Lok Sabha Question No. 2841 (UNSTARRED), answered on 2023-08-07
Subject: International Loan
Ministry: FINANCE
Asked by: Sanjay(Kaka) Ramchandra Patil

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 2841

DUE FOR ANSWERED ON 7 th  AUGUST, 2023

## INTERNATIONAL LOAN

## 2841. SHRI SANJAY KAKA PATIL:

Will the Minister of FINANCE be pleased to state:

- (a) the status  of  current  trade deficit and the measures taken/being  taken by  the Government to reduce it;
- (b) whether  the  Government  has  identified  any  targets  for  the  coming  years,  if  so,  the  details thereof;
- (c) whether  the  balance  of  payments  on  international  loans  has  been  affected  due  to  the appreciating value of the dollar; and
- (d) if so, the details thereof and the interest likely to be on the new loans sanctioned by the World Bank for India in 2023 and the manner in which the said loan is likely to be paid?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) The value of overall  (merchandise  plus  services)  balance  of  trade  during  current  year  2023-24 (April-June) and 2022-23 (Quarter 1) is as follows:

Table 1: Trade deficit for India

(Value in US$ Billion)

| Years                 |   Export |   Import |   Balance of Trade |
|-----------------------|----------|----------|--------------------|
| 2022-23 (April-June)  |   197.08 |   228.56 |             -31.49 |
| 2023-24 (April-June)* |   184.73 |   204.64 |             -19.91 |

Source: DGCI&S and RBI* Provisional

The government is undertaking several initiatives  to strike  a balance  between  imports  and  exports, which inter-alia include: -

- (i)  Actively  working  with  the State  Governments/Union  Territories,  Industry  Associations,  Export Promotion  Councils,  India's  Mission  abroad  and  all  other  stakeholders  to  create  an  enabling environment to exports from the Country.
- (ii) A dynamic Foreign Trade Policy 2023 has been announced to accommodate the emerging needs of the time.
- (iii) Districts as Export Hubs has been launched 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.

(iv)  Interest  Equalization  Scheme  on  pre  and  post  shipment  rupee  export  credit  has  also  been extended upto 31-03-2024.

(v) Assistance provided through several schemes to promote exports, namely, Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme.

(vi) Remission of Duties and Taxes on Exported Products (RoDTEP) scheme has been implemented since 01.01.2021. With effect from 15.12.2022, uncovered sectors like pharmaceuticals, organic and inorganic  chemicals  and  article  of  iron  and  steel  has  been  covered  under  RoDTEP.  Similarly, anomalies in 432 tariff lines have been addressed  and the corrected rates have been implemented with effect from 16.01.2023.

(vii)  Common  Digital  Platform for Certificate  of  Origin  has  been  launched  to  facilitate  trade and increase Free Trade Agreement (FTA) utilization by exporters.

As regards imports,  the  Government  has  been  monitoring  and  sensitizing  various  stakeholders  and following broad strategy has been followed:

(i) Addressing  domestic  supply  rigidities  and  looking  at  domestic  production  opportunities /enhancement of capacity;

- (ii) Timely use of trade remedy options;
- (iii) Adoption of mandatory technical standards;
- (iv) Enforcing rules of origin;
- (v) Tariff measures /inverted duty correction;
- (vi) Import data monitoring on a monthly and annual basis to identify significant changes in import basket and monitor surges in imports;

(vii) Quality Control Orders have been issued from time to time by various Ministries/ Departments of  the  Government  for  ensuring  availability  of  quality  products  by  stipulating  conformity  of  the products to Indian Standards. These orders also help in containing substandard goods imports.

(b) An export target of US$ 2 trillion has been set for year 2030 for India. No target for trade deficit has been fixed so far.

(c)   At end-March 2023, India's external debt was placed at US$ 624.7 billion as against US$ 619.1 billion as at end-March, 2022. Valuation gains due to the appreciation of the US dollar vis-à-vis the Indian  rupee  and  major  currencies  such  as  Yen,  SDR,  and  Euro  were  placed  at  US$  20.6  billion. Excluding the valuation effect, external debt would have increased by US$ 26.2 billion instead of US$ 5.6 billion at end-March 2023 over end-March 2022.

(d)  The  reference  rate  for  interest  payment  for  any  new  World  Bank  loans  will  be  the  prevailing Secured  Overnight  Financing  Rate  (SOFR)  plus  variable  spread  as  per  repayment  cycle  of  World Bank loans.