Daily Current Affairs for UPSC IAS
UPSC Syllabus: Mains – GS Paper III- Indian economy
Context: India exported merchandise worth $32.21 billion in May 2021, 67% higher on a year-on-year basis and almost 8% more than May 2019’s pre-pandemic shipments. The country’s merchandise trade deficit shrank to an eight-month low. Imports grew 68.6% to $38.53 billion, compared with May 2020, but were 17.5% lower than the same month in 2019
Recently, the Ministry of Commerce and Industry has published the preliminary foreign trade data for the month of May 2021.
(UPSC does not asks questions related to monthly foreign trade data. But UPSC is likely to ask questions on the foreign trade data for the entire financial year. In this regard, let us have a look at the India’s foreign trade data from the economic survey 2020-21.)
Details about India’s Foreign Trade
Merchandise Trade: In the year 2020-21, there was decline in both exports and imports. However, as seen above, the decline in imports was higher than decline in exports. Due to this reason, the trade deficit (Exports-Imports) in 2020-21 was lower in comparison to previous financial years.
Current Account Balance: The lower trade deficit was accompanied by increase in the export of software services increased from India. On account of these reasons, Current Account was set to register surplus for the first time in the last 17 years.
Top 3 Export commodities: Petroleum Products, Drug Formulations, Pearls and Precious Stones.
Top 3 Export Destinations for India: USA, China, UAE.
Top 3 Import Commodities: Crude Oil, Petroleum products and Gold
Top 3 Import sources: China, USA, UAE
India’s top trading partners
India’s merchandise trade balance for major countries for the period of 2020-21 (April-November) as compared to 2019-20 (April-November) shows that India had the most favourable trade balance with USA followed by Bangladesh and Nepal. The highest trade deficit is with China followed by Iraq and Saudi Arabia during April-November, 2020-21 and April-November, 2019-20.