UPSC Prelims 2023 Q88: Indian Economy – International Trade & WTO
Consider the following statements :
Statement - I :
India accounts for 3.2% of global export of goods.
Statement - II :
Many local companies and some foreign companies operating in India have taken advantage of
India's 'Production - linked Incentive' scheme.
Which one of the following is correct in respect of the above statements?
- (a) Both Statement - I and Statement - II are correct and Statement - II is the correct explanation for Statement - I
- (b) Both Statement - I and Statement - II are correct and Statement - II is not the correct explanation for Statement - I
- (c) Statement - I is correct but Statement - II is incorrect
- (d) Statement - I is incorrect but Statement - II is correct
Answer: (d) Statement - I is incorrect but Statement - II is correct
Explanation
India's share of world goods exports and the PLI scheme
| Indicator | Fact |
|---|---|
| India's share of world merchandise exports | About 1.8% (WTO, 2022) |
| India's share of world services exports | About 4% |
| Target | Raise goods exports to about 3% of world trade |
Statement I — incorrect. India's share of goods exports is about 1.8%, not 3.2%.
Production-Linked Incentive (PLI) scheme:
| Detail | Fact |
|---|---|
| Launched | 2020 |
| Outlay | About ₹1.97 lakh crore across 14 sectors |
| Sectors | Mobile phones, electronics, pharma, autos, solar modules, textiles, food processing and others |
| Beneficiaries | Indian firms and foreign firms (Apple suppliers Foxconn, Pegatron; Samsung) |
Statement II — correct.
Answer: (d) Statement - I is incorrect but Statement - II is correct.
Why each option is right or wrong
- (a) Incorrect. Statement I is false; India's goods-export share is about 1.8%.
- (b) Incorrect. Both are not correct; the 3.2% figure is wrong.
- (c) Incorrect. It reverses the verdicts: Statement II is the true one.
- (d) CORRECT. India's share is about 1.8% (not 3.2%), and many Indian and foreign firms use the PLI scheme.
Key point
India ≈ 1.8% of world goods exports, ≈ 4% of services exports. PLI (2020): 14 sectors, used by Indian and foreign firms.
Remember
India's share of global goods exports is under 2%, and PLI benefits both Indian and foreign firms.
Common mistakes
- Confusing India's share of goods (about 1.8%) with services (about 4%).
- Thinking PLI is only for Indian firms; Foxconn, Samsung and others benefit.
- Overestimating India's export share because its GDP share is higher.
Exam tip
Goods under 2%, services about 4%. Memorise both shares for trade questions.
Sources
- WTO — World Trade Statistical Review
- Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry — Production Linked Incentive (PLI) schemes
- Economic Survey 2022–23 — External sector