Balance of Trade (BoT) – Complete UPSC Notes

Balance of Trade (BoT) 1. What is Balance of Trade (BoT)? The Balance of Trade (BoT) is the difference between the value of a country's exports and imports of goods (merchandise trade) over a period of time . It is the largest component of the Current Account in the Balance of Payments (BoP) . Formula: Balance of Trade = Value of Exports − Value of Imports \text{Balance of Trade} = \text{Value of Exports} - \text{Value of Imports} 🔹 If exports > imports → Trade Surplus ✅ (Positive BoT) 🔹 If imports > exports → Trade Deficit ❌ (Negative BoT) 2. Structure of India's Balance of Trade India's Balance of Trade (BoT) │ ┌───────────────┴───────────────┐ │ │ Exports Imports │ │ ┌────────┴────────┐ ┌──────┴───────┐ │ │ │ │ …