Question

What do you mean by the favourable balance of trade? Is India’s trade favourable?

Answer 1

Hint: The movement of goods or services from one individual or institution to another, usually in return for property, is known as trade. A market is a mechanism or network that allows for trade, according to economists.

Complete answer:
The Balance of Trade is an economic indicator that is determined by subtracting the total value of manufactured goods from the total value of exported goods. This equilibrium explains where the country is in terms of trade ties with other countries.

If the balance is favourable, the country exports more than it imports; if the balance is negative, then it is the other way round. Although if the trade balance is favourable, then it is not necessarily dependent on a favourable balance.

Since India has a 7,517-kilometer coastline, it is well-suited to foreign trade and commerce. India is located in the middle of the Far East and the Middle East. The Trans-Indian Ocean routes linking Europe's industrialised countries in the west and east Asia's underdeveloped countries pass close by. Because of the central location in South Asia, India is well-positioned to trade with Australia as well as the countries of Africa, the Middle East, and the Far East. As a result, India controls the Indian Ocean and wields significant economic power.

Note: A nation is said to have a favourable balance of trade, or a trade surplus if its exports exceed its imports. In contrast, if imports exceed exports, there is an unfavourable trade balance or a trade deficit.