Lok Sabha Question No. 498 (UNSTARRED), answered on 2020-02-05
Subject: India’s Trade Deficit
Ministry: COMMERCE AND INDUSTRY
Asked by: Nalin Kumar Kateel

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 498 TO BE ANSWERED ON 05 th FEBRUARY, 2020 TO BE ANSWERED ON 05

## INDIA'S TRADE DEFICIT

## 498.   SHRI NALIN KUMAR KATEEL:

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) whether trade deficit of India is widening gradually;
- (b) if so, the details thereof during each of the last three years;
- (c) whether the Government has maintained any data regarding the percentage of trade deficit with the Asian countries during the last three years, if so, the details thereof;
- (d) whether the Government has taken any steps on the balance of trade during the last t hree years; and
- (e) if so, the details thereof?

## ANSWER

## THE MINISTER OF  COMMERCE AND INDUSTRY

okf.kT; ,oa m|ksx ea=h ( Jh ih;w'k xks;y ) (SHRI PIYUSH GOYAL)

## (a) and (b ):      India's merchandise trade deficit for last three years are as follows:

| Years           | Trade deficit ( US$ Billion)   | %Change     |
|-----------------|--------------------------------|-------------|
| 2015-16         | -118.72                        | --          |
| 2016-17         | -108.50                        | -8.61       |
| 2017-18 2017-18 | -162.05 -162.05                | 49.35 49.35 |
| 2018-19         | -183.96                        | 13.52       |

Source: DGCI&S.

The data in the above table shows that India's trade deficit decreased by 8.61 percent in 2016-17 over 2015-16  and  thereafter  increased  by  49.35  percent  in  2017-18  and  13.52  percent  in  2018-19  as compared to the previous years.

- (c) The details of merchandise trade deficits along with percentage change of Asian countries during last three years are given in Annexure-I.
- (d) and (e): In order to boost India's exports and bring down trade deficit, Government has taken following steps:
- (i) A new Foreign Trade Policy (FTP) 2015-20 was launched on 1 st April 2015. The policy, inter alia,  rationalised  the  earlier  export  promotion  schemes  and  introduced  two  new  schemes, namely Merchandise Exports from India Scheme (MEIS) for improving export of goods   and 'Services Exports from India Scheme (SEIS)' for increasing exports of services. Duty credit scrips issued under these schemes were made fully transferable.
- (ii) Based  on  Mid-term  Review  of  the  FTP  2015-20  undertaken  on  5th  December,  2017, incentives for labour intensive / MSME sectors were increased by 2%.
- (iii) A  new  Logistics  Division  was  created  in  the  Department  of  Commerce  for  integrated development of the logistics sector.  India's rank in World Bank's Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
- (iv) Interest Equalization Scheme on pre and post shipment rupee export credit was introduced from 1.4.2015 providing interest equalisation at 3% for labour intensive / MSME sectors. The rate  was  increased  to  5%  for  MSME  sectors  with  effect  from  2.11.2018  and  merchant exporters were covered under the scheme with effect from 2.1.2019.
- (v) For improving ease of doing business, online issuance of Importer Exporter Codes (IEC), has been started. India's rank in World Bank 'Eas e of Doing Business' ranking improved from 142 in 2014 to 63 in 2019 with the rank in 'trading across borders' moving up from 122 to 80.
- (vi) A new scheme called 'Trade Infrastructure for Export Scheme (TIES)' was launched with effect from 1 st April 2017 to address the export infrastructure gaps in the country.
- (vii) A comprehensive 'Agriculture Export Policy' was launched on 6th December, 2018 with an aim to double farmers' income by 2022 and provide an impetus to agricultural exports.
- (viii) A new scheme called 'Transport and Marketing Assistance' (TMA) has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.

## Statement referred to in reply of part (c) of Lok Sabha Unstarred question no. 498 for answer on 5 th February 2020.

Merchandise trade deficits along with percentage change of Asian countries during last three years

(Value in US$ Million)

| SR. No.                  | COUNTRIES IN ASIA        | TRADE DEFICIT 2015-16   | TRADE DEFICIT 2016-17   | %Change 2016-17 over 2015- 16   | TRADE DEFICIT 2017-18   | %Change 2017-18 over 2016-17   | TRADE DEFICIT 2018-19   | %Change 20118-19 over 2017-18   |
|--------------------------|--------------------------|-------------------------|-------------------------|---------------------------------|-------------------------|--------------------------------|-------------------------|---------------------------------|
| 1                        | CHINA P RP               | -39740                  | -51111                  | 29                              | -63047                  | 23                             | -53567                  | -15                             |
| 2                        | SAUDI ARAB               | -11213                  | -14862                  | 33                              | -16659                  | 12                             | -22917                  | 38                              |
| 3                        | IRAQ                     | -8067                   | -10596                  | 31                              | -16154                  | 52                             | -20584                  | 27                              |
| 4                        | KOREA RP                 | -7200                   | -8344                   | 16                              | -11901                  | 43                             | -12054                  | 1                               |
| 5                        | INDONESIA                | -8120                   | -9940                   | 22                              | -12475                  | 26                             | -10574                  | -15                             |
| 6                        | IRAN                     | -2944                   | -8127                   | 176                             | -8459                   | 4                              | -10015                  | 18                              |
| 7                        | QATAR                    | -6375                   | -6862                   | 8                               | -6937                   | 1                              | -9111                   | 31                              |
| 8                        | JAPAN                    | -3733                   | -5909                   | 58                              | -6239                   | 6                              | -7911                   | 27                              |
| 9                        | KUWAIT                   | -3105                   | -2964                   | -5                              | -5800                   | 96                             | -6097                   | 5                               |
| 10                       | HONG KONG                | 4315                    | 5843                    | 35                              | 4014                    | -31                            | -4985                   | -224                            |
| 11                       | SINGAPORE                | 350                     | 2478                    | 609                             | 2736                    | 10                             | -4709                   | -272                            |
| 12                       | MALAYSIA                 | -4107                   | -3709                   | -10                             | -3310                   | -11                            | -4382                   | 32                              |
| 13                       | THAILAND                 | -2040                   | -2282                   | 12                              | -3481                   | 53                             | -3000                   | -14                             |
| 14                       | TAIWAN                   | -1497                   | -959                    | -36                             | -1770                   | 84                             | -1970                   | 11                              |
| 15                       | VIETNAM SOC REP          | 2144                    | 3466                    | 62                              | 2795                    | -19                            | -685                    | -125                            |
| 16                       | JORDAN                   | -268                    | -306                    | 14                              | -444                    | 45                             | -537                    | 21                              |
| 17 17                    | BRUNEI BRUNEI            | -461 -461               | -585 -585               | 27 27                           | -372 -372               | -36 -36                        | -535 -535               | 44 44                           |
| 18                       | OMAN                     | 138                     | 1438                    | 939                             | -1825                   | -227                           | -513                    | -72                             |
| 19                       | MACAO                    | -5                      | -6                      | 30                              | 6                       | -187                           | -5                      | -194                            |
| 20                       | MONGOLIA                 | 3                       | 8                       | 152                             | 19                      | 141                            | 22                      | 16                              |
| 21                       | KOREA DP RP              | 16                      | -44                     | -373                            | 32                      | -174                           | 24                      | -26                             |
| 22                       | LAO PD RP                | -86                     | -182                    | 112                             | -144                    | -21                            | 38                      | -127                            |
| 23                       | SYRIA                    | 68                      | 89                      | 31                              | 128                     | 43                             | 140                     | 10                              |
| 24                       | CAMBODIA                 | 68                      | 69                      | 1                               | 66                      | -5                             | 153                     | 134                             |
| 25                       | BAHARAIN IS              | 275                     | 181                     | -34                             | 126                     | -31                            | 203                     | 61                              |
| 26                       | MALDIVES                 | 129                     | 189                     | 46                              | 211                     | 12                             | 203                     | -4                              |
| 27                       | LEBANON                  | 160                     | 180                     | 12                              | 219                     | 21                             | 225                     | 3                               |
| 28                       | AFGHANISTAN              | 191                     | 213                     | 11                              | 276                     | 29                             | 280                     | 1                               |
| 29                       | BHUTAN                   | 116                     | 201                     | 74                              | 168                     | -17                            | 286                     | 70                              |
| 30                       | U ARAB EMTS              | 7208                    | 9666                    | 34                              | 6407                    | -34                            | 341                     | -95                             |
| 31                       | MYANMAR                  | -163                    | 41                      | -125                            | 327                     | 704                            | 684                     | 109                             |
| 32                       | YEMEN REPUBLC            | 260                     | 441                     | 70                              | 410                     | -7                             | 730                     | 78                              |
| 33                       | PHILIPPINES              | 542                     | 988                     | 82                              | 928                     | -6                             | 1163                    | 25                              |
| 34                       | PAKISTAN IR              | 1265                    | 1367                    | 8                               | 1436                    | 5                              | 1572                    | 9                               |
| 35                       | ISRAEL                   | 605                     | 1126                    | 86                              | 1298                    | 15                             | 1786                    | 38                              |
| 36                       | SRI LANKA DSR            | 3429                    | 3311                    | -3                              | 3704                    | 12                             | 3222                    | -13                             |
| 37                       | NEPAL                    | 2244                    | 5008                    | 123                             | 6175                    | 23                             | 7258                    | 18                              |
| 38                       | BANGLADESH PR            | 3844                    | 6118                    | 59                              | 7929                    | 30                             | 8165                    | 3                               |
| Total of Asian Countries | Total of Asian Countries | -94814                  | -92824                  | -2                              | -130037                 | 40                             | -157546                 | 21                              |

Note: -ve connotes trade deficit and +ve connotes trade surplus

Source: DGCI&S.

## Annexure-I