Fact-Check: Piyush Goyal’s tweet about ‘Trade Surplus of Goods'
Sai Krishna Muthyanolla
July 20, 2020
Union Minister Piyush Goyal tweeted recently saying that for the first time in 18 years, India reported a trade surplus of goods in June 2020 and that this is a step towards ‘Atmanirbhar Bharat’. Does his tweet and interpretation of the data present the actual picture of India’s trade? Here is a fact-check.
Addressing the nation on 12 May 2020, Prime Minister Narendra Modi gave a call for Atmanirbhar Bharat or Self-Reliant India. Recently on 15 July 2020, Union Minister of Commerce & Industry, Piyush Goyal has tweeted that June’2020 witnessed ‘Monthly Goods Trade surplus’ for the first time in  18 years. The tweet further emphasises that there is a rapid turnaround of exports and that it is a realization of PM’s vision of Atmanirbhar Bharat.
The tweet further compared goods trade data of June 2020 with the same month previous year i.e. June 2019, to conclude that June 2020 has a ‘Goods Trade Surplus’ of $ 0.80 Billion, while in June 2019, there was a Goods Trade Deficit of $ 15.3 Billion. He also claimed that the monthly trade surplus was witnessed for the first time in 18 years.
Rapid Turnaround of Exports: Realising PM @NarendraModi ji’s vision of Atmanirbhar Bharat, for the first time in 18 years, India records a monthly goods trade surplus in June!
📖 https://t.co/Bb0Lryjzg5 pic.twitter.com/y1pDhp0kvi
How true are the statements of Piyush Goyal? Here is a fact-check of these claims.
Claim: Monthly Goods Trade surplus for the first time in 18 years and is a realisation of the vision of Aatmanirbhar Bharat.
Fact: While the monthly trade surplus is a fact, it is due to the contraction in the overall trade rather than an increase in exports over imports. Hence the claim is MISLEADING and doesn’t present the complete picture.
Considerable contraction in the volume of trade compared to last year
As per the information provided in the press release of Ministry of Commerce & Industry ( the link is also provided in Piyush Goyal’s tweet ), the trade balance of merchandise (goods) for June’2020 is a surplus of  $ 0.79 Billion, whereas in June’ 2019 it is a deficit of $ 15.28 Billion.
The huge deficit in June 2019, is due to the greater volume of imports which was way higher than the exports.  The total value of imports of goods in June 2019 was $ 40.29 Billion , while only $ 25.01 Billion worth of goods were exported.
While, the trade balance shows a surplus in June’2020,  the overall volume of trade is less than June’2019. While the value of imports is nearly half of June’2019 with only  $ 21.11 Billion, the value of exports is also less than that of last year with only $ 21.91 Billion. This clearly indicates that the surplus achieved in June’2020 is because of the huge fall in the value of imports, rather than any increase in the exports.
This contraction of trade is also reflected in the quarterly figures. For the quarter April-June’2020, the total value of imports of goods amounted to $ 60.44 Billion which is less than half of the Imports during April-June’2019 which was $ 127.04 Billion. The value of Indian exports was no better in terms of volume with, $ 51.32 Billion worth of exports during April-June’ 2020 compared to $ 81.08 Billion in 2019-20.
While the data for the specific month of June’2020 is in contrast to the general trend of deficit in balance of trade (BoT) for Goods, it is more a reflection of the current times impacted by COVID-19, rather than any material improvement in exports and reduced dependence on imports.
Fall in Imports of key commodities with no known Domestic substitution
The press release by the Ministry of Commerce and Industry provides further details about the goods being traded and the volume of import & export.
As per these estimates, the import value of most of the top 10 high value imports fell by at least 50% in June’20 compared to that of June’19, with the value of imports of few of these commodities falling by at least 70%.
‘Petroleum, Crude & Products’ form a major portion of India’s Imports. The Imports are generally categorised as Petroleum & Non-petroleum imports, signifying the value of this commodity in the overall imports. The imports of Petroleum & related products fell from around $ 11 Billion in June’2019  to $ 4.9 Billion in June’2020 i.e. a reduction of around 55 % from the same month last year. With no significant increase in domestic production of petroleum, the fall in the imports can be attributed to the fall in consumption due to the lockdown over the past 4 months.
Electronic Goods also witnessed a fall in imports compared to last year, though the extent of reduction is comparably lower than other commodities. Electronic goods imports constitute telecom & electronic instruments apart from various components. The fall in the imports could be a reflection of decrease in the activity/demand of the industry dependent on these components and the lack of interest in citizens to buy those goods during these uncertain.
The fall in the business activity is also reflected in other top import categories which in most of cases are raw material for various industries. The reduction in the commercial and industrial activity can also be ascertained from the fall of exports of finished products like Jewellery, Engineering goods, Textiles etc.
What does all this mean?
It is true that June’2020 is the month that reported a surplus in trade of goods. However, the same cannot be attributed to be a step towards the vision of Atmanirbhar Bharat. As the data indicates, the slowdown of economy & industrial activity due to COVID-19 induced lockdown is the major factor in the fall of imports rather than India substituting these commodities domestically.  Atmanirbhar Bharat is a long-term vision to provide impetus to domestic production of goods that are currently imported to effectively reduce the reliance on imports.
Hence, the tweet of Piyush Goyal is MISLEADING and does not present the complete picture.
Featured Image: Trade Surplus of Goods