External Sector of India: UPSC Previous Year Questions (Indian Economy)
2 previous year UPSC Prelims questions on External Sector of India (Indian Economy). Choose an option to see the answer and explanation.
Explanations state facts as of the year each question was asked; words like “recently” refer to that year.
Showing 1–2 of 2 questions
UPSC 1999Indian Economy · External Sector of India
Q1. Assertion (A): Information technology is fast becoming a very important field of activity in India. Reason (R): Software is one of the major exports of the coun-try and India has a very strong base in hardware.
Explanation
Assertion (A) is true: Information technology (IT) has become a key sector in India’s economy, contributing significantly to GDP, exports, and employment. The growth of IT services, software development, and business process outsourcing (BPO) has positioned India as a global leader in the industry. Government initiatives, a large English-speaking work-force, and cost advantages have further boosted IT expansion. Reason (R) is false: While software exports are indeed a major component of India’s IT sector, the country has not traditionally had a strong base in hardware manufacturing. Unlike software, which flourished due to outsourcing, India’s hardware sector has remained underdeveloped due to import dependency, lack of infrastructure, and high production costs. Only in recent years have initiatives like "Make in India" and the Production Linked Incentive (PLI) scheme sought to strengthen domestic hardware manufacturing.
UPSC 1999Indian Economy · External Sector of India
Q2. Assertion (A): Devaluation of a currency may promote export. Reason (R): Price of the country’s products in the international market may fall due to devaluation.
Explanation
Assertion (A) is true: Devaluation reduces the value of a country’s currency relative to foreign currencies, making its exports cheaper and more competitive in the global market. This can lead to an increase in the demand for exports. Reason (R) is true: As the local currency weakens against foreign currencies, goods from the devaluing country become cheaper for foreign buyers. This effectively reduces the inter-national price of these goods, resulting in increased demand for exports. For instance, after India’s 1991 devaluation, exports surged as Indian goods became more competitive globally. The Economic Survey (1991-92) confirmed that devaluation played a crucial role in boosting exports and improving India’s trade balance. Thus, Reason R correctly explains Assertion A.
Answer key for these questions
Q
UPSC year
Correct answer
1
1999
(c) A is true but R is false
2
1999
(a) Both A and R are true and R is the correct explanation of A
Frequently asked questions
How many previous year UPSC questions are there on External Sector of India?
This page covers 2 previous year UPSC Prelims GS Paper-I questions on External Sector of India (Indian Economy), asked from 1996 to 2025. Each has the correct answer and an explanation.
How should I use previous year UPSC questions for Prelims?
Attempt each question first, then open the answer and read the explanation for every option. Repeat by chapter, and track which statements UPSC reuses across years. Previous year questions show the exam pattern and difficulty level.
Which years are covered for External Sector of India?
Questions on External Sector of India (Indian Economy) are available for 22 years, from 1996 to 2025. Use the Year filter to practise a single paper.
