China Emerges As India's Largest Trade Partner In Fiscal Year 2024

China has emerged as the largest trading partner of India, edging past the United States in the fiscal year 2023-24. According to data from the Global Trade Research Initiative (GTRI), the two-way commerce between India and China amounted to USD 118.4 billion, slightly surpassing the USD 118.3 billion recorded between India and the US.

The data reveals that India's exports to China experienced a notable 8.7% increase, reaching USD 16.67 billion during the last fiscal year. Key sectors contributing to this growth include iron ore, cotton yarn and fabric, handloom, spices, fruits and vegetables, plastic, and linoleum. On the other hand, imports from China rose by 3.24%, totaling USD 101.7 billion.

Conversely, India's exports to the US saw a slight dip of 1.32 percent, amounting to USD 77.5 billion, while imports decreased by approximately 20 percent to USD 40.8 billion. Despite this decrease, the trade surplus between India and the US expanded, growing from USD 16.86 billion to USD 36.74 billion.

"The trade deficit widened as a result of the increase in imports, going from USD 53.57 billion in FY2019 to USD 85.09 billion in FY2024, raising concerns about stagnant exports in the face of rising imports," GTRI Founder Ajay Srivastava stated.

The data highlights a slight decrease of 0.6% in India's exports to China, accompanied by a noteworthy increase of 44.7% in imports from China. Due to this jump, the trade imbalance grew, rising from USD 53.57 billion in FY2019 to USD 85.09 billion in FY2024.

In contrast, trade with the US exhibited growth, with exports increasing by 47.9% and imports growing by 14.7%. This growth contributed to an expanded trade surplus for India, reaching USD 36.74 billion.

Over the years, India's top trading partners have witnessed fluctuations. China held the position of India's largest trading partner from 2013-14 to 2017-18, and again in 2020-21. Before China, the UAE occupied this position. The US emerged as India's largest partner in 2021-22 and 2022-23.

In the fiscal year 2023-24, the UAE maintained its position as India's third-largest trading partner, with USD 83.6 billion in two-way commerce. Following the UAE were Russia, Saudi Arabia, and Singapore, contributing to India's diverse trade portfolio.

These trade dynamics underscore the evolving nature of global commerce and the strategic importance of bilateral relationships. As India continues to navigate its economic landscape, maintaining diverse and robust trade partnerships remains essential for sustained growth and development.

This shift in India's trade landscape reflects broader geopolitical and economic trends, signalling potential opportunities and challenges for policymakers and businesses alike. As India recalibrates its trade strategies, fostering mutually beneficial relationships with key partners will be crucial to navigating the evolving global economic landscape.

News Agency Inputs