India's trade deficit widens, rupee weakens!
India's trade deficit widened to $23 billion in january from $21.9 billion in december and $16.6 billion a year earlier. The widening deficit also led to the rupee weakening to Rs 86.3 per dollar in january from Rs 85 per dollar in the previous month.
During April to january, overall merchandise exports rose 1.4% to $358.9 billion from $354 billion in the same period last year. But imports grew faster and rose 7.4% to $601.9 billion from $560.3 billion last year. As a result, the trade deficit widened to $243 billion during the period from $206.3 billion last year. However, services exports grew by 16.5% in december (compared to 13.9% in November), while growth in services imports declined to 13.8% from 26% earlier. As a result, the services trade surplus in december was $19.1 billion, up from $16 billion in the year-ago period and $14.8 billion last month.
Fluctuation in exports: What is the reason?
This year there has been a lot of volatility in exports. Initially, exports were good, but later it declined. There was a slight increase in october 2024, but then exports decreased every month till January.
According to the Crisil report, there are many problems in the world, such as the talk of increasing taxes by the donald trump government in the US. This can have a bad effect on India's exports. So far this year, we have imported more goods from other countries and sold less goods to them. This is increasing our trade deficit. America can increase tax on goods coming from China. Also, China's economy is also slowing down. Due to this, china will try to sell cheap goods in other Asian countries including india, this can increase problems for India.
The good thing is that we are exporting a lot of services (such as software). Also, indians working abroad are also sending a lot of money to India. This is giving some support to our economy. But, india will have to keep an eye on its trade deficit and find new ways to increase exports.
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