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Topic 164 · Economy, Budget & Banking

West Asia war and India's '3F' challenge

10 MCQs · tap an option to check it · All answers

Revise the 12 points first Book 1 RATNA

Core Trigger: The Strait of Hormuz closed from late February 2026 during the West Asia war, hitting India's energy and rupee.
3F Risks: The Finance Minister named three risks: fuel, fertiliser, foreign exchange.
Current Head: Finance Minister Nirmala Sitharaman named them; Sanjay Malhotra is RBI Governor.
Policy Appeal: The government appealed to the public to curb spending on gold and foreign travel to protect foreign exchange.
Data: India imports about 90 per cent of its crude, about 40 per cent via Hormuz; the basket neared $115 in April 2026.
Stakeholders: Qatari LNG is a feedstock for urea; a parliamentary panel sought a Fertiliser Supply Security Fund.
India Link: The rupee slid to about 95 per dollar in May 2026; Gulf remittances and trade routes transmit the shock.
Chokepoint: The Strait of Hormuz links the Persian Gulf to the Gulf of Oman and the Arabian Sea.
SDR Founded: The IMF created the Special Drawing Right in 1969; its basket has the dollar, euro, renminbi, yen and pound.
Landmark: UNCLOS (1982), Article 38 guarantees transit passage through straits used for international navigation.
Statutes: The FRBM Act, 2003 sets fiscal-deficit targets; the Foreign Exchange Management Act, 1999 governs foreign-exchange dealings.
Doctrine: Forex reserves comprise foreign currency assets, gold, SDRs and the reserve tranche position at the IMF.

Question 1 of 10

When did the Strait of Hormuz close during the West Asia war?

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Answer: (B) Late February 2026

Core Trigger: The Strait of Hormuz closed from late February 2026 during the West Asia war, hitting India's energy and rupee.From Book 1 RATNA, topic 164, point 1

Question 2 of 10

The '3F' risks named by the Finance Minister were fuel, fertiliser and what?

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Answer: (C) Foreign exchange

3F Risks: The Finance Minister named three risks: fuel, fertiliser, foreign exchange.From Book 1 RATNA, topic 164, point 2

Question 3 of 10

Who is the RBI Governor named alongside the Finance Minister?

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Answer: (C) Sanjay Malhotra

Current Head: Finance Minister Nirmala Sitharaman named them; Sanjay Malhotra is RBI Governor.From Book 1 RATNA, topic 164, point 3

Question 4 of 10

To protect foreign exchange, the public was urged to curb spending on what?

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Answer: (A) Gold and foreign travel

Policy Appeal: The government appealed to the public to curb spending on gold and foreign travel to protect foreign exchange.From Book 1 RATNA, topic 164, point 4

Question 5 of 10

Consider: 1. India imports about 90 per cent of its crude. 2. About 75 per cent of that crude transits Hormuz. Which is/are correct?

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Answer: (A) Only 1

Data: India imports about 90 per cent of its crude, about 40 per cent via Hormuz; the basket neared $115 in April 2026.From Book 1 RATNA, topic 164, point 5

Question 6 of 10

Which fund did a parliamentary panel seek for fertiliser security?

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Answer: (B) Fertiliser Supply Security Fund

Stakeholders: Qatari LNG is a feedstock for urea; a parliamentary panel sought a Fertiliser Supply Security Fund.From Book 1 RATNA, topic 164, point 6

Question 7 of 10

Which water bodies does the Strait of Hormuz link?

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Answer: (D) Persian Gulf and Gulf of Oman

Chokepoint: The Strait of Hormuz links the Persian Gulf to the Gulf of Oman and the Arabian Sea.From Book 1 RATNA, topic 164, point 8

Question 8 of 10

In which year did the IMF create the Special Drawing Right?

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SDR Founded: The IMF created the Special Drawing Right in 1969; its basket has the dollar, euro, renminbi, yen and pound.From Book 1 RATNA, topic 164, point 9

Question 9 of 10

Which UNCLOS Article guarantees transit passage through international straits?

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Answer: (B) Article 38

Landmark: UNCLOS (1982), Article 38 guarantees transit passage through straits used for international navigation.From Book 1 RATNA, topic 164, point 10

Question 10 of 10

Consider: 1. FEMA, 1999 governs foreign-exchange dealings. 2. Forex reserves exclude gold. Which is/are correct?

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Answer: (A) Only 1

Doctrine: Forex reserves comprise foreign currency assets, gold, SDRs and the reserve tranche position at the IMF.From Book 1 RATNA, topic 164, point 12

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