Consider the following statements regarding India's trade and imports:

1. India’s goods trade deficit is consistently increasing post-COVID pandemic.

2. India’s gold and silver imports have been consistently increasing for the last five years.

Which of the statements given above is/are correct?

The correct answer is option 4.

In News

• Recent trade data shows that India’s trade deficit has declined to a 42-month low of $14.05 billion in February 2025, contradicting the claim that it has been consistently increasing post-COVID. Additionally, gold and silver imports have fluctuated over the years, with a recent decline in February 2025.

Key Points

• India’s trade deficit has not consistently increased post-COVID.
  • While India's trade deficit widened in some months, recent data shows a declining trend in early 2025.
  • February 2025 recorded a 42-month low trade deficit of $14.05 billion, significantly lower than January 2025 ($22.9 billion) and February 2024 ($19.5 billion).
    • Hence, Statement 1 is incorrect.
• India’s gold and silver imports have not been consistently increasing for the last five years.
  • Gold and silver imports in February 2025 stood at $2.7 billion, the lowest since June 2024.
  • The data indicates fluctuations rather than a consistent rise, influenced by factors like global prices, demand, and government policies on import duties.
    • Hence, Statement 2 is incorrect.

Additional Information

• Major factors influencing trade deficit:
  • Fluctuations in crude oil imports.
  • Government policies on gold and silver imports.
  • Slowdown in global trade impacting exports.
• India's export and import performance (February 2025):
  • Exports: $36.9 billion (YoY decline of 10.84%).
  • Imports: $50.9 billion (22-month low).
  • Gold & silver imports: $2.7 billion (declined from previous months).
  • Crude & petroleum imports: $11.89 billion (lowest since July 2023).
• Current Account Impact: Analysts predict a current account surplus of around $5 billion in Q4 FY2025, equivalent to 0.5% of GDP.