Assertion (A): Foreign trade policy is an important instrument that incentivises the exporters of the country.

Reasons (R): It is important for exporters of our country to have knowledge of foreign trade policy

Which of the following option is correct?

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UGC NET Paper 2: Management 4th Dec 2019 Shift 2
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  1. Both (A) and (R) are correct and (R) is the correct explanation of (A)
  2. Both (A) and (R) are correct but (R) is not the correct explanation of (A)
  3. (A) is correct but (R) is not correct.
  4. Both (A) and (R) are incorrect

Answer (Detailed Solution Below)

Option 2 : Both (A) and (R) are correct but (R) is not the correct explanation of (A)
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UGC NET Paper 1: Held on 21st August 2024 Shift 1
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50 Questions 100 Marks 60 Mins

Detailed Solution

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Key Points

Foreign trade policy

  • A system of rules guiding and regulating the import and export of commodities and services is known as the foreign trade policy.
  • its other name is EXIM (export-import) policy.

Important Points

 Assertion (A): Foreign trade policy is an important instrument that incentivizes the exporters of the country.

  • In Foreign Trade Policy, various financial aid provided by the Indian government to exporters,
  • It includes low-cost loans, tax breaks, subsidies, and government-funded marketing campaigns,
  • Thus, it lowers their overall export costs, and they are better able to set competitive prices on the international market.

Hence, the assertion is correct that foreign trade policy supports and benefits the exports of the nation.

Reasons (R): It is important for exporters of our country to have knowledge of foreign trade policy.

  • Though it is crucial for exporters to have knowledge of all benefits provided by foreign trade policies.
  • This is important to achieve the objective of export promotion.
  • However, the reason is true but not a valid explanation of the assertion.

Hence, the correct answer is Both (A) and (R) are correct but (R) is not the correct explanation of (A)

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