India has witnessed a notable relief for rupee after India excluded from US tariff hike, a major development in international trade. On July 13, 2025, the United States announced new tariffs targeting key exports from several countries, but India was exempted from the hike. This decision is seen as a boost for Indian exporters and has strengthened the rupee temporarily against the US dollar.
Let’s break down this significant event and follow it with 50+ MCQs for your competitive exam prep.
📌 Why Did the US Impose New Tariffs in July 2025?
Reason: To counter alleged unfair trade practices and protect US manufacturing.
Targets: Countries like China, Vietnam, Bangladesh, and Mexico were affected.
Sectors hit: Steel, electronics, textiles, and EV components.
🇮🇳 Why Was India Excluded?
Improved Bilateral Relations: India and the US have strengthened ties in defense and technology.
Strategic Trade Partner: India has become a reliable alternative to China.
Economic Reforms: India’s tariff transparency and WTO compliance were cited.
💱 Impact on Indian Economy
| Factor | Impact |
|---|---|
| Export sector | Boost for textile, electronics, auto parts exports |
| Foreign Exchange Market | Rupee gained value against the US dollar |
| Stock Market | Positive investor sentiment |
| Trade Deficit | Expected to narrow due to better export earnings |
📈 Rupee Exchange Rate Movement
Before exclusion: ₹83.25/USD
After exclusion: ₹82.70/USD
Reason: Confidence in India’s global trade standing
🧠 50+ MCQs on “Relief for Rupee After India Excluded from US Tariff Hike”
1. Which country recently excluded India from a major tariff hike in July 2025?
A. China
B. USA
C. UK
D. Germany
✅ Answer: B. USA
👉 India was exempted from new US tariffs aimed at other exporting nations.
2. What was the main benefit for India after being excluded from US tariffs?
A. Better relations with China
B. Relief for rupee
C. Increase in oil imports
D. Decline in inflation
✅ Answer: B. Relief for rupee
👉 The rupee appreciated due to better trade outlook.
3. What was the approximate exchange rate of the rupee after India’s exclusion?
A. ₹84.10/USD
B. ₹83.80/USD
C. ₹82.70/USD
D. ₹85.00/USD
✅ Answer: C. ₹82.70/USD
4. Which of the following sectors is likely to benefit the most?
A. Oil Refining
B. Electronics & Textiles
C. Real Estate
D. Banking
✅ Answer: B. Electronics & Textiles
5. What is the term for a country’s official policy to increase tariffs on imports?
A. Globalization
B. Protectionism
C. Liberalization
D. Nationalization
✅ Answer: B. Protectionism
6. What does a strong rupee indicate?
A. India is importing more
B. Rupee is losing value
C. Indian currency is gaining against dollar
D. RBI is increasing interest rates
✅ Answer: C. Indian currency is gaining against dollar
7. Which institution manages India’s foreign exchange reserves?
A. Ministry of Finance
B. SEBI
C. RBI
D. IMF
✅ Answer: C. RBI
8. What is the main export destination for Indian textiles?
A. UAE
B. China
C. United States
D. South Korea
✅ Answer: C. United States
9. What is the name of the major India-US trade forum?
A. QUAD Council
B. Indo-Pacific Pact
C. TPF (Trade Policy Forum)
D. US-Asia Alliance
✅ Answer: C. TPF (Trade Policy Forum)
10. Which Indian leader recently met US Trade Representative Katherine Tai?
A. S. Jaishankar
B. Nirmala Sitharaman
C. Piyush Goyal
D. Narendra Modi
✅ Answer: C. Piyush Goyal
11. What is India’s largest export item to the US?
A. IT services
B. Oil
C. Gems & Jewelry
D. Pharmaceuticals
✅ Answer: C. Gems & Jewelry
12. Which Indian city hosts the NSE (National Stock Exchange)?
A. New Delhi
B. Hyderabad
C. Bengaluru
D. Mumbai
✅ Answer: D. Mumbai
13. What is the full form of WTO?
A. World Tariff Organization
B. World Trade Order
C. World Trade Organization
D. World Treaty Organization
✅ Answer: C. World Trade Organization
14. Excluding India from tariff hikes shows a shift in which policy?
A. Non-Aligned Movement
B. US Strategic Pivot
C. Indo-Pacific Engagement
D. Dollarization
✅ Answer: C. Indo-Pacific Engagement
15. A country’s trade balance is calculated by—
A. Imports – GDP
B. Exports – Imports
C. Imports + Exports
D. GDP – GNP
✅ Answer: B. Exports – Imports
16. What would happen if India had been included in US tariff hikes?
A. Rupee would appreciate
B. Exports would increase
C. Exporters face losses
D. Inflation would drop
✅ Answer: C. Exporters face losses
17. Which financial term best explains the rupee’s gain after the announcement?
A. Recession
B. Capital flight
C. Investor sentiment
D. Currency hedging
✅ Answer: C. Investor sentiment
18. Which index best reflects the performance of India’s top 50 companies?
A. Sensex
B. Nifty 50
C. BSE Midcap
D. NSE 200
✅ Answer: B. Nifty 50
👉 Nifty 50 tracks the performance of 50 major companies on the NSE.
19. When the rupee strengthens, what becomes cheaper for Indian consumers?
A. Exports
B. Imports
C. Taxes
D. Domestic loans
✅ Answer: B. Imports
👉 A stronger rupee means India pays less for imported goods.
20. What is the term for the price at which one currency can be exchanged for another?
A. Repo rate
B. Exchange rate
C. Export duty
D. Forex buffer
✅ Answer: B. Exchange rate
21. What is the full form of FOREX?
A. Foreign Region Exchange
B. Financial Order Exchange
C. Foreign Exchange
D. Forward Rate Exchange
✅ Answer: C. Foreign Exchange
22. As of 2025, which country is India’s largest trading partner?
A. China
B. UAE
C. USA
D. Russia
✅ Answer: C. USA
23. What was the India–US bilateral trade volume in 2024? (approx)
A. $50 billion
B. $78 billion
C. $118 billion
D. $150 billion
✅ Answer: C. $118 billion
👉 India and the US have seen record trade in recent years.
24. Which Indian export product to the US saw the highest growth in 2023–24?
A. Crude oil
B. Textiles
C. Processed foods
D. Auto parts
✅ Answer: D. Auto parts
25. What is a ‘tariff’?
A. A tax on imports or exports
B. A stock price limit
C. A bank loan type
D. A type of GST
✅ Answer: A. A tax on imports or exports
26. What happens to the demand for goods if tariffs increase?
A. Demand rises sharply
B. Demand remains constant
C. Demand drops
D. Supply increases
✅ Answer: C. Demand drops
👉 Higher tariffs usually reduce consumption of imported goods.
27. What is the objective of a Free Trade Agreement (FTA)?
A. To restrict imports
B. To allow unrestricted travel
C. To increase tariffs
D. To reduce trade barriers
✅ Answer: D. To reduce trade barriers
28. Which international body resolves trade disputes among nations?
A. IMF
B. WTO
C. World Bank
D. OECD
✅ Answer: B. WTO
29. India is part of which regional economic grouping?
A. EU
B. NAFTA
C. BRICS
D. ASEAN
✅ Answer: C. BRICS
30. What was the primary goal of the US tariff hike in 2025?
A. Promote Indian trade
B. Punish China’s currency policy
C. Protect domestic manufacturers
D. Increase oil prices
✅ Answer: C. Protect domestic manufacturers
31. Who is responsible for maintaining India’s currency stability?
A. SEBI
B. Finance Ministry
C. RBI
D. Supreme Court
✅ Answer: C. RBI
32. What is the term for RBI’s tool to control liquidity using interest rates?
A. Fiscal policy
B. Monetary policy
C. Trade policy
D. Capital budget
✅ Answer: B. Monetary policy
33. What is the benchmark interest rate set by RBI called?
A. SLR
B. Repo Rate
C. Tariff Rate
D. Tax Rate
✅ Answer: B. Repo Rate
34. Which of the following best describes India’s exclusion from the tariff list?
A. Geopolitical retaliation
B. Strategic alignment
C. Arbitrary exception
D. WTO dispute
✅ Answer: B. Strategic alignment
35. Which consequence is least likely after India’s exclusion?
A. Surge in exports
B. Drop in rupee value
C. Growth in textile sector
D. Trade surplus improvement
✅ Answer: B. Drop in rupee value
36. Which of these Indian agencies promotes international trade?
A. TRAI
B. NITI Aayog
C. DGFT
D. IRDAI
✅ Answer: C. DGFT (Directorate General of Foreign Trade)
37. Which US department handles tariff and trade enforcement?
A. US Commerce Department
B. US State Department
C. Federal Reserve
D. Homeland Security
✅ Answer: A. US Commerce Department
38. Which of the following sectors is directly impacted by tariff hikes?
A. Education
B. Agriculture
C. Manufacturing
D. Tourism
✅ Answer: C. Manufacturing
👉 Tariff hikes increase costs on imported manufactured goods.
39. The appreciation of the rupee means which of the following?
A. Rupee buys more dollars
B. Dollar buys more rupees
C. RBI increases inflation
D. GDP shrinks
✅ Answer: A. Rupee buys more dollars
👉 A stronger rupee can buy more foreign currency.
40. A stronger rupee makes which of these cheaper for Indian companies?
A. Domestic salaries
B. Imported raw materials
C. GST payments
D. Local logistics
✅ Answer: B. Imported raw materials
41. Tariff is a tool of which economic policy?
A. Monetary policy
B. Fiscal policy
C. Trade policy
D. Internal revenue policy
✅ Answer: C. Trade policy
42. The United States imposed tariff hikes in July 2025 mainly to—
A. Increase imports
B. Raise government revenue
C. Protect domestic jobs
D. Promote tourism
✅ Answer: C. Protect domestic jobs
43. Which Indian ministry handles foreign trade matters?
A. Ministry of Commerce and Industry
B. Ministry of External Affairs
C. Ministry of Finance
D. Ministry of Home Affairs
✅ Answer: A. Ministry of Commerce and Industry
44. The Indian rupee gained strength after the tariff announcement because—
A. RBI reduced repo rate
B. India received more FDI
C. India was excluded from US tariffs
D. Gold imports increased
✅ Answer: C. India was excluded from US tariffs
45. What impact does rupee appreciation usually have on exports?
A. Boosts exports
B. Makes exports costlier
C. No effect
D. Lowers GDP
✅ Answer: B. Makes exports costlier
👉 A stronger rupee can make Indian goods more expensive globally.
46. What does the acronym ‘FTA’ stand for in international trade?
A. Financial Tariff Act
B. Free Tariff Agreement
C. Free Trade Agreement
D. Federal Trade Alliance
✅ Answer: C. Free Trade Agreement
47. Which of these countries faced US tariffs in July 2025?
A. South Korea
B. Bangladesh
C. Australia
D. UAE
✅ Answer: B. Bangladesh
48. Which of these trade organizations is India a member of?
A. NAFTA
B. ASEAN
C. WTO
D. OPEC
✅ Answer: C. WTO
49. Which is a direct benefit of India being excluded from tariff hikes?
A. Rupee depreciation
B. Higher export competitiveness
C. Increased import bills
D. Fuel price surge
✅ Answer: B. Higher export competitiveness
50. What is the major concern for countries included in tariff hikes?
A. Falling export prices
B. Surplus balance of payments
C. Job losses and export decline
D. Increase in gold reserves
✅ Answer: C. Job losses and export decline
51. A sudden tariff announcement can lead to—
A. Market stability
B. Investor confidence rise
C. Currency depreciation (for affected countries)
D. Oil price drop
✅ Answer: C. Currency depreciation (for affected countries)
52. What role does WTO play in trade tariffs?
A. Imposes tariffs
B. Abolishes all tariffs
C. Resolves disputes and sets rules
D. Provides loans
✅ Answer: C. Resolves disputes and sets rules
53. Which Indian sector is NOT likely to be directly impacted by US tariffs?
A. Textiles
B. Electronics
C. Banking
D. Auto components
✅ Answer: C. Banking
54. What is the main aim of India-US strategic partnership?
A. Promote oil exports
B. Military occupation
C. Economic, defense, and technology cooperation
D. Tourism and films
✅ Answer: C. Economic, defense, and technology cooperation
55. The rupee–dollar exchange rate is influenced by all except—
A. RBI intervention
B. International trade balance
C. Cricket World Cup results
D. FII/FDI flow
✅ Answer: C. Cricket World Cup results
56. If US tariffs increase on China, and India is excluded, what happens to India’s exports?
A. Decline sharply
B. Stay unaffected
C. Gain competitive advantage
D. Get taxed more
✅ Answer: C. Gain competitive advantage
57. Which rating agency assesses India’s credit worthiness?
A. SEBI
B. S&P
C. DGFT
D. IRDA
✅ Answer: B. S&P
58. India’s foreign trade policy is released by which department?
A. Ministry of Home Affairs
B. RBI
C. Directorate General of Foreign Trade (DGFT)
D. SEBI
✅ Answer: C. DGFT
59. Which of the following would weaken the rupee against the dollar?
A. Rise in Indian exports
B. Rise in US interest rates
C. Stable inflation in India
D. High FDI inflow
✅ Answer: B. Rise in US interest rates
60. Which institution acts as India’s central monetary authority?
A. SBI
B. NABARD
C. Ministry of Finance
D. RBI
✅ Answer: D. RBI
✅ Key Takeaways:
The relief for rupee after India excluded from US tariff hike shows a growing alignment between India and the U.S. on economic and strategic fronts.
Sectors like textiles, auto parts, and electronics are expected to gain the most from this relief for rupee after India excluded from US tariff hike, as their export competitiveness improves.
Relief for rupee after India excluded from US tariff hike the Indian rupee appreciated significantly in the forex market, driven by positive sentiment and increased global confidence in India’s economy.
The decision led to a temporary surge in investor confidence, especially in export-oriented stocks, reflecting the impact of the relief for rupee after India excluded from US tariff hike.
Relief for rupee after India excluded from US tariff hike India’s exclusion demonstrates its rising stature in global trade diplomacy and signals future possibilities of favorable Free Trade Agreements (FTAs) with Western economies.
The relief for rupee after India excluded from US tariff hike is a short-term currency gain, but its long-term benefit will depend on how effectively Indian exporters capitalize on this opportunity.
For competitive exam aspirants, understanding the causes and implications of this relief for rupee after India excluded from US tariff hike is crucial for answering questions in both the current affairs and economy sections.
The relief for rupee after India excluded from US tariff hike marks a pivotal moment in India’s trade and currency stability. In a global environment where protectionism is rising, India’s strategic exemption by the United States sends a strong signal of trust and growing bilateral alignment. This move not only cushioned the rupee but also bolstered confidence among exporters, investors, and policymakers.
By gaining this relief for rupee after India excluded from US tariff hike, India now holds a competitive edge over nations burdened by new U.S. import taxes. The appreciation of the rupee, improved trade outlook, and sector-specific gains indicate that India is increasingly seen as a reliable trade partner.
However, this development also presents a test — to convert this relief for rupee after India excluded from US tariff hike into lasting economic advantage through better export performance, trade diversification, and currency management.
As the global trade landscape continues to shift, the relief for rupee after India excluded from US tariff hike should be viewed as both a win and a warning — a reminder that India’s role in global supply chains must be actively cultivated.
In summary, the relief for rupee after India excluded from US tariff hike is a short-term boost with long-term strategic potential, making it a crucial current affairs topic for every competitive exam aspirant.
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