UPSC CSE Prelims
Question 96
With reference to the international trade of India at present, which of the following statements is/are correct?
- India's merchandise exports are less than its merchandise imports.
- India's imports of iron and steel, chemicals, fertilizers, and machinery have decreased in recent years.
- India's exports of services are more than its imports of services.
- India suffers from an overall trade/current account deficit.
Select the correct answer using the code given below:
View correct answer and explanation
Correct answer: D
Correct Option: D (1, 3 & 4 only)
Explanation: For the years around 2020, India had a merchandise trade deficit, a services trade surplus and a current-account deficit in most relevant periods; imports of key industrial goods did not show the uniform decline claimed.
Statement / Pair / Item-wise Analysis:
1. Correct - India’s merchandise imports exceeded exports in the reference years.
2. Incorrect - Imports of iron/steel, chemicals, fertilisers and machinery did not all decline consistently.
3. Correct - India’s service exports exceeded service imports, creating a services surplus.
4. Correct - India generally ran a current-account deficit over the relevant recent years.
Option-wise Analysis:
A. Incorrect-includes incorrect item 2 (Imports of iron/steel, chemicals, fertilisers and machinery did not all decline consistently); omits correct item 3 (India’s service exports exceeded service imports, creating a services surplus); omits correct item 4 (India generally ran a current-account deficit over the relevant recent years).
B. Incorrect-includes incorrect item 2 (Imports of iron/steel, chemicals, fertilisers and machinery did not all decline consistently); omits correct item 1 (India’s merchandise imports exceeded exports in the reference years); omits correct item 3 (India’s service exports exceeded service imports, creating a services surplus).
C. Incorrect-omits correct item 1 (India’s merchandise imports exceeded exports in the reference years); omits correct item 4 (India generally ran a current-account deficit over the relevant recent years).
D. Correct-includes all and only valid statements/items 1, 3, 4.
Review note: Time-sensitive: an unusual current-account surplus emerged during parts of 2020 amid the pandemic; read this as the pre-exam “recent trade” trend.