UPPSC PCS - 2021

Among the following countries India's trade balance surplus is maximum with which country in 2019-20 ?

Year Asked: 2021

A
USA
B
China
C
Japan
D
United Arab Emirates

Correct Answer

A. USA

Detailed Explanation

The correct answer is A) USA. In 2019-20, India ran a merchandise trade surplus with the United States of roughly USD 17 billion, while it ran deficits with China, Japan and the UAE.

  • China (B): India's largest deficit partner. Imports from China far exceed exports, with a deficit of around USD 54 billion that year.
  • Japan (C): India ran a deficit here, driven by machinery, electronics and automobile-related imports.
  • UAE (D): A large deficit, mainly because of crude oil and petroleum product imports, which dominate the bilateral trade basket.

The core concept is the bilateral trade balance, which is the difference between exports to and imports from one partner, as distinct from the overall trade balance. Mains GS-III and GS-II questions on India's export diversification, the China deficit and the US-India trade relationship draw on exactly this data. The US surplus has remained India's largest in later years as well, though exact figures shift annually.

Trap: Candidates pick UAE because it is a major export destination for petroleum products. Exports to a partner do not make the balance a surplus once imports from the same partner are netted out.

This question appeared in UPPCS 2021 General Studies Paper I.

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