Daily Static Quiz Prelims Practice 2027
The WTO was established on 1 January 1995, replacing GATT, which had governed world trade since 1948.
- An FTA reduces trade barriers among members while each retains independent tariff policy with non-members.
- A Customs Union additionally requires members to adopt a common external tariff against non-members.
Both statements are correct. An FTA removes trade barriers among its members while each retains its own independent tariff policy towards outsiders, whereas a Customs Union goes a step further by additionally requiring members to adopt a common external tariff against non-members — a deeper integration step, as seen in the early European Union.
Option (d) is incorrect — MFN status is actually a non-discrimination principle: any trade advantage given to one WTO member must extend to all members equally, so it does NOT permit selective preferential treatment for close partners. Options (a), (b), and (c) are all correct — India was indeed a founding WTO member in 1995, has consistently opposed linking labour and environmental standards to trade talks, and amended its Patents Act in 2005 to comply with TRIPS.
- Assertion (A): India has been cautious about signing comprehensive FTAs with the EU and USA.
- Reason (R): India fears import surges in agriculture and manufacturing, and IP provisions raising generic medicine costs.
Assertion A is correct — India has negotiated with the EU and USA for years without concluding comprehensive agreements. Reason R is correct and directly explains A, since concerns over agricultural import surges, manufacturing competition, and TRIPS-plus IP terms that could raise generic medicine costs are what drive India's caution in these negotiations.
- India's merchandise exports crossed $400 billion for the first time in 2021–22.
- DGFT formulates India's Foreign Trade Policy.
- India supplies around 20% of global generic medicine exports.
- India signed the RCEP agreement in 2020 along with ASEAN nations.
Statement 1 is correct — India's merchandise exports crossed $400 billion for the first time in 2021–22. Statement 2 is correct, as the DGFT under the Ministry of Commerce formulates the Foreign Trade Policy. Statement 3 is correct, since India supplies roughly 20% of global generic medicine exports. Statement 4 is incorrect, as India walked out of RCEP negotiations in 2019 and did NOT sign the agreement along with ASEAN nations in 2020.
