Lok Sabha Question No. 138 (STARRED), answered on 2021-02-10
Subject: Trade Deficit
Ministry: COMMERCE AND INDUSTRY
Asked by: Sajda Ahmed

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## (DEPARTMENT OF COMMERCE)

## LOK SABHA STARRED QUESTION NO. 138

## TO BE ANSWERED ON 10 th FEBRUARY, 2021

## TRADE DEFICIT

## *138.  SHRIMATI SAJDA AHMED:

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

- (a) the details of the steps taken by the Government to balance trade deficit of the country;
- (b) the details of the main export sectors that showed downward trend during recent years;
- (c) whether the Government has assessed the impact of 'Make in India' policy on trade and if so, the details thereof;
- (d) whether  imports  have  increased  during  the  last  one  year  in  spite  of  providing  a  boost  to domestic manufactures; and
- (e) if so, the reasons therefor?

## ANSWER

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

(a) to (e):  A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (e) OF LOK SABHA STARRED QUESTION  NO.  138  FOR  ANSWER  ON  10 th FEBRUARY,  2021 REGARDING   'TRADE DEFICIT'.

(a) : India's overall (merchandise and services) trade deficit decreased by 25.05% in 2019-20 over 2018-19.  During  April-November,  2020-21,  India's  overall  (merchandise  and  services)  exports were US$ 304.53 billion, higher than overall  imports of US$ 293.56 billion, resulting  in a trade surplus of US$ 10.97 billion. Despite the Covid pandemic situation India's merchandise exports in December  2020  were  US$  27.15  billion  as  compared  to  US$  27.11  billion  in  December  2019, showing a positive growth of 0.14%, due to several measures taken by the Government. Trade deficit depends upon relative fluctuations in the import and export of different commodities and services due to global and domestic factors such as demand and supply in domestic and international markets, currency fluctuations, international prices, etc.

The Government has taken the following key steps to promote exports:

- 1) Foreign Trade Policy (2015-20) extended by one year i.e. upto 31-3-2021 due to the COVID-19 pandemic situation.
- 2) Interest Equalization Scheme on pre and post shipment rupee export credit has also been extended by one year i.e. upto 31-3-2021.
- 3) A new Scheme, Remission of Duties and Taxes on Exported Products  (RoDTEP), has been launched with effect from 01.01.2021.
- 4) Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase FTA utilization by exporters.
- 5) A comprehensive 'Agriculture Export Policy' to provide an impetus to agricultural exports related to  agriculture,  horticulture, animal husbandry, fisheries and food processing sectors, is under implementation.
- 6) Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors.
- 7) Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.
- 8) Active  role  of  Indian  missions  abroad  towards  promoting  India's  trade,  tourism, technology and investment goals has been enhanced.
- 9) Package announced in light of the covid  pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports.

(b): The  main export sectors that showed downward trend during recent  years are Gems and Jewellery, Leather and Leather  Manufactures, Man-Made Yarn/Fabrics/Madeups etc, Readymade Garments of all Textiles, Marine Products and Cotton Yarn/Fabrics/Madeups/ Handloom Products etc. In spite of the pandemic situation there are certain sectors such as Drugs and Pharmaceuticals, Spices, Iron ore, Rice and Other cereals which have shown positive trend in exports.

(c): 'Make  in  India'  initiative  was  launched  on 25 th September,  2014  with  the  objective  of facilitating  investment,  fostering  innovation,  building  best  in  class  manufacturing  infrastructure, making it easy to do business and enhancing skill development. The initiative was further aimed at creating a conducive environment for investment, modern and efficient infrastructure, opening up new sectors for foreign  investment and  forging a partnership between government and  industry. Healthy  FDI  inflows  and  growth  in  emerging  sectors  like  electronics  are  reflective  of  positive outcomes of the initiative.

(d) & (e): Due  to  several  policy  measures  taken  by  the  Government  to  boost  domestic manufactures and other domestic and global factors, India's merchandise imports have decreased by 7.64% to US$ 474.7 billion in 2019-20 from USD 514.1 billion in 2018-19. During the current year (April-December), due to COVID-19 pandemic, India's merchandise imports have decreased by 28.2% to US$ 261.5 billion from US$ 364.2 billion during the same period of the last year.

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