Here’s why the latest US merchandise trade deficit data has come down sharply

In FY 2018-19, the United States became India’s biggest trading partner surpassing China. While India’s exports to the US increased, India also bought more goods from the US. As a result, the merchandise trade deficit that the US has with India has come down sharply.

Five years merchandise trade data starting April 2014 showed that India’s exports increased at a high rate. During FY14-15 India sold goods worth USD 52 billion to the US but India was buying lesser goods from that country. India’s import stood at over USD 20 billion in FY2014-15. It was nearly USD 35.5 billion in FY2018-19.

The difference between this selling that is exports and buying of goods which is imports is known as trade deficit.