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:
✓ Correct answer: d) 1, 3 and 4 only
ExplanationStatement 1 is correct : India has historically faced a trade deficit in merchandise trade, meaning that the value of merchandise imports exceeds the value of merchandise exports.This is primarily due to India’s reliance on imports of crude oil, gold, electronics, and machinery, which are higher in value compared to its exports of textiles, gems, jewelry, and phar- maceuticals.Statement 2 is incorrect : India’s imports of iron and steel, chemicals, fertilisers, and machinery have not decreased in recent years.These imports have remained significant due to domestic demand and industrial requirements.For example, India imports a large quantity of fertilisers to meet agricultural needs and machinery for industrial and infrastructure develop- ment.Statement 3 is correct : India has a surplus in services trade, meaning that the value of services exports (e.g., IT services, software, business process outsourcing) exceeds the value of services imports.The services sector is a major contributor to India’s economy and helps offset the trade deficit in merchan- dise trade.Statement 4 is
Practice more Economy PYQs
Attempt a free 10-question quiz or browse the full Economy previous-year-question bank with instant answers and explanations.
📈 Economy PYQs →