India’s Trade Deficit:
According to some economists, India’s trade deficit is not a sign of weak manufacturing but reflects India’s strength in services and attractiveness as an investment destination.
- A trade deficit occurs when a country imports more goods and services than it exports. It represents the amount by which the value of imports exceeds the value of exports over a certain period.
- Overall Trade Deficit: Reduced from USD 121.6 billion (FY23) to USD 78.1 billion (FY24).
- Services exports stands at USD 339.62 in FY24 and Services Trade Surplus stands at USD 162.06 billion.
- India’s share in world services exports rose from 0.5% (1993) to 4.3% (2022), making India the 7th largest services exporter globally.
- Merchandise exports stands at USD 776 billion (FY23). Merchandise Trade Deficit narrowed to USD 238.3 billion (FY24) from USD 264.9 billion (FY23).
- Current Account Deficit (CAD): Reduced to USD 23.2 billion (0.7% of GDP, FY24) from USD 67 billion (2% of GDP, FY23).
- Capital Account Balance: Net inflows rose from USD 58.9 billion (FY23) to USD 86.3 billion (FY24), driven by foreign portfolio investment (FPI).
