Exports slip 0.8% in December 2020; trade deficit widens to USD 15.71 billion

The trade deficit in December widened to $15.71 billion, as imports grew by 7.6% to $42.6 billion due to a sharp increase in gold imports. Gold imports rose 81.8% in December 2020 to $2.01 billion.

Other items that witnessed an increase in imports include electronic goods, vegetable oil, chemicals, textile yarn and fabric, machine tools, pharmaceuticals and precious & semi-precious stones.

What is Trade Deficit:

A trade deficit occurs when a country’s imports exceed its exports during a given time period. It is also referred to as a negative balance of trade (BOT).

A country’s total trade is measured by the sum of its imports (products it buys from other countries) and its exports (products it sells to other countries). Countries trade both goods (such as T-shirts or iPhones) and services (such as jobs and education).

When a country imports more than it exports, it runs a trade deficit. A country that does the reverse—exports more than it imports—runs a trade surplus. The United States has bilateral trade deficits with some trade partners and surpluses with others, but overall, it has a trade deficit, of $621 billion in 2018.

Read more at: The Hindu; Economic Times