Question map
Consider the following statements : 1. The value of Indo-Sri Lanka trade has consistently increased in the last decade. 2. "Textile and textile articles" constitute an important item of trade between India and Bangladesh. 3. In the last five years, Nepal has been the largest trading partner of India in South Asia. Which of the statements given above is/are correct ?
Explanation
The correct answer is Option 2. The explanation for each statement is as follows:
- Statement 1 is incorrect: The value of Indo-Sri Lanka trade has been fluctuating rather than showing a "consistent" increase over the last decade. Factors such as Sri Lanka’s economic crisis, foreign exchange shortages, and shifting demand patterns led to declines in specific years (e.g., 2012-13, 2015-16, and 2019-20).
- Statement 2 is correct: India and Bangladesh share a robust trade relationship in the textile sector. Bangladesh is a global hub for garment manufacturing and relies heavily on India for raw materials like cotton, yarn, and fabric. Reciprocally, textile articles are a major export from Bangladesh to India.
- Statement 3 is incorrect: In the last five years, Bangladesh, not Nepal, has consistently been India's largest trading partner in South Asia, followed by Sri Lanka or Nepal depending on the fiscal year.
Therefore, only statement 2 accurately reflects the trade dynamics of the region.
PROVENANCE & STUDY PATTERN
Full viewThis is a classic 'Economic Survey' trend question disguised as a static geography question. You don't need 10 years of data; you need to spot the 'extreme modifier' trap ('consistently') and know the basic hierarchy of India's neighbors (Bangladesh > Sri Lanka/Nepal in economic size).
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Did the value of India–Sri Lanka (Indo–Sri Lanka) bilateral trade increase year-on-year in every year during 2010–2019?
- Statement 2: Are "textile and textile articles" among the top traded commodity categories in India–Bangladesh bilateral trade in recent years (e.g., 2015–2019)?
- Statement 3: Was Nepal the largest trading partner of India among South Asian countries during 2015–2019?
Notes that India has a bilateral Free Trade Agreement with Sri Lanka, a policy instrument that typically encourages higher bilateral trade flows.
A student could infer the FTA likely supported trade growth and then check year-by-year trade statistics (2010–2019) to see if growth was uninterrupted.
States explicitly that India signed a free trade agreement with Sri Lanka and that such agreements strengthen relations and post-disaster aid has boosted ties—providing an explanatory link for potential trade increases.
Use this as a hypothesis that trade should trend upward post-FTA, then compare annual bilateral trade values (e.g., from customs or UN COMTRADE) for 2010–2019 to test for any year-on-year declines.
Describes India's total external trade as having 'continuous increase with occasional downturns', indicating that even when overall trade trends upward, some years may show declines.
Apply this general rule to bilateral trade: a student should not assume monotonic yearly growth and should check each year's bilateral data for downturns within 2010–2019.
Provides a concrete example (India–China bilateral trade) of large multi-year increases but over long periods, not asserting uninterrupted year-on-year growth, illustrating that growth can be uneven.
Use this comparative example to caution that large decadal rises don't guarantee no single-year declines; verify Indo–Sri Lanka annual series for gaps in growth.
Mentions a 2019 trilateral agreement to develop Colombo Port infrastructure, showing that infrastructure and agreements can change trade capacity in specific years (affecting annual flows).
A student could consider such 2019 developments as potential reasons for a jump or recovery in trade that year, then inspect annual data around 2018–2019 to see impacts.
Table shows 'Textile including RMG' accounted for 14.5% of India's exports in 2016–17, indicating textiles are a major export category nationally.
A student could combine this national export-weight with geographic and trade-data knowledge (neighbouring Bangladesh's large garment sector and bilateral trade flows) to assess whether textiles likely appear among top bilateral categories.
Textile sector is described as one of India's largest sectors (20% of export earnings, significant industrial output and employment for 2015–16).
Use this broad importance of textiles to hypothesise that textiles would feature prominently in trade with a nearby major textile market like Bangladesh, then check bilateral HS-level trade data for 2015–2019.
Statement that India is the second-largest exporter of cotton textiles and lists many destination countries, showing India's active global textile export role.
Given India's large role in cotton textile exports, a student could reasonably test whether Bangladesh (a major regional textile economy) is among the significant bilateral partners for these textile exports by consulting bilateral trade statistics.
Jute industry note: India stands second after Bangladesh in export of jute and jute products — this signals a strong India–Bangladesh link in jute/textile family goods.
A student can infer that jute/textile articles may be prominent in bilateral trade due to complementary positions (Bangladesh top exporter, India second), and should check bilateral HS flows (jute/textiles) for 2015–2019 to confirm.
Lists specific textile products India exports (yarn, fabrics, readymade garments), illustrating the product types that could be part of bilateral trade baskets.
Match these product types to Bangladesh's import needs/industry structure (e.g., inputs for its garment sector) and then examine bilateral import–export tables to see if these categories rank among top traded items.
- Explicitly lists the ranking of India’s export markets in the region, placing Nepal after Bangladesh and Sri Lanka.
- Directly implies Nepal was not the largest trading partner (it is third in the given ordering).
- States that Sri Lanka is India’s most important trading partner among SAARC countries, which contradicts Nepal being the largest.
- Provides additional regional corroboration that another South Asian country (Sri Lanka) ranked above Nepal.
Gives a concrete export figure for Nepal (7.7 billion) and lists Bangladesh (9.3 billion) for 2018–19, allowing direct comparison of export shares among South Asian countries.
A student can use these export values (and similar entries for other South Asian neighbours) to rank India's trade partners in 2018–19 and check whether Nepal was the largest.
Lists bilateral FTAs India has with South Asian neighbours including Nepal, indicating Nepal is a formal trading partner within regional agreements.
Combine the FTA membership with trade-volume data (e.g., from #2) to assess whether having an FTA corresponds to being a top trading partner.
Defines which countries constitute 'South Asia' (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka), clarifying the set of countries among which 'largest trading partner' should be judged.
Use this country list to gather and compare trade figures for all South Asian countries during 2015–2019 to determine rankings.
Describes strong economic ties between India and Nepal (trade, electricity, resources), implying significant bilateral trade but not its rank.
Use this contextual information to justify focusing on India–Nepal trade data when comparing volumes with other neighbours.
Notes India's central geography and many borders with neighbours, suggesting proximity often influences trade volume with neighbouring countries.
A student can combine the geographic point with bilateral trade figures to reason that neighbouring countries (e.g., Bangladesh, Nepal, Bhutan) are likely among larger partners and should be directly compared.
- [THE VERDICT]: Moderate/Trap. Statement 1 is a 'Consistency Trap' (easy elimination). Statement 3 requires knowing the #1 regional partner. Source: Economic Survey (External Sector chapter).
- [THE CONCEPTUAL TRIGGER]: India's Foreign Trade > Direction of Trade (Region-wise).
- [THE HORIZONTAL EXPANSION]: 1. Top 3 Global Trading Partners (USA, China, UAE). 2. Top SAARC Partner: Bangladesh (Exports > $10bn). 3. Trade Balance: Surplus with USA, Bangladesh, Nepal; Deficit with China, Switzerland, Iraq. 4. Top Export Item to Nepal/Bangladesh: Petroleum Products & Cotton.
- [THE STRATEGIC METACOGNITION]: Never memorize raw data tables. Memorize the 'Rank 1' country for each region and the 'Shape of the Graph' (Volatile vs. Linear). In macroeconomics, nothing increases 'consistently' for 10 years due to currency fluctuations and global shocks.
The India–Sri Lanka FTA is the primary legal framework shaping bilateral trade flows between the two countries.
High-yield for questions on trade policy and bilateral economic relations; helps answer queries on causes of trade growth/decline, tariff liberalisation, and regional trade architecture. Links to broader topics such as trade agreements, balance of payments, and economic diplomacy; useful for both static and analytical UPSC questions on trade performance.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 13: International Organizations > 13.13 Free Trade Agreements (FTAs) and RCEP > p. 393
- Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 3: Contemporary South Asia > Ideas for the Teacher > p. 41
Maritime boundary settlements and ceding of Katchatheevu have direct implications for fisheries, maritime access and bilateral economic interactions with Sri Lanka.
Important for questions on maritime geopolitics, resource rights, and subcontinental diplomacy; connects to security, economic livelihoods (fisheries), and international law. Mastery enables answers that link territorial agreements to trade and bilateral tensions.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 16: India–Political Aspects > India-Sri Lanka Boundary > p. 50
- Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 39: After Nehru... > Foreign Policy and Relations with other Countries > p. 700
Joint infrastructure projects such as port terminal development directly affect trade capacity and logistics between India and Sri Lanka.
Relevant for topics on trade logistics, regional connectivity and economic diplomacy; helps frame answers on how infrastructure cooperation can raise trade volumes and shape bilateral economic ties. Connects to questions on trade promotion, investment, and regional economic projects.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 16: India–Political Aspects > INDIA'S ROLE IN WORLD AFFAIRS > p. 60
Textiles form a large and economically important export sector for India, contributing substantial export earnings, industrial output and employment.
High-yield for UPSC because questions often ask about sectoral contributions to exports, employment and foreign exchange; links to industrial policy, trade policy and labour issues. Mastering this helps answer questions on India’s export structure and sectoral vulnerabilities.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 11: Industries > COTTON TEXTILE INDUSTRY > p. 8
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 12: Transport, Communications and Trade > Table 12.7 > p. 47
Manufactured goods dominate India’s exports, with textiles (including RMG) representing a significant percentage share of export value in the mid-teens (around 2016–17).
Useful for questions on changing export patterns, balance of trade and trade policy; connects to topics on industrial diversification, comparative advantage and export promotion measures. Enables answering data-based or trend questions on export composition.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 12: Transport, Communications and Trade > Table 12.7 > p. 47
- INDIA PEOPLE AND ECONOMY, TEXTBOOK IN GEOGRAPHY FOR CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Changing Pattern of ttern ofttern of the Composition of India's Expor s Exports > p. 87
Jute is export-oriented in the region; Bangladesh and India occupy top positions in jute/jute-products trade, highlighting close bilateral/regional commodity links in textile-related products.
Relevant for bilateral trade questions and regional economic linkages; helps address questions on sector-specific trade ties (e.g., raw materials and traditional industries) and implications for regional cooperation and competition.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 11: Industries > JUTE TEXTILE > p. 19
Provides specific export/import values and rank positions for countries in 2018–19 necessary to compare Nepal with other South Asian partners.
High-yield for UPSC: questions often require comparing trade volumes or identifying major partners using recent-year data. Mastering how to read and compare trade-value tables helps answer objective and analytical questions on trade patterns and regional economic weight.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 12: Transport, Communications and Trade > India's Major Trading Partners 2018 > p. 49
While looking at trade volumes, note the 'Balance of Trade'. India enjoys a Trade Surplus with almost all South Asian neighbors (Nepal, Bangladesh, Bhutan, Sri Lanka), unlike its massive Trade Deficit with East Asian partners (China, ASEAN).
The 'Consistency Filter': Statement 1 uses 'consistently increased' for a decade. In international trade, exchange rates and oil prices fluctuate yearly. A 10-year consistent rise is virtually impossible. Eliminate S1. You are left with B and C. Between Nepal (landlocked, smaller economy) and Bangladesh (manufacturing hub), Bangladesh is logically the larger partner. Thus, S3 is false. Mark B.
Mains GS-2 (International Relations): This trade data underpins the 'Neighborhood First' policy. The high volume of textile trade with Bangladesh creates 'Value Chain Integration' (Indian cotton -> Bangladeshi shirts -> Global market), which is a key diplomatic lever.