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Question No. 74Interactive Test Mode
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Q74. With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1. Quantitative restrictions on imports by foreign investors are prohibited. 2. They apply to investment measures related to trade in both goods and services. 3. They are not concerned with the regulation of foreign investment. Select the correct answer using the code given below:

With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?

  1. Quantitative restrictions on imports by foreign investors are prohibited.
  2. They apply to investment measures related to trade in both goods and services.
  3. They are not concerned with the regulation of foreign investment.

Select the correct answer using the code given below:

Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2020 • Indian Economy

Correct Answer: Option (C) — 1 and 3 only

Concept & Option Breakdown

Standard Reference Verified
  • Statement 1 is correct: TRIMS prohibits trade-distorting investment measures, including local content requirements and quantitative restrictions on imports.
  • Statement 2 is incorrect: TRIMS applies only to investment measures related to trade in goods, not services (trade in services is governed by GATS).
  • Statement 3 is correct: TRIMS deals with the trade-restrictive effects of investment measures, not the entry, ownership, or broad regulation of foreign investments.
Elimination Heuristic & Exam Approach

TRIMS only applies to Goods (Trade in Goods). Services are covered under GATS. Eliminating statement 2 immediately leaves option (c).

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2020 (Q74)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Industry & Infrastructure
Official Answer KeyOption (C) — 1 and 3 only

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Frequently Asked Questions — UPSC Prelims 2020 Q74

What is the official answer for UPSC Prelims 2020 GS Paper I Question 74 (Indian Economy)?

The official UPSC answer key for this 2020 Indian Economy (Industry & Infrastructure) question is Option (C): "1 and 3 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2020 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Industry & Infrastructure". You can explore all repeated questions from Industry & Infrastructure in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Industry & Infrastructure UPSC Prelims question using option elimination?

TRIMS only applies to Goods (Trade in Goods). Services are covered under GATS. Eliminating statement 2 immediately leaves option (c).

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