Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

Abstract

The case is about widening of the trade deficit in India as a consequence of the COVID-19 pandemic. The outbreak of the pandemic disrupted normal economic activity and life in India. The travel and transport curbs imposed in the wake of a nationwide lockdown had an adverse impact on the country's economic growth. Indian trade was severely impacted as businesses became highly vulnerable to the unfolding economic crisis. For the fiscal year 2020, India reported a decline in exports and imports, with the trade deficit narrowing down to USD152.88 billion as against USD184 billion in the previous financial year. In the first quarter of 2020-21, the country reported merchandise trade surplus, which was attributed to the pandemic-induced contraction in the economy, especially with the low demand and import of goods due to the lockdown. For the period April-September 2020, India's trade deficit came down due to a massive fall in local and global demand amid the pandemic-induced lockdown. From October 2020 India again started experiencing an increase in the volume of trade deficit. In February 2021, trade deficit widened as exports grew marginally by 0.67% year-on-year to USD27.93 billion while imports increased 6.96% year-on-year to USD40.54 billion, leading to a trade deficit of USD12.62 billion. While analysts were expecting exports to strengthen once the uncertainty over COVID-19 came to an end, exporters and business houses were waiting for a new Foreign Trade Policy to be announced.

Teaching and learning

This item is suitable for postgraduate courses.

Time period

The events covered by this case took place in 2019-2021.

Geographical setting

Region:
Asia
Country:
India

About

Abstract

The case is about widening of the trade deficit in India as a consequence of the COVID-19 pandemic. The outbreak of the pandemic disrupted normal economic activity and life in India. The travel and transport curbs imposed in the wake of a nationwide lockdown had an adverse impact on the country's economic growth. Indian trade was severely impacted as businesses became highly vulnerable to the unfolding economic crisis. For the fiscal year 2020, India reported a decline in exports and imports, with the trade deficit narrowing down to USD152.88 billion as against USD184 billion in the previous financial year. In the first quarter of 2020-21, the country reported merchandise trade surplus, which was attributed to the pandemic-induced contraction in the economy, especially with the low demand and import of goods due to the lockdown. For the period April-September 2020, India's trade deficit came down due to a massive fall in local and global demand amid the pandemic-induced lockdown. From October 2020 India again started experiencing an increase in the volume of trade deficit. In February 2021, trade deficit widened as exports grew marginally by 0.67% year-on-year to USD27.93 billion while imports increased 6.96% year-on-year to USD40.54 billion, leading to a trade deficit of USD12.62 billion. While analysts were expecting exports to strengthen once the uncertainty over COVID-19 came to an end, exporters and business houses were waiting for a new Foreign Trade Policy to be announced.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Time period

The events covered by this case took place in 2019-2021.

Geographical setting

Region:
Asia
Country:
India

Related