Indian Institute of Foreign Trade 2017 Solved Paper

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Directions for Questions 77-81: Exhibit 1-as under provides the data of India's Merchandize Imports (Billion US Dollar) on left axis and Percentage of Food, Fuel, Manufactures and Ores & Metals Imports of India's on the right axis. Similarly; Exhibit 2 provides data of India's Merchandize Exports (Billion US Dollar) on left axis and Percentage exports of Food, Fuel, Manufactures and Ores & Metals on the right axis. Attempt the questions in the context of information provided as under:
a. Trade Balance = Import Minus Exports
b. Trade Deficit = If Imports are more than Exports
c. Trade Surplus = If Exports are more than Imports
Exhibit 1 : Indians Total Merchandize Imports (US Dollar in Billion) and Percentage Imports of Food, Fuel, Manufactures and Ores & Metals (2012-2016)

Exhibit 2: Indians Total Merchandize Exports (US Dollar in Billion) and Percentage Exports of Food, Fuel, Manufactures and Ores & Metals (2012-2016)

Question : 80 of 114

Marks: +1, -0

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?

88 Billion Fuel Trade Deficit
74 Billion Fuel Trade Deficit
85 Billion Fuel Trade Deficit
78 Billion Fuel Trade Deficit

Validate

Solution:

Choice (B) Import and export of fuel in 2016 is 350 and 250 Billion Us Dollar respectively, and it is grown by 10% in 2017. So, import and export in 2017 will be 385 and 275 Billion US Dollar respectively. Total share of fuel in both import and export in 2017 is 30% and 15% respectively (5% more than 2016).
Import of fuel in 2017 is

= { 30 }/ { 100 } × 385 = 115.5

Export of fuel in 2017 is

= { 15 } /{ 100 } × 275 = 41.25

Trade deficit of fuel in year 2017 = 115.5 – 41.25 = 74 Billion Fuel Trade Deficit

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