2022 GS Paper I, all questions

UPSC Prelims 2022 · GS Paper I

Question 6: Economy and Social Development

With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct ?

  1. 1.They can sell their own goods in addition to offering their platforms as market-places.
  2. 2.The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below :

a1 only
b2 only
cBoth 1 and 2
dNeither 1 nor 2

AnswerUPSC’s answer is (d).

Under India's FDI policy, a foreign-owned e-commerce firm may run only a marketplace, a neutral platform linking buyers and sellers. It cannot sell its own goods through an inventory model, and it cannot own or control the inventory of sellers on its platform. Both statements fail: the first because own-goods sales are barred, the second because ownership of sellers is prohibited outright, not limited in degree.

  • 1. Foreign-owned e-commerce firms are limited to the marketplace model and cannot sell their own inventory.
  • 2. The policy bars a platform from holding equity in or controlling inventory of its sellers altogether; it is not a cap on degree.

How you could have got this

  1. If you were sure statement 1 is not correct, (a) and (c) go: each of them includes 1.

    What you needed to know: Foreign-owned e-commerce firms are limited to the marketplace model and cannot sell their own inventory.

  2. Then, if you were sure statement 2 is not correct, (b) goes: it includes 2.

    What you needed to know: The policy bars a platform from holding equity in or controlling inventory of its sellers altogether; it is not a cap on degree.

Only (d) is left. This one needs every statement.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Wrong. Foreign-owned firms cannot sell their own goods; only marketplaces are allowed.
  • (b) Wrong. The rule on sellers is a prohibition, not a limit on degree of ownership.
  • (c) Wrong. Neither statement matches the policy.
  • (d) Correct. Own-goods sales are barred and ownership or control of sellers is not allowed.

Worth knowing: Statement 2 is arguable, since the policy does restrict a platform's ownership of sellers, but UPSC treats it as incorrect because the bar is complete rather than a limit on degree.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2022, General Studies Paper I, Series A. The paper on upsc.gov.in.