Kamarajar PortTamil Nadu
5.Chennai PortTamil Nadu
6.Tuticorin PortTamil Nadu
7.Cochin PortKerala
8.New Mangalore PortKarnataka
9.Mormugao PortGoa
10.Mumbai PortMaharashtra
11.Jawaharlal Nehru PortMaharashtra
12.Kandla PortGujarat
13.Port Blair PortAndaman and Nicobar Islands

36. Import procedure begins with: [U.P.P.C.S (Pre) 2011, U.P.P.C.S. (Mains) 2011]

Correct Answer: (a) Indent
Solution:After the initial formalities are over and the importer has obtained the necessary amount of foreign exchange for im- port (through the Letter of credit), the next step in the import of goods is that of placing the order. This order is known as Indent and import process begins with it.
  • Indent: An indent is the initial document in the import process. It outlines the specific requirements of the goods being imported, such as quantity, quality, price, and mode of payment.
  • Mate's Receipt: This document is issued by the ship's captain to the port superintendent, confirming the goods have been loaded on board. It's a receipt of cargo, but it comes after the indent.
  • Marine Insurance: Marine insurance is a crucial part of the import process to cover potential losses during transit. It is typically arranged after the indent and order confirmation.
  • Shipping Bill: This document is prepared by the exporter and is used by customs authorities for export procedures. It is not part of the import process.

37. A Letter of Credit has to be produced by: [U.P.P.C.S (Pre) 2011]

Correct Answer: (b) An importer
Solution:A Letter of Credit (L/C) is a written undertaking by the importer's bank, known as the Issuing Bank, on behalf of its customer, the Importer (Applicant), promising to effect payment in favour of the Exporter (Beneficiary) up to a stated sum of money, within a prescribed time limit and against stipulated documents. After the trading parties agree on a sale of goods, the Importer requests that its bank (the Issuing Bank) issue a Letter of Credit in favour of the Exporter.

38. A 'Letter of Credit' is produced by: [U.P.P.C.S. (Mains) 2009, U.P. Lower Sub. (Pre) 2013]

Correct Answer: (b) An importer
Solution:A Letter of Credit (L/C) is a written undertaking by the importer's bank, known as the Issuing Bank, on behalf of its customer, the Importer (Applicant), promising to effect payment in favour of the Exporter (Beneficiary) up to a stated sum of money, within a prescribed time limit and against stipulated documents. After the trading parties agree on a sale of goods, the Importer requests that its bank (the Issuing Bank) issue a Letter of Credit in favour of the Exporter.

39. Which of the following items had the largest share in India's export in the year 2004-05? [U.P.P.C.S. (Pre) 2006]

Correct Answer: (c) Manufactured Goods
Solution:As per the question period as well as at present, manufactured goods have the largest share in total exports of India. According to the Economic Survey 2022-23, percentage share of major exports is as follows:
Commodity Group2020-212021-222022-23 (P) (Apr.-Sep.)
Manufactured Goods71.267.858.9
Crude & Petroleum Products (incl. Coal)9.216.422.7
Agriculture & allied products14.311.911.6
Ores and Minerals3.22.01.5

Note: Economic Survey 2023-24 is not released till end-June, 2024.

40. The table given below depicts the composition of India's exports between 1992-93 and 1994-95: [I.A.S. (Pre) 1996]

The changing composition of the export trade is indicative of structural transformation of Indian economy in favour of modernization. The best indicator of this trend is the:

Items1992-931993-941994-95
(a) Agriculture and allied products16.918.015.9
(b) Ores & Minerals4.04.03.7
(c) Manufactured goods75.575.678.0
(d) Petroleum product2.61.81.9
Correct Answer: (d) increase in the share of manufactured products in exports
Solution:The increase in the share of manufactured products in exports indicates that the economy is going towards modernization because in the beginning stage of development an economy generally export agricultural goods, and import manufactured products. The increase of industrial production and exports of manufactured products is indicative of structural transformation of Indian economy in favour of modernization.