Question

If India exports goods worth ₹200 crores and imports goods worth ₹300 crores, it will have a:

Options

• surplus of ₹100 crores in balance of trade

• deficit of ₹150 crores in balance of trade

• deficit of ₹100 crores in balance of trade

• None of these

Answer 1

Deficit of ₹100 crores in balance of trade

Explanation:

Balance of Trade = Value of Visible Exports − Value of Visible Imports

= ₹ 200 crore − ₹ 300 crore

= − ₹ 100 crore

A negative outcome indicates an outflow of foreign currency to settle the trade balance, creating a net trade deficit of ₹100 crore.