Revised EXIM Data

Subject : Economy

Section :External Sector

Concept :

India’s foreign trade data for the first eight months of 2022-23 have been significantly revised, with the import bill being scaled up or down by at least two billion dollars in each of those months, in comparison to the preliminary estimates issued by the Union Commerce Ministry.
The total merchandise exports between April and November are revised at $298.3 billion, nearly $12 billion higher than the original monthly data.
The import bill in those eight months is now estimated at $493.5 billion, about $1.7 billion higher than the initial numbers.
The trade deficit in the first eight months of the year is $10 billion lower than indicated by adding up monthly preliminary estimates.
Economists believe that such wide variations in data are unusual and make policy formulation difficult, particularly when managing the current account deficit, which is being fueled by rising imports and a feared slowdown in exports amid a global recession.

Trade Deficit

Trade deficit or negative balance of trade (BOT) is the gap between exports and imports.
When money spent on imports exceeds that spent on exports in a country-a trade deficit occurs.
The opposite of a trade deficit is a trade surplus.
India tends to have a trade deficit every year because it imports far more (in terms of value, measured in $) than it exports.
A trade deficit implies that Indians need dollars/forex more than the rest of the world needs rupees for the trades to settle.
A trade deficit puts pressure on the rupee’s exchange rate against the dollar and persistently high trade deficits tend to weaken the rupee’s exchange rate.
It is a part of the Current Account Deficit.

Current Account Deficit.

The current account records exports and imports in goods and services and transfer payments.
It represents a country’s transactions with the rest of the world and, like the capital account, is a component of a country’s Balance of Payments (BOP).
There is a deficit in Current Account if the value of the goods and services imported exceeds the value of those exported.
Major components are:
- Goods,
- Services, and
- Net earnings on overseas investments (such as interests and dividend) and net transfer of payments over a period of time, such as remittances.
Current Account Balance = Trade gap + Net current transfers + Net income abroad.
Trade gap/Trade deficit = Exports – Imports.