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.

According to Trump the high trade deficit that US has with India is unfair and he has been demanding a balanced trade relationship.

He has repeatedly made statements against India’s high tariffs because it made goods produced in the US costly in Indian market and this strategy seems to have worked.

If you look at the latest US trade deficit data with India, you will see that it has come down sharply to USD 17 billion in financial year ending March 31, 2019.