With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct? 1) Quantitative restrictions on imports by foreign investors are prohibited. 2) They apply to investment measures related to trade in both goods and services. 3) They are not concerned with the regulation of foreign investment. Select the correct answer using the code given below:

The correct answer is C (1 and 3 only). TRIMS is an Uruguay Round agreement under the WTO, and it applies only to investment measures that restrict or distort trade in goods.

• Statement 1 is correct. The illustrative list in the TRIMS Annex covers measures inconsistent with GATT Article III (national treatment) and Article XI (quantitative restrictions), such as local content and trade-balancing requirements.
• Statement 2 is wrong. TRIMS covers trade in goods only. Investment-related measures in services fall under GATS, not TRIMS.
• Statement 3 is correct in the narrow sense. TRIMS does not regulate foreign investment as such. It does not deal with entry, establishment or investment protection. It only disciplines investment measures that have trade effects.

The core concept is the trade-investment interface at the WTO. For Mains, this links to India's local content rules in solar and EV programmes, which drew WTO challenges, and to the policy space India keeps for FDI regulation outside TRIMS.

Trap: Aspirants mark statement 2 as correct because they assume all investment measures fall under WTO trade rules. Services-related investment falls under GATS.