BALANCE OF TRADE

HEMANTH N
20EPMB046
BALANCE OF TRADE

Balance of trade is the difference

between the value of a country's
imports and exports for a given
period and is the largest component
of a country's balance of payments

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BALANCE
 FEATURES OF BOT

• EXPORT: Export of goods means

movement of goods from domestic country
to foreign country
• IMPORTS: Imports of goods means movement
of goods from foreign country to domestic country.
• VISIBLE GOODS: The goods must be seen
and touched, counted, measured and
weighed.
• MATERIAL GOODS: Goods constitute our
imports and exports must be material

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BALANCE
TYPES OF BOT

• FAVOURABLE BALANCE / SURPLUS:

where exports are greater than imports
• Unfavourable balance / deficit:
where imports are greater than exports
• Equilibrium balance:
where imports are equal to exports

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BALANCE
IMPORTANCE OF BOT

• It determines the health of the economy and its

relationship with the rest of the world.
• The balance of trade statistics reveals a country's
imports and exports and how it competes in the
global market.
• The trade balance is also taken into account when
calculating gross domestic product.
• It is used to identify whether the country has trade
deficit or surplus

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BALANCE
IMBALANCE OF TRADE

• A country that imports more goods and

services than it exports in terms of
value has a trade deficit or a negative
trade balance.
• Example: If India imported 100crore rupees of
goods in 2019, but exported 50crore rupees of
good to the other countries, it means there is
BOT deficit of 50crore rupees.

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BALANCE
EFFECTS OF DEFICIT

• Negative Balance of Trade: The high

demand for foreign exchanges, the
domestic currency weakens over a period
of time.
• The citizens of the country get a variety of
products at competitive prices. Excessive
dependence on imported goods leads to
less demand for domestic goods

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BALANCE
BOT IN INDIA

• India has been recording sustained trade

deficits since 1980 mainly due to the strong
imports growth
• BIGGEST TRADE DEFICIT : China, Saudi
Arabia, Iraq and Indonesia.
• BIGGEST TRADE SURPLUS :US, United
Arab Emirates, Hong Kong, United Kingdom

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BALANCE
THANK YOU