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With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1. Quantitative restrictions on imports by foreign investors are prohibited. 2. They apply to investment measures related to trade in both goods and services. 3. They are not concerned with the regulation of foreign investment. Select the correct answer using the code given below:

With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1. Quantitative restrictions on imports by foreign investors are prohibited. 2. They apply to investment measures related to trade in both goods and services. 3. They are not concerned with the regulation of foreign investment. Select the correct answer using the code given below: Correct Answer 1 and 3 only

The correct answer is 1 and 3.

  • Trade-Related Investment Measures provide quantitative restrictions on imports by foreign investors are prohibited. Hence statement  1 is correct.
  • TRIMS agreement applies only to investment measures related to trade in goods and not in services and it is mentioned in Article 1 of the TRIMS agreement,  hence statement 2 is incorrect.
  • As per the TRIMs Agreement, members are required to notify the WTO Council for Trade in Goods of their existing TRIMs that are inconsistent with the agreement.
  • TRIMs are rules that restrict the preference of domestic firms and thereby enable international firms to operate more easily within foreign markets.
  • They don’t regulate foreign investment as such, which is governed by FEMA and DIPP guidelines/regulations. Hence statement 3 is correct.

​Additional Information

Features of TRIMS are-

  • Offering equal rights to the foreign investor on par with domestic players
  • Abolition of restrictions imposed on foreign goods.
  • Permission grant to import raw material without restrictions.
  • Abolition of restrictions on any area of investment

Key Points

As per the provisions of Article. 5.1 of the TRIMs Agreement India had notified three trade-related investment measures which are as follows-

  • 1. Local content (mixing) requirements in the production of News Print,
  • 2. Dividend balancing requirement in the case of investment in 22 categories of consumer goods. 
  • 3. Local content requirement in the production of Rifampicin and Penicillin – G

Related Questions

Each item consists of six sentences of a passage. The first and sixth sentences are given in the beginning as S1 and S6. The middle four sentences in each have been jumbled up and labelled as P, Q, R and S. You are required to find the proper sequence of the four sentences and markyour response accordingly on the Answer Sheet.
S1 :In a globalized world, no country can hope to impose tariffs without affecting its own economic interests.
S6 :The ongoing trade war also threatens the rules-based global trade order which has managed to amicably handle trade disputes between countries for decades.
P :So both the U.S. and China, which have blamed each other for the ongoing trade war, are doing no good to their own economic fortunes by engaging in this tit-for-tat tariff battle.
Q : Apart from disadvantaging its consumers, who will have to pay higher prices for certain goods, tariffs will also disrupt the supply chain of producers who rely on foreign imports.
R : China, which is fighting an economic slowdown, will be equally affected.
S :The minutes of the U.S. Federal Reserve June policy meeting show that economic uncertainty due to the trade war is already affecting private investment in the U.S., with many investors deciding to scale back or delay their investment plans
The correct sequence should be
Given below are six sentences of a  passage. The first and sixth sentences are given in the beginning as S1 and S6. The middle four-sentence in each have been jumbled up and labelled as P, Q, R and S. You are required to find the proper sequence of the four sentences. S1: In a globalised world, no country can hope to impose tariffs without affecting its own economic interests. S6: The ongoing trade war also threatens the rules-based global trade order which has manages to amicably handle trade disputes between countries for decades. P: So both the U.S. and China, which have blamed each other for the ongoing trade war, are doing no good to their own economic fortunes by engaging in tit-for-tat tariff battle. Q: Apart from disadvantaging its consumers, who will have to pay higher prices for certain goods, tariffs will also disrupt the supply chain of producers who rely on foreign imports. R: China, which is fighting an economic showdown, will be equally affected. S: The minutes of the U.S. Federal Reserve June policy meeting show that economic uncertainty due to the trade war is already affecting private investment in the U.S., with many investors deciding to scale back or delay their investment plans.
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Consider the following statements in the context of Trade Related Investment Measures (TRIMs).
1. All restrictions on foreign capital companies are to be scrapped
2. No restriction will be imposed on any area of investment
3. Imports of raw material are to be allowed freely
4. Emport of part of the output will be mandatory
Which of the above statements are correct?
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2. Trade Unions may be temporary or permanent.
3. Workmen means all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises.
4. Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.
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