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India's Trade Deficit with Top Partners
Context
India faced a trade deficit with nine out of its top ten trading partners in the fiscal year 2023-24, according to official data. While the deficit widened with some countries, it narrowed with others, influencing India's overall trade balance.
Key Points:
- Deficit Trends: India's trade deficit increased with China, Russia, Korea, and Hong Kong in 2023-24 compared to the previous fiscal year.
- However, the deficit narrowed with the UAE, Saudi Arabia, Russia, Indonesia, and Iraq during the same period.
- Trade Partners: China emerged as India's largest trading partner with $118.4 billion in two-way commerce, surpassing the US. Bilateral trade with the US stood at $118.28 billion in 2023-24.
- Free Trade Agreements: India has free trade agreements with Singapore, the UAE, Korea, and Indonesia, contributing to its trade dynamics.
- Surplus and Deficit: India maintained a trade surplus of $36.74 billion with the US in 2023-24, along with surpluses with the UK, Belgium, Italy, France, and Bangladesh.
- However, the overall trade deficit for India decreased to $238.3 billion compared to the previous fiscal.
- Negative impacts of trade deficit: Currency depreciation, increased borrowing from foreign lenders, and decreased foreign investment.
Fact Box: About Trade Deficit
Trade Balance = Total Value of Exports – Total Value of Imports
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PYQQ1: With reference to the international trade of India at present, which of the following statements is/are correct? (2020)
Select the correct answer using the code given below:
Solution: (d) Q2: Consider the following actions which the Government can take: (2011)
Which of the above action/actions can help in reducing the current account deficit?
Solution: (d) |
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