23rd July 2024 (9 Topics)
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Trade tact
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Context
India's trade performance in tradehighlights the growth in exports and imports, the challenges of the trade and oil deficits, and the need for stable export policies to capitalize on global trade opportunities.
Trade Performance Highlights
- Goods Exports Growth: India’s goods exports grew 2.55% in June 2024, reaching 35.2 billion dollars, marking the third consecutive month of growth.
- Rising Imports: Imports increased by 5% to $56.2 billion, down from May’s peak of nearly $62 billion.
- Trade Deficit Concerns: The trade deficit rose 9.4% year-on-year but cooled slightly from the previous month.
Oil and Precious Metals Trade
- Oil Deficit Issues: The oil deficit, a significant concern, narrowed to $10 billion from May’s $13 billion record.
- Gold and Silver Imports: Gold imports fell by 38.7%, while silver imports surged 377% in June.
- Gems and Jewellery Exports: Exports in the gems and jewellery sector contracted for the seventh consecutive month in June.
Policy Focus and Recommendations
- Domestic Demand Recovery: Non-oil and non-gold imports rose 3% this year, with a 7% growth in June, indicating recovering domestic demand.
- Boosting Exports: Trade policy should focus on boosting exports rather than just checking the deficit, as 19 of 30 top export sectors grew.
- Stable Export Policies: The Centre should ensure stable policies, including adequate support for duty remission and interest equalisation schemes.
Mains Question:
Q.Examine India's trade performance and the challenges posed by the trade and oil deficits. Discuss the policy measures needed to boost exports and ensure stable trade policies for sustainable growth.
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