International Trade (Part – III)

Total Questions: 50

1. What is the full form of EPCG? [B.P.S.C. (Pre) 2019]

(a) Export Promotion Consumer Goods
(b) Exchange Programme for Consumer Goods
(c) Export Promotion Capital Goods
(d) Expert Programme for Credit Generation
(e) None of the above/More than one of the above

Correct Answer: (c) Export Promotion Capital Goods

Solution:The full form of EPCG is 'Export Promotion Capital Goods'. EPCG scheme helps in facilitating the import of capital goods for manufacturing quality goods and to augment the competitiveness of India's export. This scheme enables the import of capital goods that are used in the pre-production, production, and post-production without the payment of customs duty. However, the scheme is subject to an export value equivalent to 6 times of duty saved on the importation of such capital goods within 6 years from the date of issuance of the authorization.

2. The Government of India announced a new scheme 'NIRVIK' in the Budget for 2020-21. Which of the following sectors of economy will take the benefit from this scheme? [B.P.S.C. (Pre) 2020]

Correct Answer: (d) Export sector

Solution:In the Union Budget 2020-21, the Finance Minister Nirmala Sitharaman announced 'NIRVIK' (Niryat Rin Vikas Yojna; निर्यात ऋण विकास योजना) Scheme to provide enhanced insurance cover and reduce premium for small exporters. This scheme is aimed to achieve higher export credit disbursement with simplified procedures for claim settlements.

Features of the NIRVIK Scheme

Insurance coverage will be up to 90% of the principal amount and interest
The extended coverage will make sure that foreign export credit interest rates are below 4%. The rupee export credit interest rates will be limited to 8%
Both pre and post-shipment credit will be covered under the new scheme
Borrowers from the gens, jewellery and diamond with a limit of over Rs 80 crore will have a higher premium rate as compared to those from other sectors as the loss ratio is high.
Those accounts that have limits below Rs. 80 crore, the premium rates will be moderated to 0.60 per annum. For those whose limits are beyond Rs. 80 Crore, the rates will be 0.72 per annum.
In the event that there will be losses exceeding Rs. 10 Crores, the exporter will be subjected to inspection by the ECGC Banks shall pay a premium to the ECGC on a monthly basis as the principal and interest are covered for both outstandings.

3. India Brand Equity Fund was established in: [U.P.P.C.S. (Pre) 1997]

(a) 1992
(b) 1995
(c) 1996
(d) 1997

Solution:India Brand Equity Fund/Foundation (IBEF) is a Trust established by the Department of Commerce, Ministry of Commerce and Industry in 1996. It is an export promotion agency for the distribution and sale of Indian products internationally. IBEF's primary objective is to promote and create international awareness of the Made in India label in markets overseas and to facilitate dissemination of knowledge of Indian products and services.

4. Morgan Stanley has rated India as one of the most emerging markets in 1998 and has placed it at: [U.P.P.C.S. (Pre) 1998]

(a) 1st position
(b) 2nd position
(c) 3rd position
(d) 4th position

Correct Answer: (c) 3rd position

Solution:Morgan Stanley had rated India as one of the most emerging markets in 1998 and had placed it at 3rd position. In this assessment of Morgan Stanley, Brazil and Mexico were ranked First and Second, respectively. As per a February, 2023 Report, among emerging markets, Morgan Stanley is 'most bullish' on India as favourable Union Budget has further boosted the India outlook.

A recent report by Morgan Stanley (global financial services firm) highlights the significant changes that have taken place in India over the past decade.

The report challenges the skepticism surrounding India's potential and emphasizes the transformative reforms implemented in recent years.
Morgan Stanley counters global opinions of India's underperformance. It emphasizes India's growth as the second-fastest-growing economy and top-performing stock market.
India's 401(k) moment is the term used by Morgan Stanley to describe moment refers to the increase in household savings and investments in financial assets, inspired by the US 401(k) retirement savings plan.

5. Tourism industry in India is quite small compared to many other countries in terms of India's potential and size. Which one of the following statements is correct in this regard? [LA.S. (Pre) 1999]

(a) Distances in India are too far apart and its luxury hotels are too expensive for western tourists
(b) For most of the months India is too hot for western tourists to feel comfortable
(c) Most of the picturesque resorts in India such as in the North-East and Kashmir are, for all practical purposes, out of bounds
(d) In India, the infrastructure required for attracting tourists is inadequate

Correct Answer: (d) In India, the infrastructure required for attracting tourists is inadequate

Solution:In terms of India's potential and size, tourism industry in India is quite small compared to many other countries because in India the infrastructure required for attracting tourists is inadequate.

Tourism in India: Growth, Contributions and Global Position

Tourism's Contribution to GDP: In the financial year 2022-23, the tourism sector contributed 5% to India's GDP, a substantial increase from 1.75% in 2021-22.
Foreign Tourist Arrivals: In 2023, India recorded 9.24 million foreign tourist arrivals, marking a 43.5% increase compared to 6.44 million in 2022.
Tourism Revenue: Foreign exchange earnings from tourism stood at 2.3 lakh crore in 2023, reflecting a 65% growth from 1.39 lakh crore in 2022.
FDI Policy: 100% Foreign Direct Investment (FDI) is allowed in tourism infrastructure, including hotels, resorts, and recreational facilities.
Global Ranking: India ranked 6th in Travel & Tourism's GDP contribution in 2022 and 54th out of 117 countries in the 2021 Global Travel and Tourism Development Index.

6. According to the 2006 Report of World Tourism Organization, maximum tourists visited that year to: [U.P.P.C.S. (Pre) 2006]

(a) France
(b) Switzerland
(c) Germany
(d) United States of America

Correct Answer: (a) France

Solution:As per the question period as well as for 2022, option (a) is the correct answer. According to India Tourism Statistics 2023, France was the most visited place by tourists globally in the year 2022, followed by Spain and USA.

About United Nations World Tourism Organization (UNWTO)

It is the United Nations agency responsible for the promotion of responsible, sustainable and universally accessible tourism.
Functions: It serves as a global forum for tourism policy issues and encourages the implementation of the Global Code of Ethics for Tourism.
It was established in 1975.
Members: Membership of the UNWTO includes 159 countries.
Official languages: The official languages of UNWTO are Arabic, Chinese, English, French, Russian and Spanish.
Organisation structure:
General Assembly: It is the principal gathering of the World Tourism Organization. It is composed of full members and associate members. It meets every two years.
Executive Council: It is UNWTO's governing board. It is composed of 35 members elected by the General Assembly in a ratio of one for every five full members. It meets at least twice a year.
Headquarter: Madrid, Spain.

7. According to report of U.N. World Tourism Organization (2010) the most visited country in the world is: [U.P.P.C.S. (Mains) 2013]

(a) U.S.A
(b) Spain
(c) France
(d) Italy

Correct Answer: (c) France

Solution:According to United Nations World Tourism Organization's Report 2010, France was the most visited country in the world. France is still the most visited country in 2022.

About United Nations World Tourism Organization (UNWTO)

It is the United Nations agency responsible for the promotion of responsible, sustainable and universally accessible tourism.
Functions: It serves as a global forum for tourism policy issues and encourages the implementation of the Global Code of Ethics for Tourism.
It was established in 1975.
Members: Membership of the UNWTO includes 159 countries.
Official languages: The official languages of UNWTO are Arabic, Chinese, English, French, Russian and Spanish.
Organisation structure:
General Assembly: It is the principal gathering of the World Tourism Organization. It is composed of full members and associate members. It meets every two years.
Executive Council: It is UNWTO's governing board. It is composed of 35 members elected by the General Assembly in a ratio of one for every five full members. It meets at least twice a year.
Headquarter: Madrid, Spain.

8. Which of the following countries was the most favourite (in terms of total number of visitors) destination of Indian Tourists in the year 2010? [U.P.R.O/A.R.O. (Mains) 2013]

(a) Australia
(b) Singapore
(c) United States of America (U.S.A.)
(d) United Kingdom (U.K.)

Correct Answer: (b) Singapore

Solution:As per the question period, option (b) was the correct answer. According to the 'India Tourism Statistics 2023', top 5 destination countries for Indian Nationals Departures (IND) during 2022 were as follows:

S.N.	Destination Country	% Share
1	United Arab Emirates	28.0
2	Saudi Arabia	11.5
3	USA	8.0
4	Singapore	4.7
5	United Kingdom	4.4

9. In which of the following years, Foreign Tourist Arrivals (FTAs) had registered decline over the previous year in the country? [U.P.P.C.S. (Mains) 2010]

(a) 2006-07
(b) 2007-08
(c) 2008-09
(d) 2009-10

Correct Answer: (d) 2009-10

Solution:According to the 'India Tourism Statistics 2023', Foreign Tourists Arrivals (FTAs) in India and percentage change over previous year is as follows:

Year	FTAs in India (in Million)	Percentage Change over Previous Year
2006	4.45	13.5
2007	5.08	14.3
2008	5.28	4.0
2009	5.17	-2.2
2010	5.78	11.8
2016	8.80	9.6
2017	10.04	14.1
2018	10.56	5.2
2019	10.93	3.5
2020	2.74	-74.9
2021	1.52	-44.5
2022	6.44	321.5

10. Which among the following is the Top State in India in terms of Foreign Tourist Visits? [Chhattisgarh P.C.S. (Pre) 2011]

(a) Rajasthan
(b) Goa
(c) Maharashtra
(d) Delhi

Correct Answer: (c) Maharashtra

Solution:As per the question period as well as at present among the given States, option (c) is the correct answer. According to the 'India Tourism Statistics 2023', the share of top 5 States/ UTs of India in number of Foreign Tourist Visits in 2022 is as follows:

Rank	State/UT	Foreign Tourist Visits in 2022 (Number in million)	Percentage share (%)
1	Gujarat	1.78	20.70
2	Maharashtra	1.51	17.6
3	West Bengal	1.04	12.08
4	Delhi	0.82	9.50
5	Uttar Pradesh	0.65	7.56

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