Trade surplus

Subject: Economy

Context:

For the first time since 2002, India’s merchandise trade balance turned surplus of $790 million in June

Reasons:

• This is a rare occurrence because since 1976-77, there has not been a single year when India did not incur a substantial merchandise trade deficit.
• Improvement in trade balance has been driven mainly by a sharper decline in imports. This is a warning sign for the economy as the decline in imports, especially in merchandise goods, points towards a contraction of demand in the real economy