Exports drop by 12.2% in 2022

#GS-03 External Sector

Trade Deficit:

Trade deficit or negative balance of trade (BOT) is calculated as the difference between exports and imports when imports are higher than exports.
The opposite of trade deficit is termed trade surplus and it occurs when exports are higher than imports.
Trade deficit forms a part of the Current Account Deficit.

The current account deficit is the measure of a country’s trade when the value of the goods and services it imports is more than the value of the products it exports.
Current account is calculating using the formula (X-M) + NI + NT
Where X-M stands for trade balance, X, the value of Exports and M, the value of Imports.
NI is the net income from abroad which mainly includes income from foreign countries such as interests and dividends.
NT is the net current transfers which consist of government transfers such as foreign aid.
The current account is representative of a country’s foreign transactions and along with the capital account, forms a country’s balance of payments (BOP).

The balance of payments (BOP) can also be called as the balance of international payments.
It is a statement which includes all transactions made between entities in one country and the rest of the world over a fixed period of time, such as a quarter or a year.

India exported goods worth $34.48 billion in December 2022 which showcases a 75% rise from November 2022.
However, it’s a steep 12.2% dip from the same figure last year.
This is the second time in three months that the value of exports has decreased in a year-on-year basis, the other being October 2022.
Despite a dip in two months, merchandise exports in the first nine months of 2022-23 showed a rise of 9.1% than a year ago at $332.76 billion.
Goods imports, on the other hand, had increased by about 25% at $551.7 billion.

Exports from 19 of 30 major exporting sectors shrank in December, including;

Cotton yarn and handlooms (-40.4%),
handicrafts (-36.9%),
petroleum products (-26.9%),
plastic and linoleum (-26.23%),
gems and jewellery (-15.2%).

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