India Faces Trade Deficit With Nine Out Of Ten Major Partners In April-October FY24
New Delhi, Jan 2 (KNN) During the initial seven months of the fiscal year 2023-24, India registered a trade deficit with nine out of its top ten trading partners, with the United States being the sole exception, as per the Economic Times report.
India saw a trade surplus of USD 19.59 billion with the United States, its largest trading partner. However, trade deficits were recorded with China (USD 51.11 billion), Russia (USD 33.56 billion), the UAE (USD 6.83 billion), Hong Kong (USD 7.59 billion), Saudi Arabia, Indonesia, Iraq, Singapore, and South Korea.
Imports from Russia primarily consisted of petrol, high-calorific value coal, coke and briquettes, and fertilisers, especially potash. A decline in gem and jewellery exports to Hong Kong and the US contributed to the trade gap with Hong Kong. The April-November period of FY24 witnessed a 6.51 per cent decrease in India’s total merchandise exports, amounting to USD 278.8 billion, and an 8.67per cent decline in imports, totalling USD 445.15 billion.
Trade deficits with certain countries, such as Indonesia, were attributed to edible oil imports. The deficit with Korea persisted despite the Comprehensive Economic Partnership Agreement signed in 2009. Iran reduced tea and rice imports due to foreign exchange issues and delays in finalising the rupee-payment mechanism.
India’s exports to Iran dropped by 47 per cent Year on Year to USD 567 million in April-October 2023, partly affected by the Israel-Hamas conflict impacting export revival prospects. The decline was linked to minimal rupee balance in the rupee-rial account, with the rupee-rial mechanism nearly non-functional due to suspended oil imports.
Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), noted that geopolitical issues and a general economic slowdown in developed economies were impacting India’s exports and trade balance. Experts suggested that reviews of existing free trade agreements were unlikely to address the trade deficit.
Recommended for you
