UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today’s subject quiz on the Economy to check your progress.Gear up for UPSC Prelims 2026—Practice smarter, revise faster, and succeed with our Special Quiz Magazine. (Click Here)With reference to the India-New Zealand trade, consider the following statements:1. India’s free trade agreement (FTA) with New Zealand provides duty-free access for 100% of India’s exports to New Zealand.2. In FY26, India’s exports to New Zealand were mainly scrap metals, coal and farm-linked inputs.3. New Zealand is the “first country to secure preferential access for apples” in any Indian FTA.How many of the statements given above are correct?(a) Only one(b) Only two(c) All three(d) NoneRelevance: The question tests understanding of India’s evolving Free Trade Agreement (FTA) strategy and its shift towards comprehensive economic partnerships. It reflects the growing importance of Indo-Pacific economic relations, especially with developed partners like New Zealand, relevant for current affairs.ExplanationStory continues below this ad— India signed a free trade agreement (FTA) with New Zealand, securing full tariff elimination on all Indian exports to New Zealand, while reducing tariffs on 95% of New Zealand’s imports into India. As per the agreement, Wellington has also “committed” to invest $20 billion in India over the next 15 years.— Prime Minister Narendra Modi said on X that the FTA will benefit Indian farmers, youth, women, MSMEs, artisans, startups, students and innovators. “The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology,” he said. Speaking on the signing, Commerce and Industry Piyush Goyal said the investment commitment from New Zealand signals strong confidence in India’s growth story.— The Commerce Ministry said India has offered tariff liberalisation on 70.03% of tariff lines covering 95% of bilateral trade value, while keeping 29.97% of tariff lines excluded to protect India’s sensitive sectors. It said the FTA provides duty-free access for 100% of India’s exports to New Zealand, covering all tariff lines. Hence, statement 1 is correct.— In FY26, India’s exports to New Zealand stood at $711 million, largely comprising aviation fuel, textiles, pharma and machinery. Imports included raw materials, scrap metals, coal and farm-linked inputs totalling $587 million. Hence, statement 2 is not correct.Therefore, option (b) is the correct answer.QUESTION 2With reference to the additional factor of authentication (AFA), consider the following statements:1. The recent RBI guidelines on recurring e-mandate transactions allowed payments of up to Rs 50,000 per transaction without AFA.2. For insurance premiums, mutual fund subscriptions and credit card bill payments, the amount that can be processed without AFA is up to Rs 1 lakh per transaction.Which of the statements given above is/are correct?(a) 1 only(b) 2 only(c) Both 1 and 2(d) Neither 1 nor 2Story continues below this adRelevance: The question tests awareness of digital payment regulations and consumer protection measures issued by the Reserve Bank of India. It is important for understanding financial sector reforms and digital economy governance in India. Aspirants should keep a track of RBI guidelines and RBI’s initiatives.Explanation— The Reserve Bank of India (RBI) has revised guidelines for recurring e-mandate transactions, allowing payments of up to Rs 15,000 per transaction without additional factor of authentication (AFA). Transactions above this limit will continue to require AFA. Hence, statement 1 is not correct.— In a major relief, the central bank said insurance premiums, mutual fund subscriptions and credit card bill payments can be processed without AFA for amounts up to Rs 1 lakh per transaction. Hence, statement 2 is correct.— According to the central bank’s Digital Payments – E-mandate Framework, 2026, every e-mandate registered by an issuer must clearly specify its validity period. Customers will have the flexibility to modify or withdraw them at any time, with issuers required to communicate these options clearly at the time of registration.Story continues below this ad— The framework allows e-mandates to be set for either fixed or variable amounts, subject to caps prescribed by the RBI. For variable mandates, customers must be given the option to define a maximum transaction limit. Additionally, users can select or change their preferred mode — such as SMS or email — for receiving pre-transaction alerts, it said.Therefore, option (b) is the correct answer.To read more: Reserve Bank of India revises e-mandate norms; Rs 15,000 cap without additional factor of authenticationQUESTION 3For India, what is/are the impacts of using local currencies for cross-border transactions?1. Increase in outflow of foreign currency2. Stability of rupee3. Higher exposure to exchange rate volatilitySelect the correct answer using the codes given below:(a) 1 and 2 only(b) 2 only(c) 3 only(d) 1 and 3 onlyRelevance: It is important for linking the external sector, exchange rate management, and trade policy. Aspirants should read about India’s push towards de-dollarisation and local currency trade mechanisms.ExplanationStory continues below this ad— In 2023 and 2024, the RBI signed agreements with UAE, Indonesia and Maldives to establish a framework to promote the use of their local currencies for cross-border transactions. This is in addition to India’s long-standing rupee arrangements with Bhutan and Nepal, while Sri Lanka in August 2022 added the rupee to its list of “designated foreign currencies”.— As a net buyer of goods and services from abroad, India’s import bill is often at the mercy of the rupee’s performance — if it weakens, it would lead to more money being paid by importers for a fixed dollar amount. In 2025-26, India had a trade deficit of $119 billion. As such, paying for imports in rupees can reduce the outflow of foreign currency and ease the pressure on the exchange rate. This makes rupee trade settlement a more potent tool to stabilise the rupee than the RBI’s recent forex market measures — including a cap of $100 million on banks’ net open rupee positions as against a more liberal limit of 25% of their capital — that were not received well. A senior economist told The Indian Express that the anti-speculation measure was a “backslide” and akin to “putting back reforms”.Therefore, option (b) is the correct answer.QUESTION 4The ‘Prediction markets’ refers to:(a) platforms where users trade contracts tied to the outcome of real-world eventsStory continues below this ad(b) government-run systems that officially announce future economic and political outcomes(c) digital platforms that store historical data to analyse past events and trends(d) markets where companies sell insurance policies to hedge against future uncertaintiesRelevance: The topic tests understanding of emerging financial instruments and market-based forecasting mechanisms, increasingly discussed in economic policy debates. UPSC can link a question with current affairs focussing on concepts of efficient markets and information aggregation in the economy.ExplanationStory continues below this ad— The Ministry of Electronics and IT (MeitY) in an advisory has directed virtual private network (VPN) providers to ensure that their platforms are not used to access banned online betting and prediction market platforms such as Polymarket. The directive comes as prediction market sites are finding traction among Indian users, despite the online gaming Act prohibitively placing a ban on such services.— Prediction markets are platforms where users trade contracts tied to the outcome of real-world events, ranging from elections and policy decisions to commodity prices and even geopolitical developments. Prices on these platforms fluctuate based on demand, effectively reflecting the crowd’s collective assessment of the probability of an event occurring. Unlike traditional betting, they are often framed as information markets, valued for their ability to aggregate dispersed knowledge into a single, dynamic signal. Leading players include Polymarket, which focuses heavily on political and global events, Kalshi, and PredictIt, which is widely used for forecasting elections.Therefore, option (a) is the correct answer.QUESTION 5Which of the following crops is increasingly susceptible to infestation by Orobanche aegyptiaca (parasitic weed)?(a) Wheat(b) Sugarcane(c) Rice(d) MustardRelevance: The topic tests awareness of agricultural pests and parasitic weeds, which UPSC usually asks in prelims under the Agriculture and Economy. It also links static concepts (crop types, plant interactions) with current issues in crop productivity and food security.Explanation— The mustard is also a crop increasingly susceptible to infestation by Orobanche aegyptiaca.— The “hidden” threat is due to the weed’s underground location and its establishing connection with the host plant’s roots to steal nutrients and water. By the time the parasite’s shoots appear above the ground and become visible, the damage to the crop from diversion and undernourishment would have already occurred.Therefore, option (d) is the correct answer. Click Here to read the UPSC Essentials magazine for April 2026. Share your views and suggestions in the comment box or at manas.srivastava@indianexpress.comPrevious Daily Subject-Wise-QuizDaily Subject-wise quiz — History, Culture, and Social Issues (Week 155)Daily subject-wise quiz — Polity and Governance (Week 160)Daily subject-wise quiz — Science and Technology (Week 160)Daily subject-wise quiz — Economy (Week 159)Daily subject-wise quiz — Environment and Geography (Week 159)Daily subject-wise quiz – International Relations (Week 159)Subscribe to our UPSC newsletter and stay updated with the news cues from the past week.Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.