Main Causes of Trade Deficit in India
What are the main reasons for increasing trade deficit in India ?
Contents
Main Causes of Trade Deficit in India
Following are the main causes of trade deficit in India :
1. Lack of Integrated Efforts : There is found a shortage of integrated efforts. Due to it India’s imports are large and exports are very few. It increases trade deficit.
2. High Costs : In India costs are very high and due to it Indian firms feel difficulty in making a place in the international market. Higher costs increase the various costs.
3. Poor Quality Image : India’s image in the foreign countries is of poor quality. Although many quality control statutes have been enacted however, quality of our products is inferior. Inferior quality of inputs, technology etc. affect quality of products.
4. Infrastructural Bottlenecks : There is a shortage of energy and power, transport, communication facilities. Goods cannot be produced at prescribed time due to shortage of energy.
In addition to above following are some other causes of trade deficit :
(i) Organisational weakness in export sector of India,
(ii) Problems of proper supply,
(iii) Uncertainties, procedural complexities and institutional rigidity,
(iv) Insufficient trade information system.
Important Link
- Kinds of Disequilibrium in Balance of payments (BOP)
- Measures Adopted by Government of India to Correct its Adverse BOP
- Balance of Payments: Meaning, Definitions, Characteristics and Uses
- Different Terms of Payment used in Foreign Trade
- Characteristics of Export Documents
- Letter of Credit: Meaning, Importance and Required Document
- Documents used in export trade its types and contents
- Restrictions on deposits to foreign currency accounts
- What is the obligation to submit foreign currency?
- Foreign Exchange: Concept, Example and Needs
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