The RBI releases data on foreign trade which is captured by the Directorate General of Commercial Intelligence and Statistics (DGCIS) of the Ministry of Commerce & Industry based on flows/movements of goods across the customs frontiers of India. As per the latest data, India‘s Trade Deficit touched a record high in 2021-22 in rupee terms. In its latest World Economic Outlook report, the International Monetary Fund (IMF) highlighted that the global economy continues to face steep challenges because of the lingering effects of three powerful forces- the Russian invasion of Ukraine, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China. The lingering effects of the COVID-19 pandemic are also weighing the projections. Adding that a growing share of economies is in a growth slowdown or outright contraction, IMF has forecasted that global growth to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic said the report. For India, IMF has projected the growth to be 6.8% in the ongoing fiscal year (2022-23) while the growth was 8.7% in 2021-22. As per the previous World Economic Outlook Report from July 2022, India’s growth was estimated at 7.4% in 2022-23, which has been downgraded by 60 basis points to 6.8% in the latest forecast. India’s projected growth for 2023-24 is 6.1%. Not only IMF but the growth projections were also revised downward by other agencies including the World Bank and the Reserve Bank of India (RBI). Since trade balance plays a key role in a country’s GDP, we look at India’s trade balance over the years in this story. The trade balance is the difference between the value of exports and that of a country’s imports for a given period. If the trade balance is positive, it means more goods are exported than that is imported, which indicates that the country has a trade surplus. If it is negative, it indicates that the country has a trade deficit, or the money spent on imports is more than that spent on exports. A trade deficit can be a result of lesser production because of which the country is dependent on imports, or companies produce outside the country and import the finished goods, or due to weaker currency. India’s trade deficit for Goods is highest with 14.2 lakh crore rupees in 2021-22 The RBI releases data on foreign trade which is captured by the Directorate General of Commercial Intelligence and Statistics (DGCIS) of the Ministry of Commerce & Industry based on flows/movements of goods across the customs frontiers of India. It must be noted that this data pertains to only goods trade & does not include services. India’s provisional trade deficit in 2021-22 was Rs. 14.2 lakh crore, the highest ever. Compared to 2020-21, the trade deficit has increased by 88.3%. India’s trade deficit crossed Rs. 10 lakh crores in 2012-13, 2017-18, 2018-19, 2019-20, and 2021-22. Since 2017-18, the trade deficit has been above Rs. 10 lakh crores in each of the years, except in 2020-21 since the exports and imports were comparatively lower due to the COVID-19 pandemic-related restrictions. In 2020-21, the trade deficit had reduced to Rs. 7.57 lakh crores from Rs. 11.4 lakh crores in 2019-20. Since 2000-01, the trade deficit of the country has increased by more than 50 times in rupee terms. Trade deficit for both oil and non-oil products touched Rs. 7 lakh crores in 2021-22 India is the third largest consumer of oil globally accounting for 5% of global consumption and with less than 1% of global production. India is a net importer of oil which explains the deficit in trade balance with respect to oil products. However, the trade balance for non-oil products was positive in the period from 1991-92 to 1997-98 and 2000-01 to 2003-04. Until 2014-15, oil products were the drivers of the trade deficit. However, in 2015-16, 2017-18, and 2021-22, the contribution of non-oil products toward the deficit was more. The trade deficit of both oil and non-oil products touched Rs. 7 lakh crores for the first time in 2021-22. Both, the imports and exports of oil and non-oil products were the highest in the same year. In the 22 years between 2000-01 and 2021-22, the trade balance of oil products has widened 11 times from a deficit of Rs. 62,955 crores to Rs. 7.04 lakh crores. In 2020-21, the trade deficit of oil products was Rs. 4.2 lakh crores which had narrowed by 33.5% from Rs. 6.33 lakh crores in 2019-20, and again widened by 67% in 2021-22. On the other hand, the trade balance of non-oil products was a surplus of Rs. 35,653 crores in 2000-01 which dropped to a deficit of Rs. 23,035 crores in 2004-05.