India’s Merchandise Trade Deficit
Recently, the Minister of Commerce and Industry said in the context of the preliminary data of the report released by the government that – in March 2021, goods exports grew by 58 percent on an annual basis, to $ 34 billion. This is the highest in any one month in Indian history. Government policies are taking the country to new heights despite the pandemic.
Preliminary data released by the government showed that India’s trade deficit widened to US $ 14.11 billion in March 2021 from US $ 9.98 billion during March 2020.
- With the increase of 58.23%, India’s merchandise exports in March 2021 was USD 34.0 billion as compared to USD 21.49 billion in March 2020.
- For the first time, in one month, Indian exports crossed US $ 34 billion in March
- India’s trade imports stood at US $ 12 billion as compared to US $ 31.47 billion in March 2020, with an increase of 52.89%.
- During March, non-petroleum exports rose 62% while non-petroleum and non-jewelry exports grew 61%.
- The total trade of a country is measured by the sum of its imports and exports. Countries trade both goods and services.
- Country’s trade “balance” refers to the difference between earnings from its exports and payments for its imports.
- If the number received is negative – that is, the total value of the goods imported by a country is greater than the total value of the goods exported by that country – it is called a “trade deficit”. It is a part of the current account deficit.
Current Account Deficit:
- The current account shows the net gap of foreign exchange due to exports and imports.
- The current account mainly consists of three types of transactions-The first is the import-export of goods and services, second the income and expenses from employees and foreign investment and in the last, the gifts received from abroad, grant money and remittance sent by workers settled abroad are included.
- Current account deficit is different from Balance of Trade, Where the balance of trade only measures the difference in income and expenditure from exports and imports of goods and services, the current account also includes payments received from the use of domestic capital abroad.
Source – The Hindu