The Indian government is keeping a watch on the growing trade deficit to check if there is a disproportionate increase in the gap against any one country, Finance Minister Nirmala Sitharaman has said.
“Trade deficit is actually growing," she said.
"It is growing across the board, meaning we are importing a lot more than exporting. And the net is definitely going against us. But, we're also keeping a watch as to if there's a disproportionate increase against any one country,” Sitharaman said, responding to a question on the increase in trade deficit against China to nearly USD 87 billion.
India's trade deficit with China widened in 2021-22 and continues to do so in 2022-23, the Ministry of Commerce data showed. In the financial year 2021-22 (FY22), the trade deficit was recorded at USD 72.9 billion, up nearly USD 29 billion from FY21's figure of USD 44 billion. In 2020-21, the trade deficit was recorded at USD 48.6 billion.
“Equally, if you look into the items that are imported, they are less of final consumption goods and more of intermediaries. And when I say more of raw materials and intermediate goods, it's also got a potential for value addition and exports,” Sitharaman said.
“So, I wouldn't want to immediately get anxious about this net deficit, meaning imports being far higher than exports, because I think carefully if you look at it, the kind of imports that are happening are very essential, also for our industrial activity and for our value addition for exports purposes,” she said.