Trade deficit surged to $22 billion
Trade data has been published by the Commerce Ministry, the merchandise trade deficit soared to a five-month high of $22.1 billion in May, compared to $15.2 billion in April.
The exports have compressed for fourth months in a row due to the global demand slowdown and contracting 12.7% in April.
The exports in merchandise sector went down by 10.2% on-year to $35 billion in May, whereas, the imports in this category declined by 6.5 percent on-year to $57.1 billion.
Why trade deficit surged?
- The merchandise exports were almost flat as it resisted at $34.6 billion in April while the imports recorded a surge of nearly 14% in May at $49.9 billion.
- The commerce ministry reasoned this export fall over global economic slowdown.
- The government is making a plan to focus on the “Make in India” and “Make for the World” campaigns to build up the exports.
- India should not focus only on domestic consumption but also focus on material that can be exported.
- The commerce ministry is also looking to form an alliance between investment and trade which will focus on 11 countries and 8 commodity groups in the initial phase.
- Services exports are looking very positive and India is not worried about facing a slowdown there.
- Country’s overall trade deficit is narrowed to $10.35 billion in May 2023 in comparison with year-ago period.
- The combined trade deficit for April had dived to 21-month low at $1.38 billion.
Question & Answer:
Q1. According to the Commerce Ministry, the merchandise trade deficit soared to how much billion US dollar in May 2023?
Ans. $22.1 billion
Q2. Which sector exports are looking positive and might not be affected by global slowdown?
Ans. Service sector