AIR 27 · CSE 2025 · GS3 · 54 pages

Vikas: GS3 answer copy

20 answers by Vikas, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 188 words written

What are the factors influencing imported inflation in India? Suggest measures to mitigate its impact on the domestic economy.

Opening · a definition

Imported inflation refers to import of costly goods from outside leading to increased inflation in the country.

Body · points

Factors influencing it →

  1. Price of goods in international markets e.g. High crude prices due to high demand.

  2. Currency exchange rates as high exchange rates leads to costly imports.

  3. Geopolitical conflicts e.g. Iran-Israel tensions increasing price of oil & other resources.

  4. Dependence on imports for crucial goods e.g. India depends on imports for 85% of crude oil and 65% of natural gas needs.

  5. Safety and security of trade routes (eg) Houthi conflict and recent blockade of Suez Canal.

  6. Availability of alternatives (eg) Russian crude helped India to save $8 billion due to cheap oil.

Measures to mitigate the impact →

  1. Diversification of supply chains (eg) oil from Russia, USA, West Asia.

  2. Self Reliance through Atmanirbhar Bharat and de-risking by supply chain Resilience initiative.

  3. Manage currency by "Managed Float" or "Dirty Float" of RBI.

  4. Secure shipping lines & trade routes (eg) Operation Sankalp of Navy.

Close · a framework

Inflation shall be kept under control range decided by Monetary policy framework agreement for growth & development.