[Economic Survey Ch7] International Trade, FTA, PTA, ASIDE, E-BRC, CEPA vs CECA Difference Explained

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टाइम होता नही,निकालना पड़ता है!

19 Days to CGL13'T2
39 Days to IBPS-PO
47 Days to CGL14
103 Days to Mains
  1. Baltic Dry Index (BDI)
  2. India’s Chief import exports
  3. Market Diversification
  4. Top three trading partners
  5. Trade surplus / deficit?
  6. WTO Negotiations and India
  7. Trade agreements
    1. PTA
    2. FTA
    3. Customs Union
    4. Common Market
    5. Economic union
    6. CEPA vs CECA
  8. India’s trade agreements
  9. Trade agreements: Recent development
    1. Problem Areas: Export
    2. Problem Areas: Ease of Doing business
  10. Measures to improve trade?
    1. Foreign Trade Policy annual supplement 2013
    2. Salient Features FTP Annual Supplement 2013
    3. E-BRC
    4. ASIDE scheme
    5. Towns of Export Excellence
    6. Interest Subvention
    7. Special Economic Zones
    8. VKGuy
    9. RBI’s measures
    10. Anti-Dumping
  11. Chindu’s budget speech (2013): Foreign Trade
    1. CAD worrysome
    2. To boost trade
    3. Taxation: Export
    4. Coal dependence
    5. IT
  12. What is countervailing duty (CVD)?
  13. Conclusion
  14. Important Summits
  15. Trade Blocs/ Regional Groups
  16. Mock Question

Baltic Dry Index (BDI)

  • London based Baltic Exchange, releases this index number on daily basis.
  • It measures changes the cost to transport raw materials by sea.
  • If Baltic Dry index number increases = more raw material is getting shipped= world economy is doing good (and will do good).
  • If Baltic Dry index number decreases = there is decrease in export of raw material / pre-production items= something bad is about to happen with world economy.
  • In the recent times, BDI was highest in 2008 and then started falling. There was a small rise in BDI index during Nov.2012, but still it is nowhere near to the high level of 2008.
  • Meaning, world economy hasn’t yet recovered from the fallout in US and EU.

India’s Chief import exports

ImportExport
  1. Petroleum
  2. Gold
  3. Electronic goods
  4. Pearls, precious stones
  5. Machinery except electronics
  1. Petroleum (crude and products)
  2. Gems and jewelry
  3. Transport equipment, machinery
  4. Drugs, pharmaceuticals, chemicals

^As per Commerce chapter India 2013 (Yearbook.)

  • Compositional changes in India’s export basket have been taking place over the years.
  • The share of manufacturing exports fell drastically, mainly due to the fall in shares of traditional items like textiles and leather and leather manufactures even though the share of engineering goods and chemicals and related products increased.

The rise or fall in India’s export depends mainly on following factors

  • World growth
  • Trading partner’s growth
  • Exchange rates

Market Diversification

  • India has been fairly successful in diversifying its export markets from developed countries like the US and Europe to Asia and Africa
  • This has helped us get reduce the damage from global crisis of 2008 and the recent global slowdown.
  • Region-wise, while India’s exports to Europe and America have declined, its exports to Asia and Africa have increased

Top three trading partners

  • In recent years, the top three trading partners of India = US, UAE, China (whoever their rank /position keeps changing like in the game of musical chairs).
  • For 2011-12: first is China, second is UAE and third is USA. (2012-13 data yet to come)

Trade surplus / deficit?

  • India’s trade deficit = 10% of GDP. This is one of the highest in the world, and hence very disturbing.
  • As per 2011-12 data, Countrywide, India has
Trade surplus withTrade deficit with
  1. UAE (this turned negative in 2012 though)
  2. USA,
  3. Singapore
  4. Hong Kong.
  1. China
  2. Switzerland (mainly due to gold imports)

WTO Negotiations and India

  • Basics of WTO explained: http://mrunal.org/2012/05/wto-doha-made-easy.html
  • Pascal Lamy= Chief of WTO.(update: Roberto Azevedo, a top Brazilian trade diplomat, will replace Pascal Lamy as the head of the WTO in September 2013)
  • In 2001, WTO started Doha Round of trade negotiations. (Doha is the capital and chief port of Qatar)
  • Doha negotiations are still unfinished due to differences among members on various issues.
  • Since multilateral trade negotiations (WTO) are stalled/pending, the regional trading agreements are on rise.

Trade agreements

What?Level of integration

PTA

  • Preferential trade agreements
  • lower customs duty on the products originating from the member countries.
shallow

FTA

  • Free Trade Agreements
  • It is a special case of PTA where all tariff and non-tariff barriers are abolished
  • free access is allowed to the products of member countries.
  • Example NAFTA (among Mexico, US and Canada).
Shallow

Customs Union

  • A Customs Union moves beyond a free trade area by establishing a common external tariff on all trade between, members and non-members.
  • Customs Unions typically contain mechanisms to redistribute tariff revenue among members
  • Example: Mercosur
Shallow

Common Market

  • free flow labour, capital, and output (goods/services) among the members.
  • Example, SICA (in Central America)
Deep

Economic union

  • members share a common currency and macro-economic policies (Example European Union).
  • Example, European Union.
deep

CEPA vs CECA

Both are examples of Free trade agreements.

CECA

CEPA

Comprehensive Economic Cooperation AgreementComprehensive Economic partnership Agreement
Reduce the tariffs (custom/import duties).Reduce tariffs + cooperation in trade in services, investment. = wider scope.
Countries sign CECA first and then gradually move towards CEPA like agreement.-
Example, India has CECA with

  1. Malaysia
  2. Singapore
  3. ASEAN (under negotiation)
Example, India has CEPA With

  1. Japan
  2. South Korea
  3. Sri Lanka (under negotiation)

India’s trade agreements

  • So far, India has signed 10 free trade agreements (FTAs) and 5 preferential trade agreements (PTAs) and these FTAs/PTAs are already in force.

FTA/PTA: Already concluded

10 FTA with

5 PTA with

  1. Sri lanka
  2. SAFTA (India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and Maldives)
  3. Nepal
  4. Bhutan
  5. Thailand, + early harvest Scheme (EHS)
  6. Singapore (CECA)
  7. ASEAN (CECA)
  8. S.Korea: CEPA
  9. Japan: CEPA
  10. Malaysia: CEPA
  1. Asia Pacific Trade Agrment (APTA): Bangladesh, China, India, S.Korea, Sri Lanka
  2. Global system of trade preferences (GSTP)
  3. Afghanistan
  4. MERCOSUR
  5. Chile
  • ^as per commerce chapter, India 2013 (Yearbook).
  • Further, India is currently negotiating 17 FTAs, including review/expansion of some of the existing ones.
  • Issue: Government needs to review the inverted duty structure under the India-Thailand FTA. Because finished jewelry imports from Thailand are cheaper than primary gold (raw material) available in India!

Trade agreements: Recent development

SAFTA

Signed and came into force.South Asia Free Trade AreaUnder SAFTA, India has granted zero basic custom duty to all LDCs, viz. Afghanistan, Bangladesh, Bhutan, and Maldives, on all items, except alcohol and tobacco products.

India Thailand FTA

Signed but negotiations still on.

India-ASEAN CECA

Signed, broader framework already in force. Minor details remain to be negotiated.

RECP among ASEAN+6

  • Regional Comprehensive Economic Partnership (RCEP) Agreement among ASEAN + 6 (Australia, China, India, Japan, Korea, and New Zealand).
  • During 20th ASEAN summit in Phnom Penh Cambodia (in 2012), the ASEAN states agreed to move towards this agreement.
  • It’ll provide economic partnership among ASEAN + its FTA partners. RCEP will cover trade in goods, services, IPR, dispute settlement etc.

India-EU

Broad based trade and investment agreement. Negotiations still going on.

GSTP

  • Global System of Trade Preferences among Developing Countries (GSTP)
  • It is a preferential trade agreement to increase trade between developing countries in the framework of the UNCTAD (United Nations Conference on Trade and Development).
  • India has unilaterally offered special concessions to Least developed countries under this agreement.
  • Cabinet approved implementing India’s schedule of concessions under GSPT.
  • India has also unilaterally offered special concessions to LDC

Japan

  • In Nov. 2012, India and Japan signed a pact to enable Japan to import rare earth minerals from India. (This will help reduce Japan’s reliance on China for rare earth minerals).
  • Rare earth minerals are important for high-tech electronics, mobile phones and hybrid cars, missile guidance systems etc.

Problem Areas: Export

  • Jawaharlal Nehru Port Trust (JNPT) Port at Mumbai, entry gates closing prematurely resulting in export consignments being dumped in the buffer yard at a very high cost and delay in shipments

Problem Areas: Ease of Doing business

  • Ease of doing business index is an index created by the World Bank.
  • India ranks 132. (Singapore 1st)
  • India requires 9 export documents to be cleared, while China needs 8, with good practice economies like France needing 2.
  • Time to export is 16 days for India and five for Denmark.
  • On an, average an Indian exporter is required to sign at about 130 places to complete an export transaction!
  • If we want to increase our exports, then Government must reduce these procedures and costs need to the barest minimum.

Measures to improve trade?

  • India’s foreign trade policy covers the period of 2009-14.
  • Under that, Commerce Ministry (and not finance ministry) releases Annual supplement to foreign trade policy every year.
  • 2012: Government has reduced the import duty on various capital goods/ machinery required for fertilizer, mining, infrastructure, horticulture projects etc.
  • Support for export of green technology products
  • Incentives for labour intensive industries, North East, agriculture etc.

Foreign Trade Policy annual supplement 2013

  • Released in April 2013, by Ministry of Commerce, Industry and Textiles
  • Although Government did not launch any new scheme in it
  • But the existing schemes were modified to provide for more relaxations and benefits to importers who are also exporters.

Salient Features FTP Annual Supplement 2013

  1. Reduced Minimum land area requirement for SEZ, by half
  2. No minimum land requirement for settingup IT SEZ
  3. Permitted sale and transfer of units inside SEZ.
  4. Zero Duty Export Promotion Capital Goods Scheme
  5. Government  will give 2% Interest Subvention Scheme for more sectors. (upto 31st March 2014)
  6. Duty Credit Scrips issued under Focus Market Scheme, Focus
  7. Product Scheme and Vishesh Krishi Gramin Udyog Yojana(VKGUY) can be used for payment of service tax.
  8. Import of cars/vehicles is permitted through designated ports only. Now import of cars/vehicles would also be allowed at Faridabad and Ennore Port (TN)
  9. System for online issuance of Registration Certificate for export of Cotton, Cotton Yarn, Non Basmati Rice, Wheat and Sugar.

E-BRC

  • The exporter will not be required to make any request to the bank for issuance of a bank export and realization certificate (BRC).
  • Thus their time and money will be saved.
  • For electronic transmission of foreign exchange realization from the respective banks to the Directorate General of Foreign Trade (DGFT) server on a daily basis.

ASIDE scheme

  • Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) Scheme
  • It provides assistance to State and union territories to create infrastructure for export Development.
  • Top 5 exporter states in India (also top-5 in terms of ASIDE allocation): Gujarat, Maharashtra, Tamil Nadu, Karnataka, and Andhra Pradesh. (Why? Think about the geographical, social, political, economic factors).

Towns of Export Excellence

These get more attention / funds under ASIDE scheme and other schemes of commerce ministry for boosting exports.

yearPlaceSector
2012
  1. A’bad
Textiles
  1. Kolhapur
  1. Shaharanpur
Handicraft
2013
  1. Morbi
Ceramic
  1. Gurgaon
Apparel

^this list in not exhaustive. I’ve only listed the new towns of export excellence under 2012 and 2013’s annual supplements to foreign trade policy. But if and when you’re preparing for UPSC interview, dig all the export excellence towns in your home state.

Interest Subvention

  • Earlier Government gave 2% interest subvention on handlooms, handicrafts, carpets, and SMEs
  • This scheme has been extended to labor-intensive sectors viz. toys, sports goods, processed agricultural products, and readymade garments.
  • Scheme is applicable upto 31 March 2014.

Special Economic Zones

  • Asia’s first Export processing zone (EPZ) was setup in Kandla, Gujarat, 1965
  • Special Economic Zones (SEZ) Act, enacted in 2005 and and Rules were notified in February 2006.
  • Government has given formal approvals to setup 579 SEZs, of which 384 have been notified.
  • As a whole, SEZs have provided employment to more than 9 lakh people.
  • 100 per cent FDI is allowed in SEZs through the automatic route
  • Problem area: land acquisition. (some of that is addressed under the 2013’s annual supplement to Foreign trade policy.)

VKGuy

  • Vishesh Krishi and Gram Udyog Yojana (VKGUY)
  • To promote the export of produce from agro, minor forest, gram udhyog etc.

RBI’s measures

  • RBI increased ceilings for External Commercial Borrowings (ECBs)
  • RBI allowed the banks to determine their interest rates on loans to exporters (in foreign currency).

Anti-Dumping

  • Directorate General of Anti-dumping and Allied Duties (DGAD) has initiated 10 fresh cases. Against China PR, the European Union, South Korea, Malaysia, Mexico, Taiwan, Thailand, Turkey, Saudi Arabia, and the USA.
  • DGAD falls under Commerce Ministry.

Chindu’s budget speech (2013): Foreign Trade

CAD worrysome

  • India is part of the global economy: our exports and imports amount to 43 percent of GDP
  • But My greater worry is the current account deficit (CAD).
  • The CAD continues to be high mainly because of
    1. our excessive dependence on oil imports,
    2. the high volume of coal imports,
    3. our passion for gold
    4. slow down in exports.
  • This year, and perhaps next year too, we have to find over USD 75 billion to finance the CAD.
  • (To finance Current Account deficit) , there are only three ways before us:
    1. FDI
    2. FII
    3. External Commercial Borrowing (ECB).
  • That is why I have been at pains to state over and over again that India, at the present juncture, does not have the choice between welcoming and spurning foreign investment.
  • If I may be frank, foreign investment is an imperative.
  • What we can do is to encourage foreign investment that is consistent with our economic objectives.

To boost trade

  • Peak rate of basic customs duty = 10% (for non agro products)
  • Normal excise duty = 12%
  • Normal service tax= 12%
What?Duty Increase/decrease?Chindu said
Import Machinery for leather factoryDecrease
  • Leather and leather goods is a thrust sector for exports. I propose to reduce the duty on specified machinery for manufacture of leather and leather goods and footwear.

Taxation: Export

Precious stones exportingDecrease
  • To encourage exports, I propose to reduce the duty on pre-forms of precious and semi-precious stones from 10 percent to 2 per cent.
oil cakeEliminated
  • Export duty on de-oiled rice bran oil cake has made our exports uncompetitive. Hence, I propose to withdraw the said duty.
IlmeniteIncreased
  • Prices of unprocessed ilmenite have gone up several fold in the export market.
  • Considering the need to conserve our natural resources, I propose to impose a duty of 10 percent on export of unprocessed ilmenite.
  • Side note:
  • Ilmenite is the primary ore of titanium. Found in TN, Odisha, Kerala.
  • Titanium dioxide is used in paint and coating industry.
  • Titanium is used in aircraft, tank, weapons, artificial joints, sporting equipment and high performance alloys.
CoalStreamlined
  • At present both Steam coal and Bituminous coal are used in thermal power stations, but attract different rates of customs duty and counter veiling duty.
  • I propose to equalize the duties on both kinds of coal and levy 2 per cent customs duty and 2 per cent CVD.
Luxury vehicleIncreased
  • There is an affluent class in India that consumes imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels. I am sure they will not mind paying a little more. Hence, I propose to increase the duty on such vehicles.

Coal dependence

  • Despite abundant coal reserves, we continue to import large volumes of coal.
  • If the coal requirements of the existing and future power plants are taken into account, there is no alternative except to import coal and adopt a policy of blending and pooled pricing.
  • In the medium to long term, we must reduce our dependence on imported coal.
  • One of the ways forward is to devise a PPP policy framework to increase the production of coal. Coal ministry will announce the policies in this regard.

IT

  • The Rangachary Committee was appointed to look into tax matters relating to Development Centres & IT sector and Safe Harbour rules for a number of sectors.
  • By the way, Rangachary was also a member of Shome Panel (for GAAR).

What is countervailing duty (CVD)?

Suppose we imported xyz thing from USA. And that xyz thing is also manufactured by Indian producers as well.

  • But the American Government provides some subsidies to their exporters, hence the price of imported XYZ item is more than the locally produced “desi” variety. And or
  • The Indian producers are required to pay more taxes hence desi variety has become more expensive than the American product.
  • In such case, Indian Government can imposes addition tax on the imported item to protect the domestic industry. This is known as countervailing duty (CVD).

In 2013, US Department of Commerce started investigation a countervailing duty (CVD) investigation against India and six other countries on export of shrimp. Because the (domestic) American shrimp industry had complained that Indian Government provides lot of incentives, subsidies and tax reliefs to Indian shrimp exporters, so US Government should impose a CVD on the shrimps imported from India.

Conclusion

Gold and CAD

  • In the earlier article on Gold ETF, we saw the measures taken by govt. to reduce the gold import(click me) While the supply of gold through organized channels can be constricted, there is need to be vigilant regarding gold inflows through unauthorized channels (= Smuggling).
  • Ultimately, the best way to reduce gold imports in a sustainable way will be to offer the public financial investment opportunities that generate attractive returns.
  • This means bringing down inflation as well as expanding the range of investments investors have easy access to. (e.g. Rajiv Gandhi Equity  savings scheme RGESS).

Trade Agreement

  • India always stood for open, unbiased, international trading system, but since WTO negotiations are not moving in positive direction, we need to focus on Regional Trade agreements (RTAs). Particularly for exporting our technology-intensive items.
  • There is also need to address the inverted duty structure in sectors like electronics, textiles, and chemicals and the artificial inverted duty structure caused by some FTAs/RTAs.

Important Summits

2012

2013

SAARC

Addu, Maldives (2011)Kathmandu

ASEAN

Phnom Penh, CambodiaBrunei

BRICS

DelhiDurban, S.Africa

G20

  • Los Cabos, Mexico
  • St. Petersburg, Russia
Brisbane, Australia

Trade Blocs/ Regional Groups

List is not exhaustive.

APECAsia-Pacific Economic Cooperation
  1. Australia
  2. Brunei
  3. Canada
  4. Chile
  5. China
  6. HongKong
  7. Indonesia
  8. Japan
  9. SouthKorea
  10. Malaysia
  11. Mexico
  12. New Zealand
  13. Papua NewGuinea
  14. Peru
  15. Philippines
  16. Russia
  17. Singapore
  18. Taiwan
  19. Thailand
  20. United States
  21. Vietnam
APTAAsia Pacific Trade agreement
  1. Bangladesh
  2. China
  3. India
  4. S.Korea
  5. Sri Lanka
ASEANAssociation of South East Asian Nation
  1. Brunei
  2. Cambodia
  3. Indonesia
  4. Laos
  5. Malaysia
  6. Burma (Myanmar)
  7. Philippines
  8. Singapore
  9. Thailand
  10. Vietnam
BIMSTEC
  • Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.
  • Bangladesh, India, Myanmar, Sri Lanka, and Thailand Economic Cooperation
  1. Bangladesh
  2. Bhutan
  3. Myanmar
  4. India
  5. Nepal
  6. SriLanka
  7. Thailand
BRICSBrazil, Russia, India, China and South Africa
  1. Brazil
  2. Russia
  3. India
  4. China
  5. South Africa
CELACCommunity of Latin American and Caribbean States33 countries in that region. Names not worth the space hahaha.
CISCommonwealth of Independent States
  1. Armenia
  2. Azerbaijan
  3. Belarus
  4. Kazakhstan
  5. Kyrgyzstan
  6. Moldova
  7. Russia
  8. Tajikistan
  9. Uzbekistan
COMESACommon Market for Eastern and Southern Africa20 member states stretching from Libya to Zimbabwe.
ECOWASEconomic Community of Western African States15 members in Western Africa.
EFTAEuropean Free Trade association
  1. Iceland
  2. Liechtenstein
  3. Norway
  4. Switzerland
EUEuropean Union
  1. Austria
  2. Belgium
  3. Bulgaria
  4. Cyprus
  5. Czech Republic
  6. Denmark
  7. Estonia
  8. Finland
  9. France
  10. Germany
  11. Greece
  12. Hungary
  13. Ireland
  14. Italy
  15. Latvia
  16. Lithuania
  17. Luxembourg
  18. Malta
  19. Netherlands
  20. Poland
  21. Portugal
  22. Romania
  23. Slovakia
  24. Slovenia
  25. Spain
  26. Sweden
  27. UK
G20Group of 20
  1. Argentina
  2. Australia
  3. Brazil
  4. Canada
  5. China
  6. European Union
  7. France
  8. Germany
  9. India
  10. Indonesia
  11. Italy
  12. Japan
  13. Mexico
  14. Russia
  15. SaudiArabia
  16. SouthAfrica
  17. SouthKorea
  18. Turkey
  19. UnitedKingdom
  20. UnitedStates
G8Group of 8 (Wealthiest nations)
  1. Canada
  2. France
  3. Germany
  4. Italy
  5. Japan
  6. Russia
  7. UK
  8. US
GCCGulf cooperation council
  1. Bahrain
  2. Kuwait
  3. Qatar
  4. Saudi Arabia
  5. Oman
  6. United Arab Emirates (UAE)
GSTPGlobal system of trade preferences44 developing countries. List is not worth the table space hahaha.
IBSAIndia Brazil South Africa
  1. India
  2. Brazil
  3. South Africa
IORARC/Ocean RimIndian Ocean Rim association of regional cooperation.
  1. Australia
  2. Bangladesh
  3. Comoros
  4. India
  5. Indonesia
  6. Iran
  7. Kenya
  8. Madagascar
  9. Malaysia
  10. Mauritius
  11. Mozambique
  12. Oman
  13. Seychelles
  14. Singapore
  15. S.Africa
  16. Sri Lanka
  17. Tanzania
  18. Thailand
  19. UAE
  20. Yemen
MERCOSURSouthern Common Market. (Mercado Comun Del sur)
  1. Argentina
  2. Brazil
  3. Paraguay
  4. Uruguay
  5. Venezuela (member since 2012)
NAFTANorth American Free Trade Agreement
  1. Canada
  2. US
  3. Mexico
SAARCSouth Asian Association for Regional Cooperation
  1. Afghanistan
  2. Bangladesh
  3. Bhutan
  4. India
  5. Maldives
  6. Nepal
  7. Pakistan
  8. Sri Lanka
SACUSouthern African Customs Union
  1. South Africa
  2. Botswana
  3. Lesotho
  4. Swaziland
  5. Namibia
SAFTASouth Asia Free Trade Agreement
  1. India
  2. Paki
  3. Nepal
  4. Lanka
  5. Bangladesh
  6. Bhutan
  7. Maldives
  8. Afghanistan (latest member)
SCOShanghai Cooperation Organisation
  1. China,
  2. Kazakhstan,
  3. Kyrgyzstan,
  4. Russia,
  5. Tajikistan,
  6. Uzbekistan.

IMF: Advanced Economies in ASIA

  1. S.Korea
  2. Hong Kong
  3. Singapore
  4. Taiwan

Mock Question

  1. Baltic dry index measures
    1. change in crude oil prices
    2. change in dollar’s value against major currencies.
    3. Performance of share markets in Baltic nations
    4. None of Above
  2. Increase in Baltic Dry index means
    1. World economy is moving in negative direction
    2. World economy is moving in positive direction
    3. World economy is moving towards a stalemate
    4. None of above
  3. Which of the following is not among the top 3 trading partners of India?
    1. US
    2. UAE
    3. China
    4. Japan
  4. India doesn’t have trade surplus with
    1. Singapore
    2. Hong Kong
    3. Switzerland
    4. All of above
  5. India doesn’t have PTA agreement with
    1. Chile
    2. Mercosur
    3. Afghanistan
    4. Sri Lanka
  6. India doesn’t have FTA agreement with
    1. Thailand
    2. Japan
    3. Malaysia
    4. Afghanistan
  7. With Japan, India has ______ agreement
    1. CEPA
    2. CECA
    3. PTA
    4. No trade
  8. GSTP aims to increase trade between _____ countries under ______.
    1. Developed, UN
    2. Developing, UNCTAD
    3. All, WTO
    4. member, ASEAN
  9. India has high current account deficit mainly because of
    1. coal import
    2. crude oil import
    3. slow down in export
    4. All of above
  10. Current Account Deficit can be financed through
    1. Only FDI, FII
    2. Only FDI and ECB
    3. Only ECB and FII
    4. FDI, FII and ECB
  11. Ilmenite is the primary ore of
    1. Copper
    2. Aluminum
    3. Titanium
    4. Magnesium
  12. Which of the follow coal is used in Thermal power stations?
    1. steam coal
    2. Bituminous coal
    3. both
    4. none
  13. Rangachary Committee is associated with taxation of ____ sector.
    1. IT
    2. Fisheries
    3. Coal
    4. gems and jewelry
  14. Addu declaration is associated with
    1. UNESCO
    2. G20
    3. SAARC
    4. G8
  15. For 2013, SAARC summit will be held in
    1. Kathmandu
    2. Delhi
    3. Lahore
    4. Thimpu
  16. Durban summit, 2013, is associated with
    1. BRICS
    2. G20
    3. G8
    4. UNESCO
  17. In 2012, G20 summit was held in
    1. Los Angeles
    2. Phnom Penh
    3. Los Cabos
    4. None of above
  18. Phnom Penh hosted the _____ summit in 2012.
    1. ASEAN
    2. BRICS
    3. G20
    4. G8
  19. Correct order in terms of membership (smaller to bigger)
    1. ASEAN, BIMSTEC, G20
    2. BIMSTEC, ASEAN, G20
    3. BIMSTEC, G20, ASEAN
    4. None of above
  20. Switzerland is a member of
    1. EU
    2. EFTA
    3. Both
    4. None
  21. Which of the following is associated with African Continent?
    1. COMESA,
    2. ECOWAS
    3. SACU
    4. All of above
  22. Who among the following, is a member of GCC?
    1. Syria
    2. Iraq
    3. Bahrain
    4. Iran
  23. G8 doesn’t have member from which continent?
    1. Europe
    2. Australia
    3. Asia
    4. North America
  24. MERCOSUR membership doesn’t include
    1. Brazil
    2. Paraguay
    3. Uruguay
    4. Venezuela
  25. NAFTA includes
    1. only US, Canada
    2. only US, Mexico
    3. Only Canada, Mexico
    4. US, Canada and Mexico
  26. SAARC has ___ members
    1. 5
    2. 6
    3. 7
    4. 8
  27. SAFTA doesn’t include
    1. China, Pakistan and Afghanistan
    2. China and Myanmar
    3. Nepal and Myanmar
    4. Myanmar and Maldives
  28. As per IMF classification, which of the following is not an Advanced economy
    1. Taiwan
    2. Singapore
    3. South Korea
    4. China
  29. ___, ____ and ____ are the chiefs of World Bank, IMF and WTO respectively
    1. Christine lagarde, Pascal Lamy, Jim Yong Kim
    2. Pascal Lamy, Christine lagarde, Jim Yong Kim
    3. Jim Yong Kim, Christine lagarde, Pascal Lamy
    4. Christine lagarde, Jim Yong Kim, Pascal Lamy
  30. To reduce its dependence on China, Japan recently inked a pact with India to import ____.
    1. Rice
    2. Eggs and unprocessed meat
    3. Iron ore
    4. Rare earth minerals
  31. The annual supplements to Foreign Trade policy are released by
    1. Finance ministry
    2. Commerce Ministry
    3. External Affairs ministry
    4. PMO
  32. Which of the following is a town of export excellence for Apparel
    1. Ahmedabad
    2. Kolhapur
    3. Gurgaon
    4. Shaharanpur
  33. In 2013, Morbi was declared a town of export excellence for its ____ sector
    1. Electronics
    2. Leatherwork
    3. Ceramic
    4. Handicraft
  34. In 2013, Gurgaon was declared a town of export excellence for its ___ sector
    1. Automobile
    2. IT
    3. Apparel
    4. Service
  35. Government provides interest subvention to
    1. Farmers
    2. Handloom, handicraft exporters
    3. both
    4. none
  36. Who benefits from E-BRC scheme?
    1. Indian Exporters
    2. Indian IT companies
    3. Indian Embassies in Brazil, Russia and China
    4. All of Above
  37. ASIDE Scheme is meant to
    1. Provide assistance to physically challenged
    2. improve infrastructure for Export development
    3. provide loans to farmers
    4. provide assistance to HIV positive people.
  38. Matters related to dumping falls under the purview of
    1. Commerce Ministry
    2. Finance Ministry
    3. External Affairs Ministry
    4. Home ministry
  39. Countervailing Duty: correct statements
    1. It is an example of Indirect Tax
    2. It is imposed on imported goods in certain circumstances.
    3. Both
    4. None
  40. What is the purpose of countervailing duty?
    1. Protect domestic industry against foreign industry
    2. Protect exporters against domestic industry in the foreign country
    3. Protect exporters against currency exchange rate fluctuations
    4. None of above
  41. “Ease of Doing business” data is released by
    1. OECD
    2. WTO
    3. World Bank
    4. IMF
[Economic Survey Ch7] International Trade, FTA, PTA, ASIDE, E-BRC, CEPA vs CECA Difference Explained




So far 161 Comments posted

    1. nishat

      EURO is basically adopted by countries under Eurozone.
      Eurozone is 17 member economic and monetary union ( having same currency) whereas UK comes under European Union which is different from Eurozone .
      Unlike Eurozone, EU is economic and political union( not necessarily same currency. Same currency applies in case of monetary union).
      EU consist of 27 members and UK is a part of EU & not Eurozone.

  1. shaif tazir

    Hey Mrunal .. Can you please see above export / import of india .. i think they are interchanged

  2. Nik

    In counting FTA countries some countries are repeated like sri lanka, Bhutan, Nepal individually and in SAFTA. what’s the difference, why count twice?

  3. Omprakash

    CH-7 Answer Keys
    1. D None
    2. B Positive direction
    3. D Japan
    4. C Switzerland
    5. D Sri Lanka
    6. C Afghanistan
    7. A CEPA
    8. B Developing, UNCTAD
    9. D All
    10. D FDI, FII And ECB
    11. C Titanium
    12. C Both Steam Coal and Bituminous Coal
    13. A IT
    14. C SAARC
    15. A Kathmandu
    16. A BRICS
    17. C Los Cabos
    18. A ASEAN
    19. D None- Correct one is G20(20), ASEAN(10), BIMSTEC(7)
    20. B EFTA
    21. D All
    22. C Bahrain
    23. B Australia
    24. Question is old perhaps; as all are Members (Total 5 members- Argentina, Brazil, Paraguay, Uruguay, Venezuela(2012))
    25. D US, CANADA and MEXICO
    26. D 8
    27. B China and Myanmar
    28. D China
    29. C Jim Yom Kim, Christine Lagarde and Pascal Lamy
    30. D Rare earth Minerals
    31. B Commerce Ministry
    32. C Gurgaon
    33. C Ceramic
    34. C Apparel
    35. B Handloom, Handicraft exporter
    36. A Indian Exporters
    37. B Improve Infrastructure for export development
    38. A Commerce Ministry
    39. C Both
    40. A Protect Domestic Industry against Foreign Industry
    41. C World Bank

    1. kris

      36.Who benefits from E-BRC scheme?
      a.Indian Exporters
      b.Indian IT companies
      c.Indian Embassies in Brazil, Russia and China
      d.All of Above
      Answer:for this you directly know that option (a) is applicable
      I thnk (b) also applicale and i think (c) is not applicable
      so,in that way there is choice for this question

      Sir,will plz clarify my doubt

  4. kris

    @mrunal sir,
    could you plz give me the answer for 24th question?
    because all countries in the objectives are members in mercosur.

  5. kris

    SAFTA doesn’t include

    a. China, Pakistan and Afghanistan
    b.China and Myanmar
    c.Nepal and Myanmar
    d. Myanmar and Maldives
    What is the answer for this question?
    i think this question does not have the answers in choices

      1. kris

        thanks for ur reply…
        in option (a)=china
        in opton (c)=Myanmar
        in option (d)=myanmar
        these countries are not in SAFTA
        so why not we consider a,c,d as answers?
        why we take only b as answer?

  6. kris

    Q35.Government provides interest subvention to
    a.Farmers
    b.Handloom, handicraft exporters
    c.both
    d.none
    Sir for this question answer is (b)
    Because no where you mentioned farmer but you said that ths extended to processed agricultural products…….i think it does mean farmer.
    36.Who benefits from E-BRC scheme?
    a.Indian Exporters
    b.Indian IT companies
    c.Indian Embassies in Brazil, Russia and China
    d.All of Above
    Answer:for this you directly know that option (a) is applicable
    I thnk (b) also applicale and i think (c) is not applicable
    so,in that way there is choice for this question

    Sir,will plz clarify my doubt

    1. Prabodh

      35. The answer is c, coz though not mentioned in this chapter but in the notes to Chapter 6, Interest subvention scheme of 4% is mentioned for agricultural loans. Hence answer is C.

      36. E-BRC means for export. Though IT companies do export. We should not think that all companies have to export, there are many IT firms with Indian clients only. Moreover, if there is an IT export, it will also be covered in option A, ie Indian Exporters. Hence only A would be the answer

  7. venkatesh g

    Can both FTA & PTA exist for a same country? Above Sri Lanka, Bangladesh, South Korea exits in both FTA and PTA signed countries. Can you clarify?

  8. Pradeep Mady

    Sir can please explain how WTO, food security of the world, Subsidies and Food security Act of India are linked. Am confused,Please help.Thankyou.

  9. saptarshi

    “But the American Government provides some subsidies to their exporters, hence the price of imported XYZ item is more than the locally produced “desi” variety.”
    I think in the above line it should be “Less than the locally produced desi variety”
    This is in the head of “What is countervailing duty (CVD)?”

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