Here are 25 Multiple choice questions (MCQs) on Free Trade Agreements (FTAs) with a focus on India's perspective, covering general knowledge, benefits, challenges, and policy considerations: -

1. What does FTA stand for?

A. Foreign Trade Agreement
B. Free Trade Agreement
C. Fiscal Trade Arrangement
D. Federation of Trade Associations
 

2. The main purpose of an FTA is to:

A. Impose tariffs
B. Reduce or eliminate trade barriers
C. Establish political alliances
D. Set military terms
 

3. India opted out of which major regional trade agreement in 2019?

A. ASEAN FTA
B. SAFTA
C. RCEP
D. NAFTA
 

4. Which of the following countries does India have a Comprehensive Economic Partnership Agreement (CEPA) with?

A. China
B. Japan
C. Brazil
D. Germany
 

5. FTAs generally cover which of the following areas?

A. Trade in goods
B. Trade in services
C. Investment and intellectual property
D. All of the above
 

6. India’s FTA with ASEAN came into effect in:

A. 2005
B. 2009
C. 2011
D. 2014
 

7. One of the key advantages of FTAs is:

A. Increased trade barriers
B. Reduced market access
C. Preferential access to foreign markets
D. Import substitution
 

8. Which of the following is a bilateral FTA?

A. RCEP
B. EU-India Trade Agreement
C. India-UAE CEPA
D. ASEAN FTA
 

9. A major concern for India in many FTAs has been:

A. Over-exporting
B. Rising trade deficits
C. Too many subsidies
D. Excess employment
 

10. FTAs are negotiated and signed by which Indian body?

A. Reserve Bank of India
B. Ministry of External Affairs
C. Directorate General of Foreign Trade
D. Ministry of Commerce and Industry
 

11. Which Indian sector benefits most from FTAs with service provisions?

A. Agriculture
B. IT and software services
C. Automobiles
D. Steel
 

12. The trade agreement between India and Australia signed in 2022 is called:

A. Indo-Australia FTA
B. India-Australia CEPA
C. India-Australia ECTA
D. Indo-Pacific Partnership Agreement
 

13. Which FTA partner has India had the largest trade deficit with?

A. Japan
B. ASEAN
C. UAE
D. Canada
 

14. One criticism of India’s early FTAs is:

A. Too many defense clauses
B. No implementation plan
C. Underutilization by Indian exporters
D. Delays in ratification
 

15. India’s withdrawal from RCEP was largely driven by concerns over imports from:

A. Vietnam
B. China
C. South Korea
D. Thailand
 

16. Which of these is a benefit of FTAs for consumers?

A. Higher prices
B. More import duties
C. Greater product variety at competitive prices
D. Limited market access
 

17. Which of the following is NOT an FTA signed by India?

A. India–UAE CEPA
B. India–Mauritius CECPA
C. India–USA FTA
D. India–Japan CEPA
 

18. What is a key tool used to determine eligibility for preferential tariffs in an FTA?

A. Import license
B. Tax audit
C. Rules of Origin
D. Export duty certificate
 

19. The term “FTA utilization rate” refers to:

A. Number of countries in the FTA
B. Share of exports that use FTA benefits
C. Domestic inflation rate
D. Labor participation rate
 

20. One challenge in negotiating FTAs is:

A. Standard time zones
B. Language differences
C. Reconciling domestic sensitivities and global obligations
D. Weather forecasts
 

21. The India–UK FTA, under negotiation, is expected to improve trade in:

A. Textiles
B. Legal and financial services
C. Whiskey and automobiles
D. All of the above
 

22. FTAs can be a stepping stone to:

A. Protectionist trade
B. Multilateral trade integration
C. Fixed exchange rates
D. Gold standard return
 

23. India’s CECPA with Mauritius was the first of its kind with an:

A. Asian country
B. Island nation in Africa
C. EU member state
D. OECD country
 

24. What does “negative list” mean in the context of FTAs?

A. Banned countries
B. Products that are excluded from tariff concessions
C. Tax-free imports
D. List of non-compliant exporters
 

25. One strategic benefit of FTAs for India is:

A. Strengthening geopolitical and economic alliances
B. Limiting exports
C. Avoiding WTO obligations
D. Reducing local manufacturing

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