Unfavorable global scenarios led to a 42-month low trade deficit driven by lower exports and imports, as per the data from the Ministry of Commerce released on Monday. The fall comes after a 30 percent reduction in oil exports to Europe and a 60 percent decrease in gold imports. More facts stated show a decline in exports compared to February last year, from $41.4 billion to $36.9 billion.
The data reveals that the decline has not been due to a fall in imports, but also majorly due to reduced exports and the unstable global scenario with the ongoing Ukraine-Russia war, and tensions in the Middle East. Changes in leadership in the US and the subsequent “tariff war” started by President Donald Trump have shaken economies across the world.
The overall picture however is not as grim as it looks, and the Union commerce secretary, Sunil Barthwal, explains it by saying,
This has been a difficult year in terms of trade. Still, we are on the right track of meeting our target of crossing $800 billion in trade, which was $778 billion last fiscal. Non-petroleum products are the key strength of Indian trade and that is growing at over 6%. Except gems and jewellery, all key sectors are growing well. Our focus is on increasing the services sector, which has grown at 14%. Overall exports are doing well.
ICRA’s chief economist Aditya Nayar also expressed that there are hopes for a current account surplus in quarter 4 of the ongoing year. What seems hopeful is the fact that our imports have reduced, and in the current situation where geopolitics is defined by uncertainty it is important to maintain “strategic autonomy” in terms of trade, which is signaled in the latest trends.
