Merchandise trade deficit (i.e merchandise imports minus merchandise exports) is the largest component of India’s current account deficit. Hence statement 1 is correct.
From above pie chart we can see that Statement 2 is incorrect. India’s overall exports of the service sector are more than overall imports of this sector. The surplus on net services has beensignificantly financing the merchandise trade deficit. Hence Statement 3 is correct.
Net Services as percent of GDP
2009-14
2014-19
2018-19
2019-20 H1
3.3
3.2
3.1
2.9
Source: Reserve Bank of India
Current account deficit (CAD) as per cent of GDP
2009-14
2014-19
2018-19
2019-20 H1
-3.3
-1.4
-2.1
-1.5
Source: Reserve Bank of India
From above table we can see that Statement 4 is correct.