Published on: March 4, 2022




Trade Deficit of India is expected to increase



  • Negative Balance of Trade
  • Refers to the amount of international trade that takes place between countries throughout the world
  • When a country’s imports surpass its exports in a fiscal year, it is considered to be a trade deficit


  • When a country cannot produce what it requires and must import things from other countries while paying import taxes
  • When businesses are involved in the production of goods in another country. The raw resources used in manufacturing are exported, whilst the final commodities brought into the country are imported.


  • Raises the standard of living at first because residents have access to a wider range of things.
  • If the trade imbalance remains, the government will have to obtain additional foreign exchange to close the gap, causing the local currency to fall.
  • To close the import-export imbalance, a larger trade deficit necessitates the recruitment of foreign investors.
  • Because more imports mean fewer job prospects, a bigger trade imbalance causes jobs to be outsourced to other countries.
  • Demand for imported items leads to a decrease in demand for locally produced goods, resulting in factory closures and job losses.