International Trade (Part – I)

Total Questions: 50

31. Which of the following countries is the largest source in India's total import? [M.P.P.C.S. (Pre) 2013]

(a) UAE
(b) Switzerland
(c) Hong Kong
(d) China

Correct Answer: (d) China

Solution:As per the question period as well as at present, China has the largest share in total imports of India. According to the Ministry of Commerce and Industry, Government of India, the top 3 sources of India's imports in terms of value and their percentage share in India's total merchandise imports are as follows:

S.N.	Country (Source of Import)	2022-23 Value (US $ million)	2023-24 (P) Value (US $ million)	2023-24 (P) Share (%)
1	China	98505.77	101745.54	15.06
2	Russia	46212.71	61431.24	9.10
3	UAE	53232.42	48018.10	7.11

S.N.

Country (Source of Import)

2022-23

Value (US $ million)

2023-24 (P)

Value (US $ million)

2023-24 (P)

Share (%)

China

98505.77

101745.54

15.06

Russia

46212.71

61431.24

9.10

UAE

53232.42

48018.10

7.11

32. Consider the following statements: [I.A.S. (Pre) 2020]

1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.

2. 'Textile and textile articles' constitute an important item of trade between India and Bangladesh.

3. In the last five years, Nepal has been the largest trading partner of India in South Asia.

Which of the statements given above is/are correct?

(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1,2 and 3

Correct Answer: (b) 2 only

Solution:The value of Indo-Sri Lanka trade has seen up and downs in the last decade. It was at US $ 3.02 billion in 2010, US $ 4.88 billion in 2011, US $ 3.73 billion in 2013, US $ 5.23 billion in 2017, US $ 4.59 billion in 2019 and US $ 3.61 billion in 2020, The value of Indo-Sri Lanka trade in 2021-22 was US $ 5.80 billion. Thus, the value of Indo-Sri Lanka trade has not consistently increased in the last decade. Hence, statement 1 is incorrect.

Bangladesh is India's largest trading partner in South Asia. According to the Economic Survey 2022-23, India's export to Bangladesh in 2021-22 stood at US $ 16.16 billion and imports during the same period was US $ 1.98 billion. Hence, statement 3 is incorrect.

Statement 2 is correct as 'textile and textile articles' constitute about 30 percent of trade between India and Bangladesh.

33. Assertion (A): The USA re-emerged as India's single largest import source in the early nineties. [I.A.S. (Pre) 1994]

Reason (R): With swift political developments in the erst- while Soviet Union, India gradually began to rely on the USA for its defence requirements.

In the context of the above two statements which of the following is correct?

(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true, but (R) is not a correct explanation of (A)
(c) (A) is true, but R is false
(d) (A) is false, but R is true

Correct Answer: (c) (A) is true, but R is false

Solution:As per the question period, only assertion was true and option (c) was the correct answer. At present, China is the largest source of imports of India, while India still much rely on Russia for its defence requirements. As per the SIPRI Report of March, 2024 (Trends in International Arms Transfers, 2023), major arms supplier countries to India during the year 2019- 23 were Russia (36%), France (33%) and USA (13%).

34. The largest part of India's export (in value) goes to: [U.P.P.C.S. (Mains) 2010]

(a) China
(b) Singapore.
(c) United Arab Emirates
(d) United States of America

Correct Answer: (d) United States of America

Solution:As per the question period option (c) was the correct answer. According to the Ministry of Commerce and Industry, Government of India, the top 4 destinations of India's exports in terms of value and their percentage share in India's total merchandise exports are as follows:

S.N.	Country (Export Destination)	Value 2022-23 (US$ million)	Value 2023-24 (P) (US$ million)	Share (%)
1	USA	78548.40	77523.12	17.74
2	UAE	31608.82	35625.19	8.15
3	Netherlands	21620.00	22369.05	5.12
4	China	15331.94	16666.52	3.81

Hence, at present the largest part of India's export goes to USA.

35. In the year 2009-10, which of the following countries accounted for largest share in exports from India? [U.P.P.C.S. (Mains) 2010, U.P.U.D.A./L.D.A. (Spl.) (Pre) 2010]

(a) UAE
(b) China
(c) USA
(d) Saudi Arabia

Correct Answer: (a) UAE

Solution:In the year 2009-10, UAE accounted for the largest share in exports from India. For the latest data, As per the question period option (c) was the correct answer.

According to the Ministry of Commerce and Industry, Government of India, the top 4 destinations of India's exports in terms of value and their percentage share in India's total merchandise exports are as follows:

S.N.	Country (Export Destination)	Value 2022-23 (US$ million)	Value 2023-24 (P) (US$ million)	Share (%)
1	USA	78548.40	77523.12	17.74
2	UAE	31608.82	35625.19	8.15
3	Netherlands	21620.00	22369.05	5.12
4	China	15331.94	16666.52	3.81

Hence, at present the largest part of India's export goes to USA.

36. In India's total exports, the share of United States of America is: [U.P.P.C.S. (Mains) 2002+]

(a) 30 percent
(b) 25 percent
(c) 20 percent
(d) 15 percent

Correct Answer: (c) 20 percent

Solution:As per the question period, option (c) was the correct answer. According to Ministry of Commerce and Industry, Government of India, the share of USA in India's total merchandise exports in the year 2022-23 was at 17.41 percent. It is estimated at 17.74 percent for the year 2023-24 (P).

37. The trade balance of India (merchandise and services) for December 2022 (provisional) is: [B.P.S.C. (Pre) 2022]

Correct Answer: (a) (-) 11.98 USD billion

Solution:The trade balance of India (merchandise and services) for December, 2022 (Provisional) was estimated as (-) 11.98 USD billion. However, as per final data it was at (-) 7.75 USD billion. The trade balance of India (merchandise and services) for December, 2023 (Provisional) is estimated at (-) 5.17 USD billion, while for the year 2023-24 (April-March) (Provisional), it is estimated at (-) 78.12 USD billion.

38. Which of the following statements is correct about the balance of trade of India? [R.A.S./R.T.S. (Pre) 2016]

(a) India's trade balance remained negative for the entire period from 1949-50 to 2015-16.
(b) India's trade balance remained positive for the entire period from 1949-50 to 2015-16.
(c) India's trade balance remained negative for the entire period from 1949-50 to 2015-16 except two years 1972- 73 and 1976-77, when it was positive.
(d) India's trade balance remained positive for the entire period from 1949-50 to 2015-16 except two year 1972- 73 and 1976-77, when it was negative.

Correct Answer: (c) India's trade balance remained negative for the entire period from 1949-50 to 2015-16 except two years 1972- 73 and 1976-77, when it was positive.

Solution:

India had a favourable (positive) balance of trade only in 1972-73 (Rs. 104 crore) and 1976-77 (Rs. 68 crore). As per the Economic Survey 2022-23, India's trade balance remained negative for the entire period from 1949-50 to 2021-22 except two years 1972-73 and 1976-77, when it was positive. India's total exports are US $ 437112.97 million and total imports are US $ 675429.87 million for the year 2023-24 (P).

39. In which of the following years was the trade balance favourable to India: [B.P.S.C. (Pre) 2015]

(a) 1970-71 and 1974-75
(b) 1972-73 and 1976-77
(c) 1972-73 and 1975-76
(d) 1971-72 and 1976-77

Correct Answer: (b) 1972-73 and 1976-77

Solution:

40. Assertion (A): India's trade deficit, after reaching the highest level in the year 2012-13 registered continuous decline since 2013-14. [U.P.P.C.S. (Mains) 2017]

Reason (R): There was a general decline in both P.O.L. and Non-P.O.L. deficits since 2013-14.

Codes:

(a) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(b) Both (A) and (R) are correct but (R) is not the correct explanation of (A)
(c) (A) is correct but (R) is false.
(d) (A) is false but (R) is correct.

Correct Answer: (a) Both (A) and (R) are correct and (R) is the correct explanation of (A).

Solution:India's trade deficit (as per the IMF Balance of Payments Manual 5) reached the highest level of US $ 195.66 billion in the year 2012-13. After that since 2013-14 (US $ 147.61 billion) it registered continuous decline till 2016-17 (US $ 112.44 billion). In this period, there was a general decline in both P.O.L. and Non-P.O.L. deficit, which played a crucial role in the declining of trade deficit. Therefore, both (A) and (R) are correct and (R) is the correct explanation of (A). However, after 2016-17 India's trade deficit increased again and it was at US $ 162.06 billion in 2017-18 and US $ 183.96 billion in 2018-19. In 2019-20, India's trade deficit stood at US $ 161.35 billion, while in 2020-21, it is at US $ 102.63 billion. After declining for two years it increased again to US $ 190.72 billion in 2021-22 and US $ 264.89 billion in 2022-23. In 2023- 24 [April-March (P)] it decreased to US$ 240.17 billion.

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