There is no immediate major challenge before India. But the trend of inflation and recession, There are chances of it being long term. So being sure would not be the right approach.
India’s trade deficit was recorded in June last, when this deficit was recorded at more than $ 26 billion. That’s when he was told a warning bell. But in July it went much further than that. This deficit has gone beyond $31 billion. Along with this, another worrying aspect was that there was a decline of 12 percent in India’s exports. Now that the shadow of recession has deepened on America and Europe, it is feared that it will have a worse effect on India’s exports. While there does not seem to be any way to reduce the import bill. More foreign exchange has to be spent on importing the same things before the inflation of petroleum and other commodities. This is a sign of a bigger problem imminent. It is true that right now India has strong foreign exchange reserves. So no immediate major challenge will emerge. But all the institutions and experts of the world are warning that the trend of inflation and recession right now is likely to be long term. In such a situation, serious challenges will definitely arise in the future.
So there is a need to be cautious from now on. It is worth noting that the two measures announced by the government to bring more dollars into the country (doubling the limit of borrowing in dollars of companies and allowing banks to adopt interest rate flexibility to attract money from NRIs) ), there has been no significant benefit from them. In such a situation, there is a need to take strict measures to control the trade deficit. If necessary, steps should be taken to reduce import of luxury goods for this purpose. A big problem is that due to the weakening of small and medium industries in the country, small things have to be imported. China has benefited from this. The figures for July imports and exports from China are yet to come. But in the last months the trend has been to widen India’s trade deficit. So this issue should be considered in totality, so that a concrete solution can be found from now on.