International Trade (External Sector) Part-IV

Total Questions: 22

11. In which of the years given below growth rate of Indian exports was highest? [U.P.P.C.S. (Pre) 2008]

Correct Answer: (c) 2004-05
Solution:According to the Economic Survey 2007-08, among the given years, growth rate of Indian exports was highest in 2004-05 (30.8%). As per the Economic Survey 2022-23, Indian exports registered growth of 8.7% in 2018-19, while they contracted by 5.1% and 6.9 in 2019-20 and 2020-21, respectively (mainly due to COVID-19 Pandemic).

However, India's exports rose by 44.6 percent to about US$ 422 billion in 2021-22. As per the Ministry of Commerce and Industry, Government of India, India's merchandise export during April-March, 2023-24 (P) amounted to US$ 437113 million as compared to US$ 451070 million during April-March, 2022-23, reflecting a negative growth rate of 3.09 percent.

12. India became the largest exporter (2015) of rice, replacing which of the following countries? [U.P. P.C.S (Mains) 2016]

Correct Answer: (b) Thailand
Solution:India became the largest exporter of rice by replacing Thailand from the top in 2015. According to the data released by United States Department of Agriculture in April 2024, India is the largest rice exporting country (in volume) in 2022- 23, subsequently followed by Thailand, Vietnam and Pakistan (in volume terms).

Rice Production in India

Area of cultivation for rice
In fiscal year 2024, India had an estimated 47.6 million hectares of land area for rice cultivation. India is the second-largest producer of rice globally, and the largest exporter.
Production
India's rice production in 2023-24 is estimated to be 1378.25 lakh metric tons (LMT), a 20.70 LMT increase from the previous year.

13. The largest tea exporting country of the world is: [U.P.P.C.S. (Pre) 1998]

Correct Answer: (c) Kenya
Solution:As per the question period as well as at present, Kenya is the largest tea exporting country of the world. According to the data released by Tea Board of India, top four tea exporting countries in the years 2021 and 2022 are as follows: Kenya > China > Sri Lanka > India.

India is the second-largest tea producer globally and the world's largest producer of black tea. The tea industry is a significant contributor to the Indian economy, employing millions directly and indirectly.

Assam and West Bengal account for the majority of India's tea production, with Assam alone contributing 55%. Other significant tea-growing regions include the Nilgiris in South India, and the states of Tamil Nadu, Kerala, and Karnataka.

India is the second-largest tea producer overall and the largest producer of black tea. India is the 4th largest exporter of tea. In 2023-24, the value of tea exports was 781.79 million USD.

14. Consider the following statements: [I.A.S. (Pre) 2023]

Statement-I: Switzerland is one of the leading exporters of gold in terms of value.

Statement-II: Switzerland has the second largest gold reserves in the world.

Which one of the following is correct in respect of the above statements?

Correct Answer: (c) Statement-I is correct but Statement-II is incorrect
Solution:As per the OEC (The Observatory of Economic Complexity) World data, in 2022, Switzerland exported USD 101 billion in gold, making it the largest exporter of gold in the world. Switzerland is consistently the world's leading gold exporting country based on value.

Hence, Statement-I is correct As per the data of Indian Minerals Yearbook, 2022 (based on USGS, Mineral Commodity Summaries, 2022), top 5 countries with largest gold reserves are as follows: 1. Australia, 2. Russia, 3. South Africa, 4. USA, 5. Peru. Hence, Statement-II is incorrect.

15. The production of cultured pearl is an important cottage industry of: [I.A.S. (Pre) 1993]

Correct Answer: (d) Japan
Solution:Japan has been the world's major marine pearl producer for over a century, and has developed advanced technologies in pearl oyster culture and pearl production. The history of Japan's pearl culturing industry started with Kokichi Mikimoto, who dreamed of producing gem-quality pearls using the Akoya Oyster (Molluscs).

Pearl farming is the process of cultivating pearls within freshwater or saltwater oysters in a controlled environment.

  • It involves the process of cultivating pearls by inserting an irritant (nucleus) into the body of a mollusk, which then secretes layers of nacre around it. Over time, these layers form a pearl.
  • Nacre (the mother of pearl) is an organic-inorganic composite system, produced by some mollusks as an inner shell layer. The material is strong, resilient, and iridescent, and this is what the pearls are composed of.
  • This scientific and commercial practice leverages the natural biological process of mollusks to produce high-quality pearls in controlled conditions.
  • Mollusks are soft-bodied invertebrates that inhabit marine, freshwater, brackish waters, or land environments such as snails, octopi, oysters.

16. The largest producer and exporter of long staple cotton in the world is: [U.P. Lower Sub. (Spl.) (Pre) 2002]

Correct Answer: (c) USA
Solution:As per the question period, United States of America was the largest producer and exporter of long staple cotton in the world. As per the data of Cotton Outlook, in 2023-24 (P), top 4 long staple cotton producer countries are: 1. India, 2. Egypt, 3. USA, 4. China.

At present, according to OECD-FAO Agricultural Outlook 2023-2032 Report, USA is the world's largest cotton (long & medium staple) exporter, while India is the largest cotton (long & medium staple) producing country in the world followed by China, USA, Brazil and Pakistan.

17. Which of the following services was the largest foreign exchange earner for India in the year 2007-08 and 2008-092 [U.P.P.C.S. (Spl.) (Mains) 2008]

Correct Answer: (b) IT-Software services
Solution:As per the question period as well as at present among the given options, IT & Software services is the largest foreign exchange earner for India. IT-BPM revenues registered YoY growth of 15.5% during 2021-22 compared to 2.1% growth in 2020-21 with all sub-sectors showing double-digit revehin growth.

Within the IT-BPM sectors; IT services constitute the majority share (greater than 51%). Exports (including hard ware) witnessed a growth of 17.2% in 2021-22 compared to 1.9% growth in 2020-21 owing to the increased reliance of business on technology, the roll-out of cost-reducing deals and the use of core operations.

18. Assertion (A): India's software exports increased at an average growth rate of 50% since 1995-96. [I.A.S. (Pre) 2001]

Reason (R): Indian software companies were cost-effective and maintained international quality.

Correct Answer: (a) Both A and R are true and R is the correct explanation of A
Solution:During the question period, Indian software industry and software exports had been growing at a consistently high rate of over 50% annually. During the IX Plan (1997-2002), the overall software industry grew at a compound annual growth rate (CAGR) of 52%, while software export industry grew at a CAGR of 57%.

The consistent growth in export of software can be largely attributed to the comparative cost advantage to the developed world in outsourcing from India. Indian software companies were cost-effective and maintained international quality. Indian software companies had a unique distinction of providing efficient software solutions with cost and qualities as an advantage by using state-of-the-art technologies.

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

1. In the last five years, Indian software exports have increased at a compound annual growth rate of about 60%.

2. The software and service industry in India registered an overall growth of about 28% in rupee terms during the year 2001-2002.

Which of these statements is/are correct?

Correct Answer: (c) Both 1 and 2
Solution:As per the question period both of the given statements were correct. According to the data released by the Reserve Bank of India in October 2023, India's export of software services (excluding exports through commercial presence) stood at US $ 185.5 billion during 2022-23, registering 18.4 percent growth over the previous year.

Export of computer services and ITES/BPO services contributed 67.3 percent and 32.7 percent respectively, of the total software services exports. The USA and Canada were the major destination for software exports with 56 percent share. Europe had 30.8 percent share, nearly half of which was in the UK.

20. In terms of economy, the visit by foreign nationals to witness the XIX Commonwealth Games in India amounted to: [I.A.S. (Pre) 2011]

Correct Answer: (a) Export
Solution:In the context of economy, the visit by foreign nationals to watch the XIX Commonwealth Games in India amounted to export. The income generated from those visits falls under tourism, which is an invisible export.

Exports are goods and services that are produced in one country and sold to buyers in another. The visit of foreign nationals to India amounted to export as Foreign nationals will buy Indian goods and use Indian services. Also, India will get foreign currency.

An import is a good or service bought in one country that was produced in another. Suppose a citizen of the US buying goods and services in India, then it amounted to Import for The US. Because its citizen is buying goods and services from another country.

Production - the process of making or growing goods to be sold.
Consumption - the amount used or eaten