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:
Explanation
Official Key Status: UPSC dropped this question from final scoring due to period-specific trade data fluctuations, but as per official trade statistics, statements 1, 3, and 4 are correct while statement 2 is incorrect.
– Statement 1 is correct: India consistently experiences a significant merchandise trade deficit, where physical goods imports far exceed exports.
– Statement 2 is incorrect: Capital and industrial goods imports like machinery, iron and steel, and chemical fertilizers exhibited general expansion rather than a uniform decrease over the preceding multi-year trade cycles.
– Statement 3 is correct: India maintains a robust surplus in the service sector (anchored by IT, software, and business services), where services exports consistently exceed services imports.
– Statement 4 is correct: Despite service export surpluses, the heavy merchandise trade deficit typically leaves India with an overall trade and current account deficit.
Hence, factually the correct combination is 1, 3 and 4 only — Option D.