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Steps to overcome trade deficit

India’s merchandise export registered a positive growth of 11.27 per cent during the last six months in 2017-18 (June-Nov) as compared to the corresponding period of the previous year.

The trade deficit has increased from 57.18 US$ billions in 2016-17 (June-Nov) to 74.27 US$ billions in 2017-18 (June-Nov). Trade deficit depends upon relative fluctuations in the import and export of different commodities due to the global and domestic factors such as demand and supply in domestic and international markets, currency fluctuations, cost of credit, logistics costs, etc.

The countries with whom India has favourable trade balance include US, UAE, Bangladesh, Nepal and United Kingdom during the first seven months of the current financial year. China and Saudi Arabia contributed excessively to the trade deficit of the country. India had unfavourable trade balance with both the countries for the past four successive years.

            The names of the top 25 countries/SAR with which India has registered favourable merchandise trade balance during the last three years and the current year are as follows:

S. No.

2014-15

2015-16

2016-17

2017-18 (Apr-Oct)*

1

U S A

U S A

U S A

U S A

2

Hong Kong

U Arab Emts

U Arab Emts

U Arab Emts

3

U Arab Emts

Hong Kong

Bangladesh PR

Bangladesh PR

4

Sri Lanka DSR

Bangladesh PR

Hong Kong

Nepal

5

Bangladesh PR

Sri Lanka DSR

Nepal

U K

6

U K

U K

U K

Hong Kong

7

Kenya

Nepal

Vietnam Soc Rep

Turkey

8

Nepal

Turkey

Turkey

Singapore

9

Turkey

Kenya

Sri Lanka DSR

Sri Lanka DSR

10

Netherland

Netherland

Netherland

Netherland

11

Vietnam Soc Rep

Vietnam Soc Rep

Singapore

Vietnam Soc Rep

12

Singapore

Pakistan IR

Kenya

Spain

13

Mauritius

Spain

Spain

Kenya

14

Mozambique

Gibraltar

Oman

Egypt A RP

15

Tanzania Rep

Egypt A RP

Pakistan IR

Mexico

16

Pakistan IR

France

Gibraltar

Italy

17

Egypt A RP

Mozambique

Israel

Pakistan IR

18

Spain

Mauritius

Italy

Israel

19

Philippines

Philippines

Philippines

Mauritius

20

Israel

Ethiopia

Egypt A RP

Poland

21

Italy

Tanzania Rep

Mauritius

Ethiopia

22

Ethiopia

Israel

Tanzania Rep

Philippines

23

Gibraltar

Sudan

Ethiopia

Tanzania Rep

24

Oman

Mexico

Portugal

Somalia

25

Jordan

Uganda

Mexico

Portugal

Source: DGCI&S, Kolkata (*Provisional)

 

            The names of the sectors in which India has favourable merchandise trade balance during the last three years and the current year are as follows:

S. No.

2014-15

2015-16

2016-17

2017-18 (Apr-Oct)*

1.

Textile & Allied Products

Textile & Allied Products

Textile & Allied Products

Textile & Allied Products

2.

Transport Equipments

Transport Equipments

Marine Products

Transport Equipments

3.

Agricultural & Allied Products

Marine Products

Leather & Leather Manufactures

Marine Products

4.

Marine Products

Leather & Leather Manufactures

Transport Equipments

Leather & Leather Manufactures

5.

Leather & Leather Manufactures

Agricultural & Allied Products

Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware

Agricultural & Allied Products

6.

Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware

Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware

Agricultural & Allied Products

Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware

7.

Plantation

Plantation

Plantation

Plantation

8.

Sports Goods

Sports Goods

Base Metals

Office Equipments

9.

--

--

Office Equipments

--

10.

--

--

Sports Goods

--

Source: DGCI&S, Kolkata (*Provisional)

 

            The names of the top 25 countries/SAR with which India has registered merchandise trade deficit during the last three years and the current year are as follows:

S.No.

2014-15

2015-16

2016-17

2017-18 (Apr-Oct)*

1

China P RP

China P RP

China P RP

China P RP

2

Switzerland

Switzerland

Switzerland

Switzerland

3

Saudi Arab

Saudi Arab

Saudi Arab

Saudi Arab

4

Qatar

Indonesia

Iraq

Korea RP

5

Iraq

Iraq

Indonesia

Iraq

6

Kuwait

Korea RP

Korea RP

Indonesia

7

Venezuela

Qatar

Australia

Australia

8

Nigeria

Nigeria

Iran

Unspecified

9

Indonesia

Unspecified

Qatar

Iran

10

Korea RP

Australia

Japan

Qatar

S.No.

2014-15

2015-16

2016-17

2017-18 (Apr-Oct)*

11

Australia

Venezuela

Nigeria

Russia

12

Malaysia

Malaysia

Venezuela

Nigeria

13

Belgium

Japan

Unspecified

Venezuela

14

Germany

Germany

Germany

Japan

15

Iran

Kuwait

Malaysia

Germany

16

Japan

Iran

Russia

Malaysia

17

Angola

Belgium

Kuwait

Kuwait

18

Unspecified

Russia

Angola

Thailand

19

Chile

Angola

South Africa

Angola

20

Thailand

Thailand

Thailand

Canada

21

Russia

South Africa

Ukraine

South Africa

22

Ukraine

Ghana

Canada

Argentina

23

Taiwan

Canada

Argentina

Brazil

24

Canada

Argentina

Brazil

Taiwan

25

Argentina

Taiwan

Ghana

Ukraine

Source: DGCI&S, Kolkata (*Provisional)

 

            The names of the sectors in which India has merchandise trade deficit during the last three years and the current year are as follows:

S. No.

2014-15

2015-16

2016-17

2017-18 (Apr-Oct)*

1.

Petroleum Crude and Products

Petroleum Crude and Products

Petroleum Crude and Products

Petroleum Crude and Products

2.

Electronics Items

Electronics Items

Electronics Items

Electronics Items

3.

Ores & Minerals

Ores & Minerals

Ores & Minerals

Gems & Jewellery

4.

Gems & Jewellery

Gems & Jewellery

Machinery

Ores & Minerals

5.

Machinery

Machinery

Gems & Jewellery

Machinery

6.

Plastic and Rubber Articles

Plastic and Rubber Articles

Plastic and Rubber Articles

Plastic and Rubber Articles

7.

Chemicals & Related Products

Base Metals

Paper & related Products

Paper & related Products

8.

Paper & related Products

Paper & related Products

Optical, Medical & Surgical instruments

Chemicals & Related Products

9.

Project Goods

Chemicals & Related Products

Project Goods

Optical, Medical & Surgical instruments

10.

Optical, Medical & Surgical instrument

Project Goods

Chemicals & Related Products

Project Goods

11.

Base Metals

Optical, Medical & Surgical instrument

--

Base Metals

12.

Office Equipments

Office Equipments

--

Sports Goods

Source: DGCI&S, Kolkata (*Provisional)

 

            The Government announced a major relief package for exporters in October 2017 by extending the Advance Authorization (AA) / Export Promotion Capital Goods (EPCG) / 100 per cent EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay Integrated Goods and Services Tax (IGST), Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports.

 

During the mid-term review of Foreign Trade Policy, export incentives under Merchandise Exports from India (MEIS) have been increased by 2 per cent across the board for labor intensive MSME sectors leading to additional annual incentive of Rs 4,567 cr.

 

This was in addition to already announced  increase in MEIS incentives from 2 to 4 per cent for Ready-made Garments and Made Ups in the labour intensive Textiles Sector with an additional annual incentive of Rs 2,743 cr. Further, incentives under Services Exports from India Scheme (SEIS) have also been increased by 2 per cent leading to additional annual incentive of Rs 1,140 cr.

 

The Minister of State for Commerce and Industry C.R.Chaudhary gave this information in a written reply to a question in Rajya Sabha last week.

 

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