UPSC General Studies Sample Paper General Studies Sample Paper-3

  • question_answer
    Which of the following is/are the potential consequences of Free Trade Agreement (FTA) between India and ASEAN?
    1. Increased employment opportunities between both.
    2. Violation of WTO global trading norms.
    3. To enhance the investment through Foreign Direct Investment (FDI) from ASEAN into India.
    Select the correct answer using the codes given below.

    A)  1 and 3           

    B)  1 and 2

    C)  2 and 3           

    D)  Only 1

    Correct Answer: A

    Solution :

    [a] Benefits from the FTA can possibly have a positive impact on India's growth rate, help to improve manufacturing sector that can lead to employment creation in both countries. However, a country may enter into a Free Trade Agreement or customs union granting more favourable treatment to the participating states than to the other WTO members, if it observes certain conditions stipulated in the relevant provisions of the WTO agreements, to ensure the complementarity of the FTA with the WTO system.

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