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India’s Trade Deficit

Why is it in the news?

  • India’s foreign trade in August saw a decline in goods exports for the seventh consecutive month.
  • The goods trade deficit in August reached a 10-month high, standing at $24.16 billion.
    • Goods exports in August decreased by 6.86%, but the rate of decline eased compared to previous months, resulting in a total of $34.5 billion in exports.
  • Services exports, which had been growing at a strong rate, are estimated to have shrunk by 0.4% in August, reaching $26.39 billion.

Trade Deficit

  • Trade deficit occurs when a country’s import payments exceed the receipts from its exports.
  • It arises in international trade when a nation’s imports surpass the income generated from its exports.
  • Trade deficit is often referred to as a negative balance of trade.

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