PYQ Question

With reference to the international trade of India at present, which of the following statements is/are correct? 1. India’s merchandise exports are less th

August 6, 2026 en

With reference to the international trade of India at present, which of the following statements is/are correct? 1. India’s merchandise exports are less than its merchandise imports. 2. India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years. 3. India’s exports of services are more than its imports of services. 4. India suﬀers from an overall trade/current account deficit. Select the correct answer using the code given below:

A. 1 and 2 only
B. 2 and 4 only
C. 3 only
D. 1, 3 and 4 only

Answer: D

Explanation

Merchandise trade deficit is the largest component of India’s current account deficit. As per RBI’s data, India’s Merchandise exports during April-August 2019-2020 was USD 133.14 billion, as compared to USD 210.39 billion of imports during the same period. Hence statement 1 is correct. Commodity-wise composition of imports between 2011-12 and 2018-19 shows that imports of iron and steel, organic chemicals, industrial machinery have registered positive growth rates as % of share in imports. Hence statement 2 is incorrect. India’s net services (service exports – service imports) has been in surplus. India’s Service exports during April-August 2019-2020 was USD 67.24 billion, as compared to USD 39.25 billion of imports during the same period. Hence statement 3 is correct. Current Account Deficit (CAD) or trade deficit is the shortfall between exports and imports. As per Economic Survey 2019-20, India’s CAD was 2.1% in 2018-19, and 1.5% of GDP in H1 of 2019-20. Hence statement 4 is correct. Therefore, the correct answer is (d) 1, 3 and 4 only.