Q1. In March 2026, India began exploring local currency payments for oil imports primarily to address which combination of challenges?
A Rising inflation and falling exports
B Weakening rupee and surging dollar-denominated crude prices Correct
C Declining forex reserves and trade surplus
D Rising fiscal deficit and falling gold reserves
Explanation
India faced a dual challenge: the rupee hit an all-time low of ₹94.1/$ while crude oil surged to $123/barrel. Paying in local currencies reduces dollar demand and buffers against both pressures simultaneously.