Assuming India’s imports and exports grow by 10% in 2017 and sectoral share of fuel in both imports and exports grow by 5 percentage basis, what shall be the approximate deficit of fuel trade in the year 2017?
Explanation:
India’s imports in 2017 = 1.1 × 350 = 385 Billion USD
India’s exports in 2017 = 1.1 × 250 = 275 Billion USD
The share of fuel in imports and exports is now 30% and 15% respectively.
∴ New trade deficit = (30% of 385) − (15% of 275) = 115.5 − 41.25 = 74.25 Billion USD
Hence, option (b).
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