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(GNDU) MOST REPETED (IMPORTANT) QUESTIONS
B.COM 3
rd
SEMESTER
INTERNATIONAL BUSINESS
Repeated Quesons
1. Objecves and Principles of WTO 2021 (Q6), 2022 (Q6), 2024 (Q4)
2. Special Economic Zones (SEZs) 2021 (Q7), 2023 (Q7), 2024 (Q8)
2025 Smart Predicon Table
Based on 4-Year Queson Paper Analysis
Queson Topic
Repeats
Years Appeared
Priority
Objecves and Principles of WTO
3 Times
2021, 2022, 2024
Very High
SEZs (Special Economic Zones)
3 Times
2021, 2023, 2024
Very High
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(GNDU) MOST REPETED (important) Answers
B.COM 3
rd
SEMESTER
INTERNATIONAL BUSINESS
Solved Answer Paper
1.Objecves and Principles of WTO 2021 (Q6), 2022 (Q6), 2024 (Q4)
Ans: The Story of WTO: Objectives & Principles Explained Simply
Imagine the world as one huge marketplace. In this marketplace, each country is like a
shopkeeper. Some are big shops (like the USA, China, India), and some are small shops (like
Bhutan, Nepal, or Fiji). Every shopkeeper sells something: one sells oil, another sells IT
services, one sells cars, another sells rice.
Now, what happens in a marketplace? If shopkeepers start fighting—blocking each other’s
entry, raising unfair prices, stealing ideas, or charging extra fees to some customers—chaos
begins. Nobody trusts anyone, and trade slows down. Customers suffer, sellers suffer, and
the market shrinks.
This was exactly the problem in the early 20th century. Countries were putting heavy taxes
(tariffs) on imports, blocking foreign goods, and even fighting wars over resources. After the
Second World War, the world realized:
“If we don’t create fair rules for global trade, there will always be conflicts.”
That’s how the World Trade Organization (WTO) was born in 1995 (though before that,
there was GATT – General Agreement on Tariffs and Trade, from 1948).
The WTO became the referee of the world marketplace. Its job? To make sure every shop
(country) follows the rules, trade flows smoothly, and no one is cheated.
Now, let’s break this down into two parts:
1. Objectives of WTO – what does it want to achieve?
2. Principles of WTO – the golden rules it follows.
Part 1: Objectives of WTO
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Think of the objectives as the dreams or goals of WTO. Why does it exist?
1. Promoting Free and Fair Trade
Imagine if one shopkeeper says: “I will only sell to my friends, not to you.” That’s unfair,
right? WTO’s first goal is to remove unnecessary trade barriers so that goods and services
can move freely across borders.
• Free trade = No unnecessary restrictions.
• Fair trade = Everyone treated equally.
For example, if India sells mangoes to the USA, and USA sells iPhones to India, both should
have fair chances without facing unfair taxes or bans.
2. Raising Standards of Living
WTO isn’t just about trade; it’s about people’s lives. When countries trade more, factories
produce more, jobs increase, income rises, and people’s lifestyles improve.
More trade = More jobs = Better living standards.
For instance, think about how exporting IT services gave Indian youth better job
opportunities. That’s WTO’s dream in action.
3. Ensuring Full Employment
One big fear after World War II was unemployment. WTO aims to create such an
environment where international trade leads to job creation.
For example, when a country exports clothes, it creates jobs for weavers, designers, and
factory workers. When it imports machines, it creates jobs for engineers and mechanics.
4. Optimal Use of World Resources
WTO encourages countries to focus on what they are best at producing (comparative
advantage).
• India is good at software → exports IT.
• Saudi Arabia is good at oil → exports oil.
• Japan is good at cars → exports automobiles.
This way, world resources are not wasted, and everyone benefits.
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5. Protecting the Environment
Trade should not harm the planet. WTO supports sustainable development. This means:
• Trade policies should be eco-friendly.
• Countries can’t destroy forests or oceans just to earn profit.
Example: WTO allows restrictions on products that endanger dolphins, whales, or violate
environmental laws.
6. Reducing Trade Barriers
Tariffs, quotas, import duties – these are like walls that block smooth trade. WTO’s job is to
lower these walls so goods and services can move freely.
Imagine a cricket match with too many rules—nobody would enjoy it. Similarly, too many
restrictions kill trade. WTO removes the unnecessary ones.
7. Settling Trade Disputes Peacefully
Without WTO, disputes between countries could turn into wars. For example:
• USA says: “China is dumping cheap steel.”
• China replies: “No, we’re just efficient.”
Instead of fighting, both go to WTO, and WTO acts as a courtroom to settle the issue.
8. Encouraging Economic Growth of Developing Countries
WTO knows not all countries are equally strong. So, it gives special treatment to developing
and least-developed countries (LDCs)—like lower tariffs, longer time to follow rules, and
technical help.
For example, Bangladesh gets special trade benefits for its textile exports.
Summary of Objectives (in simple words)
The WTO wants a world where:
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• Trade is free and fair.
• People get jobs and live better.
• Resources are used wisely.
• Disputes are solved peacefully.
• Even small and poor countries get a fair chance.
Part 2: Principles of WTO
If objectives are dreams, then principles are the rules to achieve those dreams.
Let’s think of WTO as a cricket match. Just like cricket has rules (no ball, LBW, fair play),
WTO has principles that every country must follow.
1. Most-Favoured-Nation (MFN) Principle
This is the golden rule of WTO.
It means: “If you give a benefit to one country, you must give it to all.”
Example: If India reduces import duty on Japanese cars from 40% to 30%, it must give the
same benefit to all WTO members (like Germany, USA, Korea).
No favourites, no discrimination.
2. National Treatment Principle
Once a foreign product enters your country, you can’t treat it worse than domestic
products.
Example: If Pepsi is sold in India, the Indian government can’t impose higher sales tax on
Pepsi while keeping lower tax on Thums Up. Both must be treated equally.
Equal treatment for foreign and local products.
3. Free Trade through Negotiation
Trade barriers should be reduced step by step through negotiation, not suddenly or unfairly.
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That’s why WTO conducts trade rounds (Uruguay Round, Doha Round, etc.), where
countries sit together and bargain:
• “I’ll reduce my textile tariffs if you reduce your tariffs on my IT services.”
Give and take, like bargaining in a market.
4. Predictability and Transparency
Businesses hate surprises. WTO ensures countries clearly announce their trade policies and
don’t change them overnight.
For example, if India promises to keep car import duty at 30%, it must stay that way unless
renegotiated.
Predictability builds trust.
5. Fair Competition
WTO is against cheating in trade. It prevents:
• Dumping (selling goods cheaper than cost).
• Subsidies (giving unfair support to domestic producers).
• Hidden restrictions (making complex rules to block imports).
Everyone should play fair.
6. Special & Differential Treatment for Developing Countries
Not all countries are equally strong. So, WTO gives flexibility to poor countries.
• They get longer time to follow rules.
• They can protect certain industries.
• They get technical and financial help.
Just like a schoolteacher gives weaker students extra time.
7. Sustainable Development Principle
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Trade should grow, but without destroying nature. WTO balances economic growth with
environmental protection.
Profit should not come at the cost of the planet.
A Quick Analogy to Remember
Think of WTO as a school:
• Students = Countries
• Objective = To make every student smart, happy, and successful
• Principles (Rules) = Be fair, no cheating, no discrimination, share knowledge, help
weaker students, and protect the classroom environment.
Conclusion
The WTO is like a guardian of global trade. Its objectives are to make trade free, fair,
predictable, and beneficial for all. Its principles are the golden rules that make sure
countries follow fairness, equality, and sustainability.
Without WTO, the world marketplace would be chaotic—like a bazaar full of fights, unfair
deals, and confusion. With WTO, trade becomes smoother, disputes are solved peacefully,
and even the smallest countries get a chance to shine.
So, whenever you hear “WTO,” don’t think of it as a boring international organization. Think
of it as the referee of world trade, making sure every shopkeeper (country) plays fair,
customers (citizens) get good products, and the market (world economy) keeps growing.
2. Special Economic Zones (SEZs) 2021 (Q7), 2023 (Q7), 2024 (Q8)
Ans: A Story to Understand Special Economic Zones (SEZs)
Imagine you are the ruler of a big kingdom. Your kingdom is full of hardworking people, rich
farmlands, and busy towns. But there is a problem—you notice that although your people
are skilled, foreign traders are not very interested in coming to your kingdom. Why?
Because your taxes are high, your rules are too many, and setting up a business in your land
takes a long time.
Now, as a wise ruler, you think: “What if I create a special area inside my kingdom where
rules are lighter, taxes are fewer, and facilities are better? What if I invite traders and
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businessmen from all over the world to come here, set up their factories, and in return, they
will bring money, jobs, and new technology for my people?”
That special area you just imagined is what we call a Special Economic Zone (SEZ).
What Exactly is an SEZ?
A Special Economic Zone is a specific area within a country where the government provides
special facilities and relaxations in laws, rules, and taxes to attract businesses and foreign
investors.
Think of it as a “business playground” where entrepreneurs can operate more freely than in
the rest of the country. These zones are set up to boost exports, create jobs, bring in new
technology, and strengthen the economy.
In short:
• An SEZ is like a mini-country inside a country where business rules are made easier.
• It is designed to encourage trade, manufacturing, and investment.
The Birth of SEZs – A Little History
The idea of SEZs is not new. In fact, it first became popular in the 20th century. Let’s look at
the journey:
1. 1959 – Puerto Rico (USA territory)
The first Free Trade Zone was established to attract companies.
2. 1970s – China
China became the biggest success story. Deng Xiaoping introduced SEZs in cities like
Shenzhen, Zhuhai, and Xiamen. Shenzhen, which was once a small fishing village,
transformed into one of the most modern cities in the world—all because of SEZs.
3. India
India introduced the SEZ policy in 2000, inspired by China. Before SEZs, India had
something called Export Processing Zones (EPZs), but they were not very successful.
Later, the SEZ Act, 2005 and SEZ Rules, 2006 gave a strong legal framework.
So, SEZs are not just Indian; they are a global idea that different countries use to give a push
to their economy.
Objectives of SEZs – Why Do We Need Them?
SEZs are not created just for fun; they serve some clear purposes:
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1. Increase Exports – By making it easy for companies to produce and sell goods
abroad.
2. Attract Foreign Direct Investment (FDI) – To bring in international money and
technology.
3. Create Jobs – To give employment to lakhs of people, especially youth.
4. Improve Infrastructure – Roads, ports, power supply, and connectivity improve in
and around SEZs.
5. Boost Industrial Growth – To make the country more competitive in manufacturing
and services.
6. Encourage Innovation – Companies bring new ideas, methods, and technologies.
In simple words, SEZs act as economic growth engines for a country.
Features of SEZs
Let’s break down the unique features that make SEZs different from normal areas:
• Duty-free imports: Companies in SEZs can import raw materials without paying high
customs duty.
• Tax holidays: They often get tax exemptions for several years.
• Easy land acquisition: Large plots are provided for industries.
• Single-window clearance: Instead of running from one office to another, approvals
are fast-tracked.
• World-class infrastructure: Better roads, ports, IT parks, and warehouses.
• Relaxed labor laws: More flexible rules for hiring and firing workers.
So basically, an SEZ is like a VIP area for businesses.
Types of SEZs
Not all SEZs are the same. Depending on focus, they can be:
1. Free Trade Zones (FTZs): Only for trade and re-export.
2. Export Processing Zones (EPZs): Focus on manufacturing for export.
3. Free Ports: Entire cities or regions with relaxed trade laws.
4. Industrial Parks: Mainly for manufacturing industries.
5. Tech Parks/IT SEZs: For IT and software services.
In India, we have SEZs in IT (like in Bengaluru, Hyderabad), Pharma, Textiles, Gems &
Jewellery, and even Multi-product SEZs that host multiple industries.
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SEZs in India – Examples
• Noida SEZ (Uttar Pradesh): Famous for electronics and IT.
• Kandla SEZ (Gujarat): One of the oldest, known for manufacturing and trading.
• Mundra SEZ (Gujarat): Linked to India’s biggest private port.
• Infosys SEZ in Bengaluru: Focused on software services.
• Reliance Jamnagar SEZ: Linked to the petroleum refinery.
These SEZs are like hubs where India connects with the global economy.
Advantages of SEZs
Like every good idea, SEZs bring many benefits:
1. Export Growth:
SEZs help a country sell more goods abroad, bringing in valuable foreign exchange.
2. Employment Opportunities:
Factories, offices, and IT parks in SEZs employ thousands of people.
3. Infrastructure Development:
Roads, airports, and power supply improve around SEZs, benefiting nearby areas too.
4. Foreign Investment:
International companies are attracted because of the easy rules.
5. Regional Development:
SEZs are often built in backward areas to spread development evenly.
6. Technology Transfer:
New machines, software, and management techniques come to the country.
7. Boost to “Make in India”:
They support manufacturing and self-reliance.
Disadvantages of SEZs
But life is never one-sided. SEZs also come with challenges:
1. Land Acquisition Problems:
Many farmers have protested because their land was taken to build SEZs.
2. Unequal Growth:
Sometimes, SEZs benefit only rich companies while common people remain poor.
3. Loss of Revenue:
Because of tax exemptions, the government may lose some income.
4. Limited Linkages:
Some SEZs remain isolated “islands of development” and don’t benefit the larger
economy.
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5. Environment Issues:
Industries in SEZs may cause pollution and harm ecosystems.
6. Underutilization:
In India, not all SEZs became successful; many exist only on paper or have very little
activity.
A Human Angle – SEZs and People’s Lives
To understand the human impact, let’s imagine two people:
• Ramesh (a farmer): His land was taken to build an SEZ. The compensation he got was
not enough. He feels cheated because farming was his identity.
• Sita (a graduate): She got a job in an IT SEZ. Her life changed completely—better
salary, lifestyle, and exposure to global culture.
This shows that SEZs can be both a blessing and a curse, depending on whose eyes you see
them through.
Success and Failures – Global vs Indian Experience
• China: SEZs like Shenzhen became massive success stories, turning China into the
“factory of the world.”
• India: Mixed results. While IT SEZs have done well, many manufacturing SEZs
struggled due to complicated procedures and global competition.
The Future of SEZs
With globalization, SEZs are evolving:
• Focus on Green SEZs with eco-friendly practices.
• More emphasis on Digital SEZs for IT and AI industries.
• Integration with logistics hubs and smart cities.
India is now looking at new SEZ reforms (DESH Bill) to make them more effective.
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Conclusion – A Balanced View
Special Economic Zones are like special playgrounds where businesses get VIP treatment to
grow faster. They have the potential to transform economies, create jobs, and put a country
on the global map—as seen in China.
However, they also raise questions of land rights, environmental balance, and equality. For
India, the challenge is to make SEZs inclusive, efficient, and sustainable.
So, SEZs are neither angels nor villains—they are tools. And like any tool, their impact
depends on how wisely a country uses them
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