• UGI USER
  • Jun 15, 2024
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EXPORTS UP 9% YEAR OVER YEAR; TRADE DEFICIT HITS 7-MONTH HIGH

Why in the news?

  • India’s goods exports increased by 9% year over year in May, reaching $38.13 billion.
  • Growth driven by electronics, petroleum, and engineering goods, with demand from Europe and the US.
  • Services exports rose 11% to $30.16 billion.
source:toi

About Trade Deficit:

  • Trade Deficit Definition: It happens when a nation’s imports exceed its exports in value.
  • Includes Goods and Services: Applies to both physical goods and services traded internationally.
  • Economic Impact: Can affect currency exchange rates and overall economic balance.
What is Current Account Deficit (CAD)?

  • Current Account Deficit (CAD): Occurs when a country imports more goods and services than it exports.
  • Trade Balance: Part of the Current Account Balance.
  • 2021 Report: Attributes CAD widening to high oil and gold imports

What is the Balance of payments?

  • Definition: Systematic record of a country’s economic transactions with the world annually.
  • Purposes: Indicates economic health, currency stability, guides fiscal policies.
  • Components: Current account (trade balance, services, income), capital account (investment flows), errors and omissions, changes in foreign exchange reserves.
  • Imbalance: Errors and omissions reflect inaccuracies; deficit may lead to a balance of payments crisis.

About the major Government Initiatives to Promote Export Growth:

  • Trade Infrastructure for Export Scheme (TIES): Supports infrastructure development for export hubs.
  • PM Gati Shakti National Master Plan (NMP): Enhances connectivity and logistics to boost exports.
  • Duty Drawback Scheme: Refunds duties paid on imported inputs used in exported products.
  • RoDTEP: Replaces MEIS, reimbursing taxes and duties on exported products.
  • Rebate of State and Central Taxes: Reduces embedded taxes to enhance export competitiveness.

Associated Article:

https://universalinstitutions.com/india-faces-trade-deficit-with-nine-of-top-trading-partners/

https://universalinstitutions.com/despite-various-government-interventions-the-trade-deficit-with-countries-like-china-is-expanding-examine-the-persistent-vulnerabilities-in-the-indian-economy-exposed-by-geopolitical-shifts-and-the/