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India’s increasing trade deficit UPSC NOTE


  • India has witnessed a 10.3% decline in goods exports, marking the fourth successive month of contraction in outbound shipments. 

  • This trend indicates a concerning situation for India's trade performance.

  • Various sectors, including engineering goods and textiles, have faced challenges in exports. 

  • Engineering goods, which constitute a significant portion of India's export basket, have contracted for 11 consecutive months. 

  • The textiles sector has also experienced contraction for seven straight months, highlighting the difficulties faced by exporters across different industries.

  • Petroleum exports have seen a 30% decline, largely influenced by cooling global prices. 

  • This decline in petroleum exports is in line with the overall trend affecting other commodities' export values and volumes.

  • While there was a 26.7% growth in services exports last year, contributing to narrowing trade and current account deficits, the growth rate has slowed down significantly. 

  • The reversal in the pace of growth began in March and continued in May, with a meager 0.7% rise in global services receipts. 

  • This slowdown in services exports indicates a broader global economic slowdown impacting the demand for services.

Steps to be taken

  • India should focus on diversifying its export markets to reduce dependence on specific regions or countries. 

  • Exploring emerging markets and strengthening trade relations with existing partners can help mitigate the impact of market fluctuations.

  • The government and industry should work together to enhance the competitiveness of Indian products in the global market. 

  • This can be achieved through investments in research and development, upgrading infrastructure, and promoting innovation in various sectors.

  • Encouraging domestic manufacturing and promoting value addition in exports can help reduce the trade deficit. 

  • By moving up the value chain and producing goods with higher value-added components, India can capture a larger share of the global market and increase export earnings.



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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: India’s increasing trade deficit UPSC NOTE
India’s increasing trade deficit UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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