Ministry Of External Affairs
Official policy releases, schemes, circulars, and Prelims practice questions from Ministry Of External Affairs distilled for UPSC Civil Services Examination.
🎯 Ministry Of External Affairs UPSC Practice Questions
🎯 UPSC Prelims Practice Drill
With reference to the macroeconomic trends highlighted in the Reserve Bank of India (RBI) August 2026 Bulletin, consider the following statements: 1. While headline CPI inflation witnessed a fractional rise driven primarily by food inflation, core inflation remained stable. 2. Eased domestic liquidity conditions were accompanied by a rebound in foreign capital inflows, reinforcing the external sector. 3. The domestic economy demonstrated resilience against global headwinds, supported by expanding manufacturing and services activity. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
All three statements are correct based on the RBI August 2026 Bulletin. Statement 1 is correct as headline CPI inflation rose fractionally due to food inflation while core inflation stayed stable. Statement 2 is correct because eased liquidity conditions supported credit growth and investment, while rebounding foreign capital inflows reinforced the external sector. Statement 3 is correct as the domestic economy showed notable resilience to global headwinds, driven by buoyant domestic demand and rising manufacturing and services activity.
🎯 UPSC Prelims Practice Drill
With reference to the special USD-INR Forex Swap facility introduced by the Reserve Bank of India (RBI) in June 2026, consider the following statements: 1. The facility covers foreign currency inflows through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs). 2. The facility has a uniform closing deadline of December 31, 2026, for all eligible categories of inflows. Which of the statements given above is/are correct?
- [A] 1 only
- [B] 2 only
- [C] Both 1 and 2
- [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is correct as the RBI's special USD-INR Forex Swap facility covers FCNR(B) deposits, ECB, and OFCB inflows. Statement 2 is incorrect because the facility does not have a uniform deadline; it was open till August 31, 2026, for FCNR(B) deposits, while it remains open up to December 31, 2026, for ECBs and OFCBs.
Official Policy Notifications & Dossiers
6 Briefs-
THE HINDU
Maturing approach: On the India-U.K. Comprehensive Economic and Trade Agreement - The Hindu
- The India-U.K. Comprehensive Economic and Trade Agreement (CETA) reflects a more mature approach to free trade negotiations, balancing liberalisation with domestic sensitivities in an increasingly fragmented global trading system.
- The pact offers zero-duty access on 99% of India's exports, covering almost the entire value of bilateral trade, but may place competitive pressure on already cost-disadvantaged MSMEs due to stringent U.K. standards.
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THE HINDU
Fuller expression: on India’s inflation - The Hindu
- The Reserve Bank of India retained its neutral monetary policy stance despite India's retail inflation rate reaching a 15-month high of 3.93% in May.
- The country's May food inflation rate rose to 4.78%, with transport inflation increasing by 1.75% and commercial LPG prices surging by over 75% since February.
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INDIAN EXPRESS
Why US has barred foreigners from accessing Anthropic’s Mythos and Fable AI models
- The US government has prohibited foreign nationals from accessing Anthropic's Mythos and Fable AI models over concerns regarding the potential misuse of sensitive technology.
- These restrictions are estimated to impact around 1,000 foreign researchers and scientists who were previously using the AI models for research purposes.
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THE HINDU
RBI Monetary Policy Committee updates: Governor announces host of measures to boost forex inflow and reserves
- The Reserve Bank of India (RBI) Monetary Policy Committee has decided to reduce the policy repo rate by 50 basis points to 4.90 percent, and the reverse repo rate by 40 basis points to 4.10 percent.
- The RBI will purchase government securities worth Rs 1,28,000 crore and will continue to buy bonds of up to Rs 60,000 crore in the second phase of the G-sec acquisition program.
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LIVEMINT
RBI, govt unveil measures to attract foreign inflows in bonds, equities
- The Reserve Bank of India and the government have introduced measures to attract foreign capital into local debt and equity markets.
- These measures are aimed at drawing in an estimated $120 billion in foreign inflows.
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THE HINDU
Bad fences: On Marco Rubio’s India visit - The Hindu
- US Secretary of State Marco Rubio embarked on a four-day visit to India, aiming to smooth bilateral ties strained over the past year due to various issues such as high tariffs, visa restrictions, and sanctions on energy procurement and investment.
- The visit highlighted the complexities in US-India relations, with the US imposing tariffs and visa restrictions, and the US sanctions on India's energy procurement and investment causing significant economic concerns for India.