India's annual trade deficit and foreign exchange reserves are so small, why does it have the money to buy arms all over the world?

India's trade deficit actually began in the 1980s, and gradually expanded in this century. In 20 18, India's overall trade deficit reached1874.5 billion US dollars, up 24.7% year-on-year. Some people may not understand what a trade deficit is. The so-called trade deficit means that the total import volume is greater than the total export volume, which means that the competitiveness of export commodities in the world is relatively weak. A long-term trade deficit will make a country's resources continuously flow out, and at the same time, its foreign debt will continue to grow. This is also a problem that India has been facing in recent years.

And India's foreign exchange reserves, according to the data of the Bank of India, in March this year, India's foreign exchange reserves were about 4 billion177.6 billion US dollars. Compared with $426.028 billion in April last year, it has dropped by more than $25 billion. Compared with some other countries, the foreign exchange reserves of more than 400 billion dollars may be good, but for a big country like India, it is too little. At present, China's foreign exchange reserves exceed $3 trillion. Compared with China, which has a similar population, our foreign exchange reserves are only about one seventh of ours. This does not match India's status as a big country. The main reason for India's low foreign exchange reserves is the trade deficit.

Then why is India's foreign exchange reserves so small that it has no money to buy arms all over the world?

First of all, India's military purchases around the world are not necessarily paid in foreign exchange, but can be exchanged with some domestic minerals and other resources. In addition, when buying arms, there will be additional terms. The money will not be paid in one lump sum, but will be paid in installments during the contract period, just like our credit card installment repayment, which can reduce the pressure.

The second is to borrow money. As a world power, India's economy has developed rapidly in recent years, with an annual growth rate of 6%-7%, which is very popular in western countries, and it is naturally easier to borrow money.

The third is foreign investment. The development of every country naturally needs some foreign investors. As a developing country, India's economy has developed rapidly in recent years, and it is also favored by some foreign investors. According to the data, from 20 14 to 20 17, India attracted foreign investment of 16 10 billion USD. The dollars brought by these foreign investors can be converted into rupees, so they can spend and invest in India. And these dollars can be regarded as India's foreign exchange reserves.

Fourth, India has a large number of overseas Chinese. For example, there are many high-tech talents in Silicon Valley in the United States, and there are also many Indian overseas Chinese in the Middle East and Dubai. These overseas Chinese will also remit the money they earn back to India, and then their families will exchange these dollars for rupees to use in India. This part of dollars is naturally India's foreign exchange reserves.

To sum up, although India's purchase of arms around the world can quickly enhance its military strength, it is quite unfavorable to India's military industry system. With so many foreign exchange reserves, most of them are used to buy arms, and the research and development expenses will drop. Without your own technology, you can only buy products that others want to eliminate forever.