Banking Awareness Study Material – Industry, Trade And International Organisation

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Industry

Industry refers to an economic activity concerned with the processing of raw materials and manufacturing of goods in factories. Industries are often classified based on their principal product e.g. steel industry, automobile industry, textile industry, etc. The products of industries can be consumer goods (goods, which are finally consumed by consumers) like textiles, cosmetics etc., or producer goods (goods used by manufacturers for producing some other goods) like machinery, tools, equipment, etc.

Industrial Development: The concept of ‘Industrial Policy’ is comprehensive and it covers all those procedures, principles, policies rules and regulations which control the Industrial undertakings of a country and shape pattern of industrialisation. It incorporates fiscal and monetary policies, the tariff policy, Labour policy and government’s attitude not only towards external assistance, but towards the public and private sectors also.

When India achieved independence in 1947, the national consensus was in favour of rapid industrialisation of the economy, which was seen not only as the key to economic development, but also as economic sovereignty.

Industrial Policy: An industrial policy provides guidelines for the effective coordination of the activities of various sectors of the economy. It is an official strategic effort of a country to encourage the development and growth of part or all of the manufacturing and sector as well as other sectors of the economy. In the subsequent years, India’s Industrial Policy evolved through successive Industrial Policy Resolutions and Industrial Policy Statements. Specialised priorities for industrial development were also laid down in the successive five year plans.

New Industrial Policy, 1991

The Government of India announced the New Industrial Policy on 24th July, 1991. The main objective of this policy is to unshackle the Indian industrial economy from administrative and legal controls. Its main aim is to raise industrial efficiency to the international level through substantial deregulation of the industrial sector of the country controls. Its main aim is to raise industrial efficiency to the international level through substantial deregulation of the industrial sector of the country.

Industries Requiring Compulsory Licensing (Presently)

• Distillation and brewing of alcoholic drinks.
• Cigars and cigarettes of tobacco and manufactured tobacco substitutes.
• Electronic aerospace and defence equipment of all types.
• Industrial explosives including match boxes.
• Specific hazardous chemicals viz,
• Hydrocyanic acid
• Phosgene
• Isocyanates and diisocyanates of hydrocarbon

Index of Industrial Production (IIP)

IIP is an index for measuring the level of industrial activity in the country. The all India IIP is a composite indicator that measures the short term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period. It is complied and published monthly by the Central Statistics Office (CSO), with the time lag of six weeks from the reference month.

The Index of Industrial Production (IIP), with 2004-05 (Now, 2011-12) as base is the leading indicator for industrial performance in the country. Compiled on a monthly basis, the current IIP series based on 399 products/product groups is aggregated into three broad groups of mining, manufacturing and electricity. The IIP as an index shows both the level of production and growth.

Achievements of Industrial Sector

Folio-wing are the achievements of recent years

• Patent Design: It is a form of legal protection granted to the ornamental design of a functional item. Design patents are a type of industrially right design.
• Indian Trademark Law: It statutorily protects trademarks as per the Trademark Act, 1999 and also under the common law remedy of passing off. Trademark law 2010, was accepted by the Parliament and was converted into a law.
• IPR Awareness Program: Recognising the importance of intellectual property, the Hon’ble President of India declared the decade of 2011-2020 as the Decade of Innovation. The future prosperity of India in the new knowledge economy would increasingly depend on its ability to generate new ideas, processes and solutions and the process of innovation would convert knowledge into social good and economic wealth.
• National Design Policy: This policy was announced on February, 2007. Realising the increasing importance of design in economic, industrial and societal development and in improving the quality of products and services, the Government of India had initiated a consultative process with industry, designers and other stakeholders to develop the broad contours of a National Design Policy.

The Maharatnas

Maharatna Scheme was introduced for Central Public Sector Enterprises (CPSEs), with effect from 19th May, 2010, in order to empower mega CPSEs to expand their operations and emerge as global giants.

The objective of the scheme is to delegate enhanced powers to the boards of identified large-sized Navratna CPSEs, so as to facilitate expansion of their operations, both in domestic as well as global markets.

CPSEs fulfilling the following criteria are eligible to be considered for grant of Maharatna status

• Having Navratna status,
• Listed on the Indian stock exchange, with a minimum prescribed public shareholding under SEBI regulations, An average annual turnover of ₹ 20000 crore for 3 yr.
• An average annual turnover of more than ₹ 2500 crore during the last 3 yr,
• An average annual Net Worth of more than ₹ 15000 crore during the last 3 yr,
• An average annual Net Profit after tax of more than ₹ 5000 crore during the last 3 yr,
• Significant global presence or international operations.

The coveted status empowers the hoards of these firms to take investment decisions up to ₹ 5000 crore as against the present ₹ 1000 crore limit for Navratnas without seeking government approval. The Maharatna firms would now be free to decide oil investments up to 15% of their Net Worth in a project, limited to an absolute ceiling of ₹ 5000 crore.

CPSEs Maharatna

• Bharat Heavy Electricals Limited (BHEL)
• Coal India Limited (CIL)
• Gas Authority of India Limited (GAIL)
• Indian Oil Corporation Limited (IOCL) NTPC Limited
• Oil and Natural Gas Corporation Limited (ONGC)
• Steel Authority of India Limited (SAIL)

The Navratnas

Navratna was the title given originally to nine Public Sector Enterprises (PSEs), identified by the Government of India in 1997, as its most prestigious, which allowed them greater autonomy to compete in the global market. Navratna status empowers the PSUs to invest up to ₹1000 crore or 15% of their net worth on a single project without seeking government approval. The overall ceiling on such investments in all projects put together is 30%, of the net worth of the company.

CPSEs Navratna

• Bharat Electronics Limited (BEL)
• Bharat Petroleum Corporation Limited (BPCL)
• Hindustan Aeronautics Limited (HAL)
• Hindustan Petroleum Corporation Limited (HPCL)
• Mahanagar Telephone Nigam Limited (MTNL)
• National Aluminium Company Limited (NACL)
• NMDC Limited
• Oil India Limited (OIL)
• Power Finance Corporation Limited (PFCL)
• Power Grid Corporation of India Limited (PGCIL)
• Rashtriya Ispat Nigam Limited (RINL)
• Rural Electrification Corporation Limited (RECL)
• Shipping Corporation of India Limited (SCIL)
• Nevyeli Lignite Corporation Limited (NLCL)
• Engineers India Limited (EIL)
• National Buildings Construction Corporation Ltd. (NBCCL)
• Container Corporation of India Ltd (CONCOR)

The Miniratnas

The government has also accorded the status of Miniratna to some profit making PSEs.

There are two categories of Miniratnas

• Category I These are companies, which have made a profit in each of last three years and earned a profit of ₹ 30 crore in atleast one of the three years. They are allowed to incur capital expenditure without government approval upto ₹ 500 crore or equal to their net worth whichever is lower. There are 58 Miniratnas of this category at present (February, 2016).
• Category II These are companies, which have made profits for the last three years continuously and have a positive Net Worth. They can incur capital expenditure upto ₹300 crore or 50% of their Net Worth whichever is lower. There are presently (February, 2016) 15 such category II Miniratnas.

Foreign Trade and Balance of Payment

Meaning of Foreign Trade

The Exchange of goods and services between the two countries is termed as foreign trade. The purpose of foreign trade lies in meeting the domestic demands for goods and services.

There are two components of foreign trade

• Exports When goods and services are sold to the foreign country for the motive of earning more profit, it is called exports.
• Imports When goods and services are purchased from a foreign country to meet the domestic needs it is known as imports.

Foreign Trade Policy

It is a set of guidelines and instructions established by the Director General of Foreign Trade (DGFT) in matter related to the import and export of goods in India.

New Foreign Trade Policy, 2015-20

The Foreign Trade Policy, 2015-20 was finally announced by the Hon’ble Minister of Commerce and Industry, Smt Nirmala Sitharaman on 1st April, 2015. The FTP has been announced in the backdrop of several measures initiated by the Government of India and such as ‘Make in India’, ‘Digital India’ and ‘Skills India’, among others.

The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

Features of the New Foreign Trade Policy (2015-20)

Features of the Foreign Trade Policy are as follows

• India to be made a significant participant in world trade by 2020.
• Merchandise Exports from India Scheme (MEIS) to promote specific services for specific markets.
• FTP would reduce export obligations by 25% and would give boost to domestic manufacturing. FTP benefits from both MEIS and Service Exports from India Scheme (SEIS), and will be extended to units located in SEZs.
• Industrial products to be supported in major markets at rates ranging from 2% to 3.5%.
• Branding campaigns planned to promote exports in sectors where India has traditional strength.

New Scheme In FTP, 2015-20

FTP 2015-20 introduces two new schemes namely Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SETS).

• Merchandise Exports from India Scheme (MEIS) Now, 5 different earlier schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri Infrastructure Incentive Scheme and VKGUY) have been merged into a single scheme, namely Merchandise Export from India Scheme (MEIS). Incentives under this scheme are available on exports of notified goods to notified markets at notified rates.
• Service Exports from India Scheme (SEIS) Served from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS).Now, all service providers located in India and earning foreign exchange, regardless of the Constitution or profile of the service provider, who is exporting notified services, would be eligible for the benefits at the rate of 3% or 5% of net foreign exchange earnings.

The reward issued as Duty Credit Scrip under this scheme and goods imported by using this scrip will be freely transferable and usable for all types of goods/services for payment of custom duty, excise duty and service tax. Incentives (MEIS and SEIS) now are available to units located in SEZs also.

Position of India’s Foreign Trade

India’s participation in foreign trade had been continuously declining till 1980. Since 2001, it has continually improved. Share of India in foreign trade was 0.80% in 2001. A WTO report of 2016, the IMF has admitted that the share of India in foreign trade was would be 3.4%. As per the current rawlings, India is the 19th largest exporter with a share of 1.7% and 12th largest importer with a share of 2.5% of foreign trade.

Major Export-Import Zone of India

Special Economic Zones (SEZ)

It is a geographical region that has economic and other laws that are more free market oriented than a country’s typical national laws.

Incentives Granted to SEZ Units, Duty free imports/domestic procurement of goods for development, operation and maintenance of SEZ units.

• 100% income tax exemption for SEZ M units for the first five years, 50% for the next five years and 50% of the ploughed-back export profit for the next 5 yr.
• Exemption from minimum Alternate tax.
• Exemption from the Central sales tax.
• Exemption from the Service tax.
• Exemption from the State sales tax and other levies (e.g. stamp duty and electricity duty) as extended by the respective State Government.
• External commercial borrowing by SEZ units up to US $ 500 million in 1 yr without any maturity restriction through recognised banking channels.
• 100% FDI investment through automatic route.
• Single window clearance for Central and State level approval procedures.

Export Processing Zone (EPZ)

A Free Trade Zone (FTZ) or Export Processing Zone (EPZ), also called foreign trade zone, formerly free port, is an area within, which goods may be landed, handled, manufactured or reconfigured and re-exported without the intervention of the customs authorities.

Only when the goods Eire moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.

Free trade zones Eire organised around major seaports, international airports and national frontiers areas with many geographic advantages for trade.

The seven Export Processing zone in India are

• Madras Export Processing Zone (MEPZ), Madras.
• Cochin Export Processing Zone (CEPZ), Cochin Kerala.
• Santa Cruz Electronic Export Processing zone, S. Cruz, Maharashtra.
• Noida Export Processing Zone, Noida, UP.
• Visakhapatnam Export Processing Zone, Visakhapatnam, AP.
• Kandla Free Trade Zone, KEindla, Gujarat.
• Falta Export Processing Zone, falta, West Bengal.

It is a region where a group of countries has agreed to reduce or eliminate trade barriers. Free trade zones can be defined as labour intensive manufacturing centre that involve the import of raw materisds or components and the export of factory products.

Agri Export Zone (AEZ)

An Agri Export Zone (AEZ) is a specific geographic region in a country demarcated for setting up of agriculture based processing Industries, mainly for export. The term is widely used mainly in India.

AEZ are to be identified by the State Government, who would evolve a comprehensive package of services provided by all State Government agencies, state agriculture universities smd all institutions and agencies of the Union Government for intensive delivery in these zone. Corporate sector with proven credentials would be encouraged to sponsor new agri export zone or take over already notified agri export zone or part of such zones for boosting agri exports from the zones.

Foreign Trade Agreement (FTA)

Across the globe, there is an expanding network of Free Trade Agreements (FTAs). High-guality, comprehensive free trade agreements can play an important role in supporting global trade liberalisation and are explicitly allowed for under the World Trade Organisation (WTO) rules.

Balance of Payment (BoP)

Balance of payments is a systematic record of all economic transactions among the residents of a country and the East of the world.

BoP records the transactions in goods, services and assets among residents of a country with the rest of the world for a specified time period, typically a year. There are two main accounts in the BoP—the Current Account and the Capital Account. In addition to that, BoP includes errors and omissions and change in foreign exchange reserves. BoP is broadly divided into two parts.

Balance of payments is thus, an overall record of all economic transactions of a country in a given period, with rest of the world.

Balance of Trade (BoT)

When the difference in the value of imports and exports of only physical goods or visible items, is taken into account, it is called balance of trade or net exports. Balance of trade may be

• Surplus or Favourable In this situation,In this situation, exports are greater than imports.
  • i.e. Exports > Imports
• Deficit or Unfavourable In this situation, imports are greater than exports.
  • i.e. Exports < Imports
• Equilibrium in Balance of Trade In this situation, total value of goods exported is equal to the total value of goods imported by a country
  • i.e. Exports = Imports

Structure of Balance of Payments

Balance of Payments (BoP) account broadly comprises of the following components

• Current Account: Current account is that account, which records imports and exports of goods and services and uniliteral transfers. The current account is used to mark the inflow and outflow of goods and services into a country. Earnings on investments, both public and private, are also put into the current account.
• Capital Account: It is that account, which records all such transactions among residents of a country and rest of the world, which causes a change in the asset or liability status of the residents of a country or its government. Investments (FDI and FII) and Borrowings (ECB etc) are part of the capital account.

Foreign Investment

Foreign investment means an investment into production or business in a country by an individual or company in another country for profit earning. Typically, foreign investment denotes that foreigners take a some what active role in management as a part of their investment. Foreign investment typically works both ways, especially between countries of relatively equal economic status. Foreign investment on the basis of nature can be categorised into two types

Foreign Direct Investment (FDI)

Broadly, foreign direct investment includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra company loans”. In a narrow sense, foreign direct investment refers just to building new facilities.

It refers to direct investment in the productive capacities of a country by someone from outside the country. Such an investment can be in the form of setting up of a new plant or through purchase of shares of a company, where the shareholding gives the foreign entity control over the business of the company.

Two concepts associated with FDI are

• Greenfield Investment: Its a form of foreign . direct investment, where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
• Brownfield Investment: It happens, when a company or government entity purchases or leases existing production facilities to launch a new production activity.

Tabular Representations of the Key Changes Proposed under the FDI Limits

Sector/Activity	% of FD I/Equity
Defense Sector	100%
Telecom Services	100%
Tea Plantation	100%
Asset Reconstruction Company	100%
Petroleum and Natural Gas	49%
Commodity Exchanges	49%
Power Exchanges	49%
Stock Exchanges/Clearing Corporations	49%
Credit Information Companies	74%
Couries Services	100%
Single Brand Product Retail Trading	100%
Insurance Sector	100%
Pharmcuticles	100%
Animal Husbandry	100%
Food item	100%
e-Commerce	100%

• Foreign Portfolio Investment (FPI): In economics, foreign portfolio investment is the entry of funds into a country where foreigners make purchases in the country’s stock and bond markets, sometimes for speculation. It is a usually short term investment (sometimes less than a year, or with involvement in the management of the company), as opposed to the longer term Foreign Direct Investment partnership (possibly through joint venture), involving transfer of technology and “know-how”. FPI is positively influenced by high rates of return and reduction of risk through geographic diversification. The return on FPI is normally in the form of interest payments or non-voting dividends.
• Foreign Institutional Investment (FII): These are investments by entities from outside the country into the financial assets like debts and shares of companies from a different country, in which they are incorporated. Fils (Foreign Institutional Investment) are required to register with SEBI (Securities and Exchange Board of India) and any foreign individual wanting to invest into India has to come through one of these Fils.

Other Way of Investment

• Participatory Notes (P-Notes): These are financial instruments used by investors or hedge funds that are not registered with the securities and exchange board of India to invest in Indian securities. India based brokerages buy India based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.
• Global Depository Receipts (GDRs): These are equity instruments issued in international markets like London, Luxembourg, etc. Indian companies use GDRs to raise capital from abroad. GDRs are designated in dollars, euros, etc.
• American Depository Receipts (ADRs): These are the equity instruments issued to American retail and institutional investors. They are listed in New York, either on Nasdaq or New York Stock Exchange.
• Indian Depository Receipts (IDRs): These are similar to ADR/GDR. They are used by non-Indian companies in the Indian stock markets for issuing equity to Indian investors.

Convertibility of Rupee 

Convertibility of a currency is the ease, with which it can be converted into any other foreign currency. Current account convertibility which has already been achieved to a large extent in India, refers to freedom in respect of exports and imports. Capital account convertibility refers to freedom in respect of investment and borrowing within India (by outsiders) and outside India (by those inside India).

Capital Account Convertibility in India

Capital Account Convertibility (CAC) for Indian economy refers to the abolition of all limitations ‘  with respect to the movement of capital from India to different countries across the globe. According to the Tarapore Committee, capital account convertibility refers to the freedom to convert local financial assets into foreign financial assets and vice-versa at market determined rates of exchange. It is associated with changes of ownership in foreign/domestic financial assets and liabilities and embodies the creation and liquidation of claims on or by the rest of the world.

Tarapore Committee II

The Reserve Bank of India has released the Report i; of the Tarapore Committee, which was setup to t prepare a roadmap for capital account convertibility, § on 1 st Sep, 2006.

The committee has made several recommendations

• Removal of tax benefits to NRIs.
• Greater autonomy to RBI.
• Complete check on fiscal deficit.s
•  Disallowing investment channel led by a particular country.
•  Reduction of government stake In banks from 51% to 33%.
• Allowing enhanced presence of foreign banks.
• 10% voting limit for investment in banks should be scrapped.
• Non-resident corporates should be allowed to invest in Indian markets.        

Exchange Rate

It is the rate, at which Indian rupee will be I exchanged vis-a-vis other international curren   say US dollar, in the foreign exchange market.

 Double Taxation Avoid  Agreements (DTAA)

DTAA stands for Double Taxation Avoidance Agreement. It is an agreement between two countries with an objective to avoid taxation of the same income in both countries. India has comprehensive Double Taxation Avoidance Agreements (DTAA) with 84 countries as of now. These treaties benefit institutions and individuals who earn in countries other them their country of residence, provided such an arrangement exists between their country of residence and the country/countries where their income sources are.

International Organisations

An International Organisation has been defined as a forum of cooperation of Sovereign states based on multilateral international agreement and comprising of a relatively stable range of participants. The fundamental features of this is the existence of permanent organs with definite competencies and powers acting for carrying out of common aims. In common language, it is known as Inter-governmental Organisations.

Bretton Woods Conference

The Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from 1st to 22nd July 1944, in Bretton Woods, New Hampshire, to agree upon a series of new rules for the post (World War II) International Monetary System (IMS). The two major accomplishments of the conference were

• The creation of the International Monetary Fund (IMF).
• The creation of the International Bank for Reconstruction and Development (IBRD) also known as World Bank.

Reconstruction has remained an important focus of the bank’s work, given the natural disasters, humanitarian emergencies and post-conflict rehabilitation needs.

International Monetary Fund

The IMF came into formal existence in December, 1945 when its first 29 member countries signed its Article of Agreement. It began operations on 1st Mar, 1947. At present, 188 nations are members of IMF. The IMFs primary purposes is to ensure the stability of International Monetary System, system of exchange rates and international payments that enable countries (and their citizens) to transact with one another. This system is essential for promoting sustainable economic growth, increasing living standards and reducing poverty.

Main Objective of IMF

• To promote international monetary cooperation.
• To facilitate the expansion of international trade.
• To ensure stability to foreign exchange rates.
• To reduce disequilibrium in the international balance of payments of member countries.
• To promote capital investment in backward and underdeveloped countries.
• To assist in the establishment of a multinational system of payments in respect of current transactions between the member countries.
• The secure multilateral convertibility (i.e. to convert the currency of any member into the currency of any other member).

India and IMF

• India is a founder member of IMF.
• Finance Minister is the ex-officio governor or the board to the governors of the IMF. RBI governor is the alternate governor at the IMF.

IMF Quota

When a country joins the IMF, it is assigned to an initial quota in the same range as the quotas of existing members that are broadly comparable in economic size and characteristic. The quota determines the country’s financial contribution to the IMF, its voting power and ability to access IMF financing. Quota subscriptions generate most of the IMF’s financial resources.

IMF Member’s (Major Country) Quotas in Descending Order

Country	Quotas (in %)	Country	Quotas (in %)
USA	17.69	Italy	3.21
Japan	6.56	India	2.79
China	6.49	Russia	2.75
Germany	5.67	Brazil	2.35
France	4.29	Canada	2.35
UK	4.29

Special Drawing Rights (SDRs)

SDR, is an international reserve asset, created by the IMF in 1969, to supplement its member countries official reserves. Its value is based on a basket of five key international currencies US Dollar, Japanese Yen, Pound Sterling, Euro Chinese renminbi (RMB) and SDRs can be exchanged for freely usable currencies.

World Bank

Since inception in 1944, the World Bank has expanded from a single institution to a closely associated group of five development institutions. Their mission evolved from the International Bank for Reconstruction and Development (IBRD) as facilitator of post-war reconstruction and development to the present-day mandate of world wide poverty alleviation in close coordination with the International Development Association and other Members of the World Bank Group.

Establish	July, 1944
Headquarter	Washington
Membership	189 countries (IBRD),173 countries (IDA)
President	Jim Y ong Kim (12th President)

Objectives of World Bank

Its main objective is to provide financial help for the economic development and reconstruction of member nations. Other objectives includes

• To put the world on the path of development
• To reduce the number of poor in world
• To encourage the international finance

Function of World Bank

Following are the main function of World Bank

• Investing in people, particularly through basic education and.health.
• Focusing on social development, including governance and institution-building as key elements of poverty reduction.
• Strengthening ability of the governments to deliver quality services, efficiency and transparency.
• Protecting the environment.
• Supporting and encouraging private business development.
• promoting reforms that create stable macronomic environment which is conducive to long term investment.

World Bank Group

The World Bank Group is a family of five international organisation that make leveraged loan to poor countries. Its five organisations are as follows

•  International Bank Of Reconstruction and Development (IBRD).
•  International Development Association (IDA).
•  International Finance Corporation (IFC).
•  Multilateral Investment Guarantee Agency (MIGA).
• International Centre for Settlement Of Investment Disputes (ICSID).

International Bank for Reconstruction  and Developement(IBRP)

International Developement Association(IDA)

International Finance corporation  (IFC)

Multilateral Investment Guarantee Agency (MIGA)

International center for settlement of Investment Disputes(ICSID)

IMF Vs World Bank

Similarities

•  Both are Bretton Wood heirs.
• Both were established to promote economic cooperation.

Differences

•  World Bank provides long term loans for promoting balanced economic development.
•  IMF provides short term loans to member countries.

General Agreement on Tariffs and Trade (GATT)

• It was a multilateral agreement regulating international trade. According to its preamble, its purpose was the ‘substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis’.
• It was negotiated during the United bfations Conference on Trade and Employment and was the outcome of the failure of negotiationg governments to create the International Trade Organisation (ITO).
• GATT was signed in 1947 and lasted until 1994, when it was replaced by the World Trade Organisation in 1995. The original GATT text (GATT 1947) is still in effect under the WTO frame work subject to the modifications of GATT 1994.

World Trade Organisation (WTO)

It is the only global international organisation dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters and importers conduct their businesses smoothly

Established	1st Jan,1995
Headquarter	Geneva,Switzerland
Membership	164
Establishment	1967
Created by	Uruguay Round negotiation (1986-94)

Functions of WTO

• Administering WTO trade agreements.
• Forum for trade negotiations.
• Handling trade disputes.
• Monitoring national trade policies.
• Technical assistance and training for developing countries.

WTO and India

India is the foundation member of WTO. India can secede from WTO at any time as per its will.

• India in recent years has emerged as the leader of developing countries.
• India due to its membership has influenced many economic decisions of WTO.
• Due to patent laws under WTO agreements, Indian medicines and seeds prices have gone up.
• WTO membership has led to less members of _; bilateral trade agreements for India.
• Being a member of WTO, India has become more attractive to foreign investors. It has helped India to l attract foreign investments.
• Due to WTO member, India’s foreign trade, in both goods and services has seen significant growth.

There are a total of 164 member countries in the WTO, with Afghanistan being new member as of 2016 of the original GATT members.

International Financial Organisations

These are as follows

United Nations Industrial Development Organisation (UNIDO)
UNIDO is the specialised agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalisation and environmental sustainability. The mandate of the United Nations Industrial Development Organisation (UNIDO) is to promote and accelerate inclusive and sustainable industrial development in developing countries and economies in transition.

Bank for International Settlements (BIS)
The mission of the Bank for International Settlements (BIS) is to serve centred banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.The head office of BIS is in Basel, Switzerland and there are two representative offices; in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City. Established on 17th May, 1930, the BIS is the world’s oldest international financial organisation.

World Intellectual Property Organisation (WIPO)
It is one of the specialised agencies of United Nations and established in 1967. Its headquarters are in Geneva, Switzerland. WIPOs mission is to lead the development of innovative, creative intellectual property system which benefits all.

Food and Agriculture Organisation (FAO)
It is an agency of the United Nations that leads international efforts to defeat hunger serving both developed and developing countries. The World headquarters of FAO are located in Rome, in the former seat of the Department of Italian East Africa. FAO was established in 1945.                           .

International Labour Organisation (ILO)
The ILO was founded in 1919, in the wake of a destructive war, to pursue a vision based on the promise that universal, lasting peace can be established only if it is based on social justice. The ILO became the first specialised agency of the UN in 1946. 185 of the 193 UN member states are members of the ILO.

International Fund for Agricultural Development (IFAD)
It is a specialised agency of the United Nations, which was established as an International Financial Institution in 1977 as one of the major outcomes of the 1974 World Food Conference.

Asian Development Bank (ADB)
Asian Development Bank is a regional development bank. ADB was modelled closely on the World Bank and has a similar weighted voting system where goods are distributed in proportion with member’s capital subscription.

Headquarters	Manila, Philipines
Members	67 (48 area from Asia and the Pacific and rest of 19 from outside)
Establishment	22nd Aug, 1966

Objectives of ADB

• The bank aims at fighting poverty in Asia and in the Pacific. The bank gives special attention to the needs of the smaller or less-developed countries and priority to regional, sub-regional and national projects and programmes. ADB was basically founded to promote the social and economic progress of the Asian and the Pacific region.
• It facilitates economic development of Asian countries primarily by lending of funds for development purposes. It is modeled closely on the World Bank and functions in a similar manner.

Asian Infrastructure Investment Bank (AIIB)

• It is a Multilateral Development Bank (MDB) conceived for the 12th century. Chinese President Xi Jinping and Premier Li Keqiang announced the AIIB initiative during their respective visits to South-East Asian countries in October, 2013.
• Representatives from 22 countries signed the October, 2014 Memorandum of Understanding (MOU) to establish the A HR and Beijing was selected to host bank headquarters.
• By the deadline of 31st March for submission of membership applications, the Prospective Founding Members had increased to 57, and the 4th CNM was organised in Beijing in April 2015, after ratifications were received from 10 members states holding a total number of 50% of the initial subscriptions of the Authorised Capital Stock.

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)

• It is an international organisation involving a group of countries in South Asia and South East Asia. On 6th June, 1997, sub-regional grouping was formed in Bangkok and given the name BIST-EC (Bangladesh, India, Sri Lanka and Thailand Economic Cooperation). Later, Myanmar, Nepal and Bhutan became its full member, thus its name became BIMSTEC. BIMSTEC has fourteen priority sectors which cover all areas of cooperation.

SAARC Preferential Trading Arrangement (SAPTA)

• In December 1991, the Sixth Summit held in Colombo approved the establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAARC Preferential Trading Arrangement (SAPTA) by 1997.
• Given the consensus within SAARC, the Agreement on SAPTA was signed on 11th April, 1993 and entered into force on 7th Dec, 1995 well in advance of the date stipulated by the Colombo Summit. The Agreement reflected the desire of the Member States to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions.

South Asian Free Trade Area (SAFTA)

• SAFTA came into force on 1 January, 2006. It is an agreement leached on 6th Jan, 2004 at the 12th summit in Mamabad, Pakistan. It created a free trade area i:’ 1.6 billion people in Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka (as of 2011, the combined population is 1.8 billion people). The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016.

Shanghai Cooperation Organisation (SCO)

• It is a Eurasian political, economic and military organisation which was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstah, Russia, Tajikistan and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai-5, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organisation.
• The SCO has established relations with the United Nations, where it is an observer in the General Assembly, the European Union, Association of South-East Asian Nations (ASEAN), the Commonwealth of Independent States and the Organisation of Islamic Cooperation.

Various Trade Blocks G-77

The G-77 was setup on 15th June, 1964 by 77 developing countries. Its first ministerial meeting was held at Algiers, Algeria in 1967. G-77 is the largest coalition of the third world nations. The membership of G-77 has increased to 133 countries, the original name has been retained because of its historic significance.

G-7

The group of B (G-8) was a name of a group of 8 leading industrialised countries. Namely, Canada, France, Germany, Italy, Japan, UK, USA and the Russia. Earlier it was known as G6; after addition of Canada it became G7. In 1997, Russia was made a member and the group of seven became G-8 and again in 2014 Russia was suspended from Group due to Crimean crisis. The group of eight can be traced back to November, 1975, when the French President, Velary Giscard and Chancellor of West Germany Helmut Schmidt invited Britain, USA, Japan and Italy for a meeting at the Chateau, France, to discuss the economic crisis resulting from rise of oil prices.

G-15

The Group of 15 (G-15) is an informal forum set up to foster cooperation and provide input for other international group, such as the WTO and the group of 7.

Headquarters – Geneva, Switzerland
Members – 17
Establishment – 1989

It is a group of developing countries that coordinate on trade and economic issues. It was created in order to help a group of countries that were all facing similar problems. The G-33 has proposed special rules for developing countries at WTO negotiations, like allowing them to continue to restrict access to their agricultural markets.G-33

G-20

The Group of 20 Finance Minister and Central Bank Governor also known as (G-20) is a group of Finance Minister and Central Bank Governor from 20 major economies.

• Formally established on 26th Sep, 1999, the Finance Ministers of the G-7 announced the formation of the G-20 in Washington DC to establish an informal mechanism for dialogue among systematically important countries, including the industrialised countries and the big emerging markets within the framework of the Bretton Woods Institutional System.
• The inaugural meeting of the G-20 was held in Berlin on 15th-16th Dec, 1999.

Group of 24 (G-24)        

Headquarters	Belgrade (Serbia)
Members	24
Establishment	1971

Objectives: To coordinate the positions of developing countries on international monetary and development of finance issues and to ensure that their interests are adequately represented in negotiations on international monetary matters G-24 was founded in 1991.

E9

• The E9 is a forum of nine countries, which was formed [ to achieve the goals of UNESCO’s initiative Education i For All (EFA).
• The E stands for education and the’9′ represents the ; following nine countries Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Nigeria and Pakistan.E 9 initiative has become a forum for the countries to discuss their experiences related to education, exchange best practices and monitor EFA-reiated progress.

IBSA

Members	3 (India, Brazil, South Africa)
Establishment	2003 by Brasilia Declaration

Objective

• IBSA was formed to promote South-South cooperation. It aims at increasing the trade opportunities among the 3 countries and facilitating the trilateral exchange of information, technologies and skills to complement each other’s strength.

Common Market for Eastern and Southern Africa (COMESA)

Headquarters Lusaka, Zambia Members 20 (Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea,

Ethiopia, Kenya, Libya, Madagascar, South Sudan, Sudan, Switzerland, Uganda, Zambia, Zimbabwe) Establishment December, 1994

• Objectives
• To cooperate in developing natural and human resources for the welfare of people.
• The main focus is on the formation of a large economic and trading unit and to bring economic prosperity through regional integration.

The Southern Common Market (MERCOSUR)

Headquarters	Montevideo, Uruguay
Members	5 (Brazil, Argentina, Paraguay, Uruguay, Venezuela).
Official Language	Portuguese, Guarani, Spanish
Establishment	1991 (by Treaty of Asuncion)

Objectives

• Free transit of produced goods, services and factors among member states.
• Fixing of a Common External Tariff (CET)

and adoption of a common trade policy in order to ensure free competition between member states.

Brazil, Russia, India, China and South Africa (BRICS)

Members	5 (Brazil, Russia, India, China and South Africa)
Establishment	2009
Term Coined by	Jim O’Neil of Goldman Sachs coined the Acronym BRIC in 2001.

Objectives

• To boost cooperation among member states and take steps to jointly respond to common challenges.
• To play a key role in reforming the world management systems and contribute towards maintaining economic growth, peace and security

New Development Bank

• The New Development Bank (NDB) formerly referred to as the BRICS Development Bank, created by Brazil, Russia, India, China and South Africe (BRICS) nations formally started its operation on 21st July, 2015 from its headquarters in Shanghai .China.

Asia-Pacific Economic Co-operation (APEC

Establishment	1989
Members	21 Pacific Rim Countries
APEC	Consists of annual ministerial

meetings, senior officials meeting, working groups and a secretariat.

Objectives

• To assist growing inter-dependence among Asia-Pacific economies. APEC began as an informal dialogue group, but has now grown to become the primary regional vehicle for promoting open trade and practical economic co-operation among its members.
• The objective of APEC is to promote free and open trade in the Asia-Pacific region through trade and investment, liberalisation and facilitation.

Organisation of the Petroleum Exporting Countries (OPEC)                   

Headquarters	Vienna, Austria
Members	12 (Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya,Nigeria,Qatar,Saud Arabia, UAE and Venezuela)
Official Language	English
Establishment	1960

OPEC nations account for two thirds of the world’s oil reserves and 33.3% of the world’s oil production.

ASEAN-India Free

Trade Agreement (AIFTA)

It is a free trade area among the ten member states of the Association of South-East Asian Nations (ASEAN) and India. The initial framework agreement was signed on 8th Oct, 2003 in Bali, Indonesia and the final agreement was reached on 13th Aug, 2009.

South Asian Association for Regional Cooperation (SAARC)

Headquarters	Kathmandu, Nepal
Official Language	Enghsh
Demonym	South Asian
Membership	8 Members
Establishment	8th Dec, 1985

Objectives

• To promote the welfare of the people of South Asia and to improve their quality of life.
• To strengthen cooperation with other developing countries.
• To cooperate with international and regional organisations with similar aims and purposes.
• To maintain peace in the region.

Association of South-East Asian Nations (ASEAN)             

Headquarters	Jakarata, Indonesia
Members	10 (Brunei, Cambodia, Indonesia,Malaysia, Myanmar, Vietnam, Laos,Thailand, Singapore and Philippines
Establishment	English
Establishment	1967

Objectives

Accelerating economic growth, social progress, cultural development among its members, protection of regional peace and stability. Providing opportunities for member countries to discuss differences peacefully.

European Union (EU)

Headquarters	Brussels, Belgium
Members	27
Establishment	18th April, 1951

Objectives

The Treaty of Maastricht identified five goalsdesigned to unify Europe in more ways than just economically.

The goals are as follows

• To strengthen the democratic legitimacy of institutions.
• To improve the effectiveness of the institutions.
• To establish an economic and monetary union.
• To develop the community social dimension.

Euro

It was the single currency of European Union, which came in circulation by 1999.

Euro Zone                           

Euro Zone was found under the treaty of Maastricht. The Treaty of Maastricht (officially the Treaty on European Union) was signed by the 12 member states of the European Economic Community on 7th Feb, 1991 in Maastricht, the Netherlands, after final agreement on 9th Dec, 1991. It entered into force on  1st Nov, 1993. The EU now has 27 member states. Brexit is an acronym for British exit. It is used for the separation of the UK from European Union.

QUESTION BANK

1. Foreign Direct Investment (FDI) is investment directly into production in a country by a company located in another country, then which one of the following modes is correct about the FDI?

1. Buying a company in the target country
2. Expanding operations of an existing business in that country
3. Investing in the shares and stocks of a company in the target country
4. Both 1 and 2
5. All of the above

2. Which one of the following factors is taken into account to calculate the Balance of Payment (BoP) of a country?

1. Current account
2. Changes in the foreign exchange
3. Errors and omissions
4. All of the above
5. None of the above

3. BoP (Balance of Payment) refers to

1. transactions in the flow of capital
2. transactions relating to receipts and payment of invisible
3. transactions relating only to exports and imports
4. systematic record of all its economic transaction with the rest of the world
5. All of the above

4. As per recent reports, many countries are planning to introduce ‘Tobin Tax’, the idea of which was given by a nobel prize winner economist James Tobin in 1978. Tobin Tax, if implemented, will be levied on which of the following?

1. On the interest income of corporates earned through major investments
2. All cash transactions
3. Services availed specifically by an elite group of people
4. Foreign exchange transactions
5. None of the  above

5. Which of the following is the component of India’s Foreign Exchange Reserve?

1. Special drawing rights
2. Reserve tranche position of India in IMF
3. Indian currency held by foreign countries
4. Both 1 and 2
5. All of these

6. All of the following are useful options for the government to pursue to bolster foreign exchange

1. reserves, except to
2. impose exchange controls
3. impose export controls
4. adjust the exchange rate
5. borrow foreign currencies
6. permit a free floating exchange rate

7. The balance of international indebtedness is a record of a country’s international

1. investment position over a period of time
2. investment position at a fixed point in time
3. trade position over a period of time
4. trade position at fixed point in time
5. None of the above

8. On the balance of payments statements, merchandise imports are classified in the

1. current account
2. capital account
3. unilateral transfer account
4. official settlements account
5. None of the above

9. Which one of the following is the investment in securities that is intended for financial gain only and does not create a lasting interest in or effective management control over an enterprise?

1. Foreign direct investment
2. Portfolio investment
3. Equity direct investment
4. Both 1 and 3
5. None of these

10. Inward remittances by foreign steamship and airlines companies to finance their operating expenses in the country are shown under

1. the credit side of the current account of balance of payment
2. the debit side of the current account of balance of payment
3. the credit side of the capital account of balance of payment
4. the debit side of the capital account of balance of payment
5. None of the above

11. Balance of trade of a country is equivalent to

1. difference between the inward and outward remittances made in foreign exchange
2. surplus generated shown in a trading account
3. difference between exports and imports
4. All of these
5. None of these

12. With regard to the Export Policy of the Government of India, which of the following statements is correct?

1. All commodities can be exported without license
2. Export licenses are required for only a few items
3. Export licenses are required for all items
4. All of these
5. None of these

13. In India, which of the following agencies is responsible for announcing the Foreign Trade Policy?

1. RBI
2. EXIM Bank
3. Foreign Ministry
4. Industry and Commerce Ministry
5. None of these

14. What is the full form of ‘EPZ’?

1. Economical Plus Zone
2. Entertainment Plus Zone
3. Export Promotion Zone
4. Electronic Promotion Zone
5. None of the above

15. SDR, is an international reserve asset, created by the IMF in

1. 1956
2. 1963
3. 1969
4. 1974
5. 1982

16. If the current account for a country is in deficit, then there must be

1. a surplus in the government budget
2. low interest rates
3. high productivity
4. a capital account surplus
5. the presence of attractive investment opportunities

17. A potential problem with free floating exchange rates is that

1. people who practice arbitrage may gain from the losses of others
2. uncertainty in exchange rate fluctuations may hinder international trade
3. exchange rates may never reach equilibrium
4. the currency markets may become monopolised
5. less developed countries may issue too much currency

18. The balance of trade is given by

1. income receipts minus income payments on investments
2. the balance of unilateral transfers
3. merchandise exports plus service exports minus the sum of merchandise and service imports
4. merchandise exports minus merchandise imports
5. the balance on current account

19. Which one of the following percentages is the share of the Indian export in the international trade?

1. Less than 1%
2. More than 1%, but less than 3%
3. More than 3%, but less than 5%
4. More than 5%, but less than 7%
5. More than 8%

20. The balance on current account includes all of the following items except

1. merchandise exports minus merchandise imports
2. exports of services minus imports of services
3. income receipts minus income payments on investments
4. changes in US assets owned abroad and foreign assets owned in the US
5. unilateral transfers of currency by individuals

21. In an economy’s Balance of Payments account,

1. the capital and current accounts must add to 1
2. the current account is always greater than the capital account
3. both the balance on current account and the balance on capital account are zero
4. the capital plus current account balances must equal zero
5. capital outflows must equal capital inflows

Floating exchange rates refers to

1. the ability of exchange rates to even out when displaced by shocks to the foreign exchange market
2. new issues of foreign exchange offered on the market
3. an exchange rate determined by the demand for and supply of a nation’s currency
4. an excess demand for a nation’s currency that causes its devaluation
5. an excess supply of a nation’s currency that causes its appreciation

23. People who practice arbitrage will create mutually consistent exchange rates if

1. they operate in a country that practices exchange controls
2. exchange rates are set properly by government
3. productivity increases in the economy of the country whose currency is being traded
4. they buy a currency in one market at a low price and then sell at a high price in another market
5. the currency being traded appreciates

24. Many a time we read about Special Drawing Right (SDR) in newspapers. As per its definition, SDR is a monetary unit of the reserve assets of which of the following organisations/agencies?

1. World Bank
2. International Monetary Fund (IMF)
3. Asian Development Bank
4. Reserve Bank of India
5. None of the above

25. Which of the following countries has been given permanent membership of the World Trade Organisation recently?

1. Ukraine
2. India
3. Pakistan
4. Sri Lanka
5. None of these

26. Which of the following policies of the financial sectors is basically designed to transfer local financial assets into foreign financial assets, freely and at market determined exchange rates?

1. Capital Account Convertibility
2. Financial Deficit Management
3. Minimum Support Price
4. Restrictive Trade practices
5. None of the above

27. The Foreign Trade Policy announced in the year 2004 was announced for a period of

1. two years
2. three years
3. four years
4. five years
5. ten years

28. The letter ‘D’ stands for which of the following the abbreviated name OECD? Organisation of Economic Cooperation and

1. Defence
2. Direction
3. Dominance
4. Development
5. Devaluation

29. The IMF and the World Bank were conceived as institutions

1. strengthen international economic cooperation and to help create a more stable and prosperous global economy
2. IMF promotes international monetary cooperation
3. The World Bank promotes long term economic development and poverty reduction
4. All of the above
5. None of the above

30. In which year was World Bank formed?

1. 1945
2. 1956
3. 1960
4. 1988
5. 1978

31. The capital of IMF is made up by contribution of the

1. credit
2. deficit financing
3. member nations
4. borrowing
5. All of these

32. India’s foreign trade is maximum with

1. OPEC countries
2. OECD countries
3. East European countries
4. Developing countries (excluding members of OPEC)
5. None of these

33. One of the main aims of General Agreement of Tariffs and Trade (GATT), and now of WTO, is to obtain

1. A general agreement on free imports and exports
2. A reduction of the burden of import and export duties on small trading nations
3. A reduction of tariffs by mutual negotiation and elimination of import quotas
4. Improvement in economic condition of developing countries
5. None of the above

34. Whose part is the International Bureau of Education?

1. UNESCO
2. UNIDO
3. IMF
4. All of these
5. None of these

35. As per the reports published by the World Bank, what percentage of Indian population lives below the new International Poverty Line?

1. 30%
2. 62%
3. 52%
4. 42%
5. 68%

36. Which of the following is not an original member of the UN?

1. Pakistan
2. India
3. Poland
4. Cube
5. All of these

37. Who is the watch dog of international trade?

1. World Bank
2. WTO
3. IMF
4. ILO
5. IBRD

38. As per the news reports members of the SAARC agreed to establish a ‘SAARC’ Food Bank’ to ensure food security for members in case of any emergency. Which of the  following nations agreed to provide maximum quantity of food for the bank?

1. India
2. Pakistan
3. Bhutan
4. Nepal
5. Sri Lanka

39. What are the ad-hoc bodies of the UN General Assembly?

1. Special Committee on Peace Keeping Operation, Human Rights Committee, Committee on the Peaceful Use of Outer Space
2. Conciliation Commission for Palestine, Conference on Disarmament, International Law Commission, Scientific Committee on the effects of Atomic Radiation
3. Special Committee on the Implementation of the Declaration on the Granting of Independent Countries and Peoples Commission on International Trade Law
4. All of the above
5. None of the above

40. As reported in various newspapers/ magazines, India has doubled its credit to Africa for 5 yr from next fiscal. This decision was taken in which of the following forums?

1. Meeting of the G-8 nations
2. Meeting of the World Trade Organisation 2008
3. India-Africa Forum Summit 2008
4. Meeting of the Foreign Ministers of the SAARC
5. None of the above

41. Which of the following is not a member of ASEAN?

1. Malaysia
2. Indonesia
3. Vietnam
4. Britain
5. Singapore

42. Which of the following pairs is not correct?

1. SAARC                  : New Delhi
2. ASEAN                  : Jakarta
3. International Committee : Geneva of the Red Cross
4. Interpol                 : Geneva
5. Both 3 and 4

43. The second BIMSTEC Summit was organised in November 2008 in

1. Dhaka
2. Kathmandu
3. Thimpu
4. New Delhi
5. None of these

44. Where is the Headquarters of Inter Parliamentary Union?

1. Sweden
2. UK
3. USA
4. Switzerland
5. India

45. When did World Trade Organisation come into force?

1. 2nd Jan, 1948
2. 1st Jan, 1995
3. 12th Jan,-1948
4. 15th Jan, 1946
5. 13th Jan, 1947

46. What is the number of member states in the World Trade Organisation?

1. 144
2. 148
3. 150
4. 164
5. 170

47. Who have the largest share of world trade?

1. European Union, USA
2. Japan
3. Canada
4. All of these
5. None of these

Where is the headquarters of World Trade Organisation?

1. New Delhi
2. New York
3. Geneva
4. Rome
5. None of the above

49. Which UN Organisation is called as the World Bank?

1. International Bank for Reconstruction and Development (IBRD)
2. International Banking System
3. International Banking Management System
4. None of the above
5. All of the above

50. Which one of the following institutions publish the report of ‘World Economic Outlook’?

1. IMF
2. World bank
3. RBI
4. UNCTAD
5. Citi Bank

51. How is the United Nation Monetary and Financial Conference where in the agreements were signed to setup IBRD, GATT and IMF, commonly known?

1. Bandung Conference
2. Bretton Woods Conference
3. Versailles Conference
4. Yalta Conference
5. Geneva Conference

52. Which one of the following countries is the first borrower of fund from the International Monetary Fund?

1. United States
2. France
3. Spain
4. India
5. Sri Lanka

53. Which one of the following statements is true regarding IMF?

1. It is not an agency of UNO
2. It can grant loan to any country of the world
3. It can grant loan to State Government of a country
4. It grants loan only to member nations
5. All of the above

54. Voting rights in the IMF are distributed on the basis of

1. one country, one vote
2. proportion to the share of the income of the country in the world income
3. proportion to contributions given by each country
4. proportion to quota allotted to countries from time to time
5. None of the above

55. Which of the following is not a member of Organisation of the Petroleum Exporting Countries (OPEC)?

1. Algeria
2. Brazil
3. Ecuador
4. Nigeria
5. All of these

56. The headquarters of IMF and World Bank are located at

1. Geneva and Montreal
2. Geneva and Vienna
3. New York and Geneva
4. Washington DC
5. Nigeria

57. Which one of the following is the final session of the General Agreement on Tariff and Trade (GATT)?

1. Singapore Session
2. Geneva Session
3. Washington Session
4. Uruguay session
5. Vienna session

58. Balance of trade may be surplus or favourable, when

1. Exports < Imports
2. Exports = Imports
3. FDI = Imports
4. Exports > Imports
5. Imports = FDI

59. Which of the pillars given above is/are included in Agreement on Agriculture of the WTO?

I. Domestic support
II. Market access
III. Export subsidies

Select the correct answer using the codes given below

1. Only II
2. I and III
3. II and III
4. Only I
5. All of these

60. Consider the following statements

I. WTO was established on 1st Jan, 1995.
II. It was created by Uruguay round negotiation.
III. WTO has 159 members countries.

Which of the statements given above are correct?

1. Iand II
2. I and HI
3. II and III
4. All of these
5. None of these

61. Consider the following statements.

I. IMF and World Bank both are Bretton Wood heir.
II. World Bank provides long term loan for promoting balanced economic development.
III. IMF provides loans to eliminate BoP disequilibrium.

Which of the statements given above are correct?

1. I and II
2. n and in
3. I and III
4. All of these
5. None of these

62. Consider the following organisations

I. International Bank for Reconstruction and Development (IBRD)
II. International Finance Corporation (IFC)
III. International Fund for Agricultural Development (IFAD)
IV. International Monetary Fund (IMF)

Which of the above agencies of United Nations is/are correct?

1. II, IIIand IV
2. I, II and III
3. II and III
4. III and IV
5. I and II

63. Consider the following statements regarding ADB.

I. ADB was established in 1966 and has 67 members at present.
II. The bank aims at fighting poverty in Asia and in the Pacific.
III. The functions of ADB are different from that of world Bank.

Which of the statements given above is/are correct?

1. Only I
2. Only II
3. Only III
4. Iand II
5. All of these

64. Which of the following is/are included in ‘Deficit Financing’ in India?

I. Borrowing from the Reserve Bank of India.
II. Issue of new currency notes.
III. Withdrawal of past balances/surpluses etc.

Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

65. Which of the following statements is/are true about the 34th Summit of the World’s eight most industrialised nations (G-8 Summit) held in July, 2008?

I. The summit took place in Moscow, n. Leaders of G-8 countries endorsed a proposal to have the quantity of the carbon emissions in the air by the year 2050.

II. Leaders of G-8 nations also expressed their strong concern about the sharp and frequent rise in the prices of oil products globally.

Codes

1. Only I
2. Only II
3. Only m
4. I and m
5. All of these

66. Consider the following items.

I. Gems and jewellery
II. Chemicals and related products
III. Engineering goods
IV. Textiles

Which of the items given above are the top items in India’s manufactured exports?

1. I, II and III
2. I, II and IV
3. II, III and IV
4. All of these
5. None of these

67. We very frequently read about the activities of the Foreign Exchange Market in newspapers/ magazines. Which of the following is/are the major functions of the same?

I. Transfer of purchasing power from domestic to foreign market, n. Providing credit for financing foreign trade.
II. Power to purchase gold from foreign

countries, as most of the nations still work on Gold Standards.

Codes

1. Only I
2. Only II
3. Only III
4. I and II
5. II and III

68. As per the RBI ,the economic conditions in India are not yet suitable for full convertibility of Rupee. At present Rupee is convertible at which of the following accounts?

I. Fully at Capital Account
II. Fully at Current Account
III. Partially at Trade Account Codes

1. Only I
2. Only II
3. Only III
4. Only II and IIl
5. None of these

69. Choose the correct option related to World Bank Organisations, IBRD and IDA.

I. India use IDA funds on social sector.
II. India use IBRD funds on infrastructure development.
III. IBRD loans are cheaper than IDA loans. 

Which of the statements given above is/are correct?

1. Only I
2. Only II
3. I and II
4. II and III
5. All of these

70.  As per the news published in various financial newspapers, the RBI is r-working the roadmap on Capital Account Convertibility. If this is done, who amongst the following
would be able to invest in foreign projects or acquire assets outside India without any restrictions?

I. Public Sector Banks
II. Companies which are registered in India
III. Government of India
IV. Any Individual

Select of the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

71. Consider the following statements.

I. Nominal Effective Exchange Rate (NEER) is the weighted average of bilateral exchange rate of the home currency in the terms of foreign currencies.
II. Real Effective Exchange Rate (REER) is used to measure the movements of exchange rate as well as inflation differentials between India and its major trading partners.

Which of the statements given above is/are correct?

1. Only I
2. Only II
3. Both I and II
4. Neither I nor II
5. Either I or II

72. In order to attract, more foreign exchange the Government of India decided to allow foreign investment in LLP firms, what is full form of ‘LLP’ as used in this reference?[IBPS PO 2011]

1. Local Labour Promotion
2. Low Labour Projects
3. Limited Loan Partnership
4. Longer Liability Partnership
5. Limited Liability Partnership

73. Which of the following organisations has given a warning to the nations of the world that there may be increased risk to global financial stability in the world?[RBI Grade B 2011]

1. World Bank
2. World Trade Organisation
3. Asian Development Bank
4. International Monetary Fund
5. United Nation Organisation

74. Which of the following economic concepts is ‘categorised on the basis of current account or capital account or both? [RBI Grade B 2011]

1. Balance of payments
2. Value of the foodgrain stock of a country
3. Gross National Product (GNP)
4. Gross National Income (GNI)
5. Total collection of direct taxes in a year

75. Special Drawing Rights are the rights of countries provided by [RBI Grade B 2011]

1. World Bank
2. IMF
3. ADB
4. Federal Reserve
5. None of these

76. Which of the following statements is true about International Monetary Fund (IMF)? [RBI Grade B 2011]

1. It provides ways and means funds to member countries
2. It is an agency of the World Bank and is situated in Prague
3. It makes all the rules and regulations in relation to the world trade between the nations
4. On becoming its member, countries get finance as temporary balance of payment needs
5. It is an organisation floated by the members of NATO and caters to the need of those countries only

77. The main function of the IMF is [Indian Overseas Bank 2011; Corporation Bank 2011]

1. to help solve balance of payments problems of member countries
2. to arrange international deposits from banks
3. to act as private sector lending arm of the World Bank
4. to finance investment loans to developing countries
5. None of the above

78. On which one of the following issues has IMF supported monetary policy of India? [Indian Overseas Bank 2011]

1. Introduction of GST
2. Stimulus for agriculture sector
3. Concessions for foreign investment
4. Tightening of monetary policy
5. None of the above

79. Where is the head office of the International Monetary Fund (IMF)? [Andhra Bank 2011]

1. Paris
2. New York
3. Washington DC
4. Dhaka
5. Beirut

80. Invisible Export means export of [Corporation Bank 2011]

1. services
2. prohibited goods
3. unrecorded goods
4. goods through smuggling
5. All of these

81. What is ‘financial inclusion’? [Allahabad Bank 2011]

I. Easy access to bank accounts for safe parking of savings.
II. Availability of cheap credits through appropriately designed loans for poor and low income households and small entrepreneur.
III. Availability of basic financial products like insurance.

Select the correct answer using the codes given below

1. Only I
2. Only n
3. Only III
4. I and II
5. All of these

82. Which of the following organisations provides guarantee to the exporters?[Allahabad Bank 2011]

1. Exim Bank
2. Export Credit Guarantee Corporation
3. Director General Foreign Trade
4. Reserve Bank of India
5. Registrar of Companies

83. Which of the following organisations issues the rules of global trade? [Allahabad Bank 2011]

1. World Bank
2. World Trade Organisation
3. Foreign Exchange Dealers’ Association
4. Directorate General of Foreign Trade
5. None of the above

84. What is cross border exchange? [Allahabad Bank 2011]

1. Trading of foreign currency in India
2. Trading of Indian rupee in exchange of other currencies/goods
3. Hawala transactions in Indian rupee
4. Unauthorised remittance of Indian rupee
5. None of the above

85. The difference between visible exports and visible imports is defined as[Corporation Bank 2011]

1. Balance of trade
2. Balance of payments
3. Balanced terms of trade
4. Gains from trade
5. All of the above

86. Euro was the single currency of European Union, which came in circulation by [Corporation Bank 2011]

1. 1970
2. 1985
3. 1999
4. 2002
5. 2007

87. The term ‘FTZ’ stands for [SBI Clerk 2012]

1. Free Trade Zone
2. Food Trade Zone
3. ireign Trade Zone
4. Fiscal Trade Zone
5. Financial Trade Zone

88. In addition to India and China the following nations are also members of ‘BRICS’ [SBI Associate 2012]

1. Bangladesh, Russia and Sri Lanka
2. Belgium, Romania and South Africa
3. Belgium, Russia and Saudi Arabia
4. Brazil, Russia and South Africa
5. Bhutan, Russia and Sri Lanka

89. Which of the following countries is not a member of Organisation of the Petroleum Exporting Countries (OPEC)? [SBI Associate 2012]

1. Angola
2. Libya
3. Bangladesh
4. Venezuela
5. Qatar

90. Which of the following is the abbreviated name of the body/agency setup to boost foreign investments in India? [RBI Assistant 2012]

1. FOREX
2. FCCB
3. FIPB
4. FEMA
5. AITAF

91. Which of the following countries is a member of BRICS? [RBI Assistant 2012]

1. Bhutan
2. Iran
3. Romania
4. Sudan
5. South Africa

92. The World Health Organisation (WHO) is a specialised agency of the United Nations (UN) that is concerned with international Public Health. It is headquartered at[IBPS PO 2013]

1. Sweden
2. Switzerland
3. United Kingdom
4. France
5. Germany

93. MEIS and SEIS introduced in the foreign trade policy of [IBPS PO 2013]

1. 1990-95
2. 2000-05
3. 2010-15
4. 2015-20
5. 2016-21

94. Which of the following nations is ‘not’ a member of SAARC? [SBI PO 2014]

1. Nepal
2. Mauritius
3. Bhutan
4. Afghanistan
5. Maldives

95. In Trade Finance, a financial transaction involving the purchase of receivables from exporters by a third party who takes all the risks associated with the receivable is known as [SBI PO 2014]

1. Forfeiting
2. Securitisation
3. Negotiation
4. Factoring
5. Assignment

96. Union Finance Ministry had announced the decision in the Rajya Sabha debate on the Finance Bill to setup former Justice AP Shah chaired a committee on 7th May, 2015.  Shah Committee, to look into the issue of [SBI PO 2015]

1. Minimum Alternate Tax (MAT) on Foreign Institutional Investors (Fils)
2. Trade and Industry
3. Science and Engineering
4. Bank
5. Public Affairs

97. Indian Renewable Energy Development Agency Limited (IREDA) was awarded the Miniratna (Category 1) status by the Department of Public Enterprises under the Union
Ministry of Heavy Industry and Public Enterprises. Eligibility for Miniratna Category-1 PSEs [SBI PO 2015]

I. They should have made profit in the last three years continuously.
II. The pre-tax profit should have been ? 30 crore of more in atleast one of the three years.
III. ₹ 500 million to be invested Code.

Select the correct answer using the codes given below

1. I and II
2. II and III
3. I, II and III
4. I or II
5. None of these

98. Some countries may not worry about an unfavourable balance on current account because [IBPS Clerk 2015]

1. they know they can always borrow to cover the deficit
2. they import capital goods to build up export industries that will eventually, eliminate the deficit. .
3. deficits are always a stimulant to economic growth, which is a higher priority
4. they can if necessary, fix the exchange rate to wipe out the deficit
5. their capital account will be favourable since the balance of payments always ends up at 0

99. The Asian Development Bank (ADB) is a regional development bank established in 1966. It is headquartered in [RBI Grade B 2015]

1. Shanghai (China)
2. Other than those given as options
3. Metro Manila (Philippines)
4. Kathmandu (Nepal)
5. Jakarta (Indonesia)

100. The International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world’s poorest developing countries. It is headquartered in [SBI Clerk 2016]

1. Washington DC, US
2. Vienna, Austria
3. New York, US
4. New Delhi, India
5. Berlin, Germany

101. The headquarters of the ‘United Nations World Trade Organisation’ is situated in [RBI Grade B 2016]

1. Madrid, Spain
2. Switzerland
3. Washington DC, USA
4. Paris, France
5. Frankfurt, Germany

102. The first SAARC Young Parliamentarians Conference (YPC) was recently (August 2016) held in [RBI Grade B 2016]

1. New Delhi, India
2. Thimphu, Bhutan
3. Islamabad, Pakistan
4. Kabul, Afghanistan
5. Kathmandu, Nepal

103. The 42nd G-7 summit in 2016 was held in which country? [RBI Grade B 2016]

1. Japan
2. Canada
3. France
4. Germany
5. India

ANSWERS