Indian Needs $800 Million per Trade Deficit

Standard and Poor’s ratings suggests that there has been a cut in India’s sovereignty and this would weaken the foreign investments for India.

The economic theory states that the trade deficit in goods can be compensated by the trade surplus in services. A report done by Business Line says, “despite services accounting for 60 per cent of India’s GDP and much hype about India’s IT exports, the share of services in India’s total exports of goods and services is not more than one-third.”

Business Line also says, “It is time Indian policymakers and businesses made concerted and coordinated attempts to tackle India’s trade imbalances before we are faced with a serious BOP (balance of payments) crisis, like the one in 1990-91.” There seems no hope for India to fix its export backlog.