Practice Questions on External Sector for UPSC, APPSC, TGPSC and other state PSC exams

1. India-US trade deal and India-EU FTA are significant for:

2. Union Budget 2025-26 proposed to increase FDI limit in insurance sector to:

3. External Commercial Borrowings (ECBs) refer to:

4. Which state received the highest FDI equity inflow in India?

5. FEMA (Foreign Exchange Management Act) was enacted in:

6. India’s merchandise trade deficit in FY 2024-25 was approximately:

7. The Balance of Trade (BoT) refers to:

8. The 1991 Balance of Payments crisis in India was caused by:

9. The sector attracting highest FDI equity inflow in India is:

10. India’s share in global merchandise exports is:

11. The highest ever monthly trade deficit in India was recorded in:

12. The key difference between FDI and FPI is:

13. The Tarapore Committee was related to:

14. Import cover of foreign exchange reserves measures:

15. The Marshall-Lerner Condition states that:

16. The term ‘Twin Deficit’ refers to:

17. Foreign Portfolio Investment (FPI) is characterized by:

18. The concept of ‘Hot Money’ refers to:

19. India remained the world’s largest recipient of remittances with inflows of:

20. The top source country for FDI in India (cumulative) is:

21. Current Account Deficit (CAD) occurs when:

22. The J-Curve effect in international trade suggests that:

23. Secondary Income (Transfers) in Balance of Payments includes:

24. India’s Current Account Deficit in H1 FY 2025-26 was:

25. India’s External Debt as of September 2025 stood at:

26. Balance of Payments (BoP) is defined as:

27. India’s Foreign Exchange Reserves as of January 2026 stood at:

28. India’s External Debt to GDP ratio of 19.2% indicates:

29. FDI in India can come through which routes?

30. The Capital and Financial Account of BoP includes:

31. India’s services exports are significant because:

32. The Current Account of Balance of Payments includes:

33. Under FEMA, Current Account transactions are:

34. The Balance of Payments always balances because:

35. The components of Foreign Exchange Reserves are:

36. Foreign Exchange Reserves are held and managed by:

37. The Liberalized Remittance Scheme (LRS) allows:

38. Foreign Direct Investment (FDI) is defined as:

39. Terms of Trade (ToT) refer to:

40. India’s cumulative FDI inflows from April 2000 to December 2025 crossed:

41. India’s major export items include:

42. India’s major import items include:

43. Special Drawing Rights (SDRs) are:

44. Net International Investment Position (NIIP) measures:

45. FDI policy in India is formulated by:

46. Invisibles in Balance of Payments refer to:

47. Capital Account Convertibility means:

48. Primary Income in Balance of Payments includes:

49. The Real Effective Exchange Rate (REER) measures:

50. A Balance of Payments crisis occurs when: