Among the following countries India's trade balance surplus is maximum with which country in 2019-20?
- (a)USA
- (b)China
- (c)Japan
- (d)United Arab Emirates
Correct — A, USA. 'Trade balance surplus' means a country's exports to a partner exceed its imports from that partner. In 2019-20 India's merchandise exports to the United States (roughly $53 billion) were well above its imports from the US (roughly $36 billion), leaving India with a large trade surplus (of the order of $17 billion) — the US being India's biggest single export destination. With the other three partners India ran deficits, not surpluses (it imports far more than it exports from them). So among the given options India's trade balance surplus was maximum with the USA.
- (b)China — Wrong — India runs its single largest trade deficit with China (imports of machinery, electronics and chemicals vastly exceed Indian exports), the opposite of a surplus.
- (c)Japan — Wrong — India has a trade deficit with Japan too, importing more (vehicles, machinery, steel) than it exports there.
- (d)United Arab Emirates — Wrong — although two-way trade with the UAE is very large, India's imports from it (crude oil, gold) leave the balance in deficit/near-balance, not a large surplus.
The balance of trade (BoT) is the value of a country's merchandise exports minus its merchandise imports with a partner: positive = trade surplus, negative = trade deficit. India overall runs a merchandise trade deficit, but with a few partners — notably the United States — it exports more than it imports and so enjoys a surplus. The US has for years been India's top export market.
Read 'surplus' carefully: three of the four options (China, Japan, UAE) are countries India buys heavily from, so India runs deficits there. Only the USA — India's largest export destination — yields a clear surplus, making it the odd one out and the answer. Exact dollar figures vary slightly by data source (DGCI&S vs US data), but the direction is unambiguous.
- Trade surplus = exports exceed imports; trade deficit = imports exceed exports.
- In 2019-20 the USA was India's largest export destination, giving India a merchandise trade surplus of roughly $17 billion.
- India runs its biggest bilateral trade deficit with China.
- India also runs trade deficits with Japan and (mainly via crude oil and gold) with the UAE.
Among the four, only the USA gives India a trade surplus — hence the maximum (and only) surplus is with the USA.
- Reading 'surplus' as 'largest total trade' — the UAE/China have huge two-way trade but India is in deficit with them
- Assuming India has a surplus with China because trade volumes are large — it is actually India's biggest deficit
UPPSC & UPSC frame this as 'India's trade surplus/deficit is maximum with…' — recall that the USA is where India exports most (surplus) while China is the biggest deficit.
Assertion (A): 'Balance of Payments' represents a better picture of a country's economic transactions with the rest of the world than the 'Balance of Trade'. Reason (R): 'Balance of Payments' takes into account the exchanges of both visible and invisible items, whereas 'Balance of Trade' does not.
- (a) Both A and R are true and R is the correct explanation of A
- (b) Both A and R are true but R is not a correct explanation of A
- (c) A is true but R is false
- (d) A is false but R is true
Answer(a) Both A and R are true and R is the correct explanation of A
Tests the same core idea — the Balance of Trade (exports minus imports), the very quantity whose surplus this UPPSC question asks about, contrasted with the wider Balance of Payments.
- practice — not a real PYQ
India's largest trade deficit is with which of the following countries?
- (a)United States
- (b)China
- (c)United Arab Emirates
- (d)Saudi Arabia
Answer(b) China — India imports far more from China than it exports, giving India its biggest bilateral trade deficit.
- practice — not a real PYQ
A country is said to have a favourable balance of trade when
- (a)its imports exceed its exports
- (b)its exports exceed its imports
- (c)its exports equal its imports
- (d)its capital account is in surplus
Answer(b) its exports exceed its imports — a trade (BoT) surplus, i.e. a favourable balance of trade.