GS Paper 3
Topics covered: Indian economy- growth and issues arising from it
Context: India’s merchandise exports in August touched $33.14 billion, 45.17% higher than a year ago and 27.5% over the pre-pandemic level of August 2019
- Despite the increase in export, the trade deficit widened to a four-month high driven by a sharp uptick in gold imports
- Merchandise imports grew during this time. It grew 51.47% year-on-year to $47 billion, which is also 18% higher than August 2019. This was the primary reason for the widened trade deficit despite an increase in export
- Gold saw the large increase in import numbers. Gold imports surged to a five-month high of $6.7 billion in August 2021 and were responsible for 88% of the rise in the merchandise trade deficit relative to July 2021.
- The government has set a target of merchandise exports worth $400 billion for the year and so far as achieved 163 billions of dollar exports
- Though the global trade is recovering which is helping Indian exporters, attention must be given to resolving increasing freight rates, large container shortages and releasing benefits under various export schemes
- Growth in export in labour-intensive sector such as textiles and apparel sector has been less than expected (14%) during this period.
India’s export growth story- Click here
- What are merchandise exports?
- Measures taken in recent times to increase exports
- Major items of exports and imports
- What is trade deficit?
Why has India not been able to increase its share in global export market?
Source: The Hindu