Trade Deficit
Simply put, a Trade deficit is the gap between exports and imports.
It is a condition when money spent on imports exceeds that spent on exports, trade deficit occurs.
It can be calculated for various goods and services and also for transactions of international nature.
The exact opposite of trade deficit is trade surplus.
India’s merchandise exports began 2024-25 on a mildly positive note, rising 1.07% to $35 billion in April.
But the import bill jumped 10.3% to $54.1 billion
Almost all of the sharp 32.3% year-on-year surge in April’s goods trade deficit, compared with the $14.4 billion gap in April 2023
Causes
It was fuelled by gold imports that tripled to $3.11 billion from $1.01 billion, and a 20.2% rise in the oil import bill, which amounted to $2.8 billion.
The gold import bill in April was also more than double the previous month’s tally
Apart from oil and gold, 14 more commodities that figure in India’s major import items, reported an uptick in April, including pulses (up 172.3%), fruits and vegetables (27.7%), medicines and pharmaceuticals (18.4%) and electronics (10%).
On the other hand, as many as 17 of the top 30 export items recorded contractions in April, including engineering goods (-3.2%), gems and jewellery (-6.9%), leather (-7.2%), man-made yarn (-6.3%) and readymade garments (-1%).
Several agricultural goods continued to see a drop in shipments, including rice (-4.8%), fruits and vegetables (-6.8%), while marine products fell almost 13%
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