Trade Deficit of India

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Trade Deficit of India


On 15th October 2018, Ministry of Commerce & Industry, Department of Commerce has released its press release about India's foreign trade in September 2018. According to press release India ‘overall export in first six months of financial year 2018-2019* was estimated to be USD 265.39 Billion, showing growth of 17.38% over the same period last year.



At the other side overall imports of first six months of financial year 2018-19* was estimated to be USD 321.40 billion, exhibiting a growth of 19.41% over the same period of last year.



Further statistics are shows that our trade deficit is continuously increasing critically. In financial year India's trade deficit widened to $156.8 billion in 2017-18 compared with $108.5 billion in FY 2016-17. Increasing trade deficit is biggest issue for our economist, policy maker and for the government. Despite of taking many steps to reduce it. we are not getting any satisfactory statistics in its status. our service industry pushing hard and shown satisfactory statistics, but we are running behind in manufacturing industries.



Manufacturing industry need to grow to reduce trade deficit. India is second largest country in population, seventh largest in geographical area, we have huge manpower and natural resources to deploy, our diplomatic relationships are much higher than the previous years, we are growing surplus food grain and the world look us as a biggest market not as biggest manufacturer.



India is agonizing to be a manufacturing hub like china but other side we are not even manufacturing to fulfill our own needs. We are even importing very ordinary things of our livelihood/lifestyle from china which do not need high technology in their production i.e stationery products, Plastics made products for decoration purpose, electronic appliances, Footwears and their parts. Furniture, Toys, games and sports equipment. mobile accessories, light machinery, packing materials, etc. China is our biggest trade partner and with only china our trade deficit was almost USD 51.72 Billon last year.





Micro/cottage Industries:



India need to grow its Micro/cottage Industries and small industries, Micro/cottage Industries industries/factories is one only solution to get quick result. if our Micro/cottage Industries grow enough to fulfill non-technical/ordinary things need (as mentioned above) in first step we can see a big fall in trade deficit and in another next step we will be able to export more. In the last year and in running year Cotton Yarn/Fabrics/made-ups, Handloom Products, Plastic & Linoleum, and another similar products import was almost 32%. These products could be handled by our Micro/cottage Industries/small industries. Micro/cottage Industries required less government support, less investment, less skilled workforce. To develop this sector government only need to spread awareness and few skill development programs. It is fully depending on the Indian citizens.





Bank/PSU and Heavy Engineering Industries:



Industrial Machinery, Power Generation Equipment, Automobile Industry, Rail Equipment, Aircraft Manufacturing, Defense equipment, Ship Building, Machine Tools Industry are come under this segment. all they need highest resources, technology, finance, Market research, quality control, highly skilled workforce and lots of government approvals so that any new establishment need long time. it can't show any quick results to less trade deficit. however, we can't ignore this segment because it provides Infrastructure to all other segments i.e Electricity, machineries, raw materials, transportation, finance, security, education, technology etc.



In short, Micro/cottage Industries/small/mid-level industries and heavy industries are dependent to each other Just as government must provide platform to grow Micro/cottage Industries/small/mid-level industries by its ease to do business policy Similarly Indian government has to focus in development of our heavy industries.



Petroleum Products:



India import petrol/Diesel more than 26.76% of its total import, which is a huge percentage for one single commodity. our any cut down in it can decrease import and show quick effect on trade deficit. to fight on this front our government has started to work on biofuel or Methanol. 

Read : Methanol economy of India




Conclusion: Growing trade deficit can be cut down quickly by taking few initiatives. Our investors, innovators, manufacturers can play vital role to solve biggest economic threat. We need develop an environment in which our Micro/cottage Industries can grow faster and can contribute in India's GDP.
Other Related :
Liberalization, Globalization & Privatization in Indian Economy
Second anniversary of Demonetization
Goods and service Tax
Methanol economy of India

E-Commerce In India

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