Protectionism and Trade Wars
Indian Economy
- PYQs8
- Articles1
Background
Crucial for understanding global economic dynamics, international relations, and the impact on India's trade policy, exports, and domestic industries. Relevant for GS2 (International Relations) and GS3 (Indian Economy).
Protectionism refers to government policies that restrict international trade to help domestic industries, often through tariffs, import quotas, or subsidies. Trade wars occur when countries impose such barriers in response to similar actions by their trading partners, leading to a cycle of escalation that can disrupt global supply chains and economic stability.
Facts & tables
- Key Instruments
- Tariffs (taxes on imports), import quotas, subsidies, and non-tariff barriers.
- Common Justifications
- National security, protection of infant industries, addressing unfair trade practices (e.g., forced labor), or domestic job protection.
- Consequences
- Can lead to retaliatory measures, higher consumer prices, reduced global trade volumes, and diplomatic tensions.
- Economic Impact
- Disrupts global supply chains, affects export-oriented industries, and can slow global economic growth.
| Type | Reference |
|---|---|
| Conceptual area | International Relations |
Prelims angle
Prelims angle: Factual recall
Prelims angle: Terminology-based question
- Protectionism uses tariffs, quotas to shield domestic industries.
- Trade wars involve retaliatory trade barriers.
- Motives: national security, unfair trade, domestic job protection.
- Consequences: higher prices, reduced trade, global economic instability.
- Impacts global supply chains and international relations.
| Year | Framing tags |
|---|---|
| 2026 | Cause and effect relationships, Multi-statement analysis |
| 2025 | Statement-based questions, Factual recall |
| 2023 | Multi-statement analysis, Factual recall |
| 2018 | Factual recall, Cause and effect relationships |
| 2017 | Factual recall, Terminology-based question |
| 2017 | Multi-statement analysis, Factual recall |
| 2016 | Multi-statement analysis, Conceptual understanding |
| 2016 | Statement-based questions, Factual recall |
Timeline
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International Relations
Conceptual area
-
Prelims 2016
Multi-statement analysis, Conceptual understanding
-
Prelims 2016
Statement-based questions, Factual recall
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2018
Factual recall, Cause and effect relationships
-
Prelims 2023
Multi-statement analysis, Factual recall
-
Prelims 2025
Statement-based questions, Factual recall
-
Prelims 2026
Cause and effect relationships, Multi-statement analysis
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U.S. readies new tariffs as Trump's 10% global levy to expire
Protectionism involves trade barriers to protect domestic industries, often leading to trade wars with retaliatory measures, impacting global economy and relations.
See also
Past papers
2016–2026 · 4 questions
In the news
U.S. readies new tariffs as Trump's 10% global levy to expire
Protectionism involves trade barriers to protect domestic industries, often leading to trade wars with retaliatory measures, impacting global economy and relations.
Try these PYQs
Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and
The Broad-based Trade and Investment Agreement (BTIA) is negotiated between India and the European Union (EU).
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. Statement 1 is correct. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. This signifies India's official acceptance and implementation of the agreement's provisions. Statement 2 is correct. The TFA is indeed a part of the WTO's Bali Ministerial Package of 2013. This package refers to a collection of agreements reached during the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia. The TFA was a landmark achievement within this package. Statement 3 is incorrect. The Trade Facilitation Agreement (TFA) came into force in February 2017, not January 2016. It required ratification by two-thirds of WTO members before taking effect.
Which of the following is/are the most significant implication(s) of obtaining Oeko-Tex certification for Eri Silk in the global textile industry?
1. It allows Indian exporters to compete in high-end markets that prioritise chemical-free products.
2. It confirms that Eri Silk meets international safety, environmental, and quality standards, enabling its entry into premium eco-conscious markets.
Select the answer using the code given below:
Statement 1 is Correct: The OEKO-TEX certification ensures that textiles are rigorously tested and proven free from harmful substances, heavy metals, and toxic chemicals. This certification acts as a major endorsement, directly enhancing the global marketability of Eri Silk and allowing Indian exporters to confidently compete in high-end international markets that prioritize sustainable, chemical-free, and ethically produced textiles. Statement 2 is Correct: The certification confirms that a textile meets strict international safety, environmental, and human health standards. This is highly valued by buyers in premium, eco-conscious global markets, particularly in Europe and North America. Combined with its Geographical Indication (GI) status and reputation as a cruelty-free "peace silk," the certification cements Eri Silk's position as a premium eco-friendly fabric, enabling its entry into these premium markets. Therefore, both statements are correct, making the correct option C.
With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:
1. IMFC discusses matters of concern affecting the global economy and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as an observer in IMFC’s meetings.
Which of the statements given above is/are correct?
Statement 1 is Correct: The International Monetary and Financial Committee (IMFC) serves as a vital forum for discussing global economic issues and providing guidance to the International Monetary Fund (IMF). It brings together finance ministers, central bank governors, and other high-level officials from member countries to discuss challenges and opportunities facing the global economy. They also advise the IMF on its policy direction and work program. Statement 2 is Correct: The World Bank, while a separate institution, collaborates closely with the IMF. While not a formal member of the IMFC, the World Bank typically participates as an observer in IMFC meetings. This allows for better coordination and exchange of information between the two institutions on matters of mutual interest, such as global economic stability and development. Hence, option C is the correct answer.
With reference to the ‘Trans-Pacific Partnership’, consider the following statements:
1. It is an agreement among all the Pacific Rim countries except China and Russia.
2. It is a strategic alliance for the purpose of maritime security only.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: While China and Russia were not part of the TPP negotiations, it wasn't solely focused on Pacific Rim countries. Other economies like Vietnam and Singapore were part of the TPP despite not exactly being on the Pacific Rim. Statement 2 is Incorrect: The TPP was a proposed trade agreement, not a strategic alliance for maritime security. It aimed to reduce trade barriers and promote economic integration among member countries. The TPP negotiations were concluded in 2015, but the agreement was never ratified by all the signatories. The United States withdrew from the TPP in 2017, effectively ending the initiative in its original form. However, some member countries pursued alternative trade agreements based on the TPP framework. Hence, option D is the correct answer.
Show 3 more PYQs
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?
* Statement I is incorrect: India's share in global merchandise trade is only 1.8% and 4% in global services. India plans to increase its export share in global trade from 2.1% to 3% by 2027 and 10% by 2047. * Statement II is correct: The PLI scheme is open to both domestic and international manufacturers. Samsung as well as Indian firms such as Dixon Technologies, UTL, Neolyncs, Lava International, Optiemus Electronics and Micromax are also expanding their factories to take advantage of the PLI scheme.
Consider the following statements:
I. India has joined the Minerals Security Partnership as a member.
II. India is a resource-rich country in all the 30 critical minerals that it has identified.
III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.
Which of the statements given above are correct?
Critical minerals are essential for modern technologies and clean energy, but many countries, including India, depend on imports for several of them. To strengthen supply chains, India has joined international partnerships and reformed mining laws. ✅ Statement I: Correct India joined the Minerals Security Partnership (MSP) in 2023 to ensure reliable access to critical minerals. ❌ Statement II: Incorrect India is not resource-rich in all 30 critical minerals it has identified and remains import-dependent for several, like cobalt and nickel. ✅ Statement III: Correct In 2023, Parliament amended the Mines and Minerals Act, giving the Central Government power to auction leases for critical minerals.
India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to
The World Trade Organization (WTO) has an agreement called the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS requires member countries to protect Geographical Indications (GIs). GIs identify a product as originating from a specific geographical location where its qualities or reputation are essentially due to that origin. India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 to comply with its obligations under the TRIPS agreement of the WTO.