China surpasses US as India’s largest trading partner

In the fiscal year 2023-24, China surpassed the United States to become India’s largest trading partner, with a bilateral trade volume of $118.4 billion, as per the Global Trade Research Initiative (GTRI) data. The US, which was India’s top trading partner in the fiscal years 2021-22 and 2022-23, had a trade volume of $118.3 billion with India in the same period.

India’s exports to China increased by 8.7 per cent to $16.67 billion in the last fiscal year, with sectors such as iron ore, cotton yarn/fabrics/madeups, handloom, spices, fruits and vegetables, plastic and linoleum experiencing significant growth. Imports from China also saw a

rise of 3.24 per cent, amounting to $101.7 billion.

Contrarily, India’s exports to the US decreased by 1.32 per cent to $77.5 billion in 2023

24, down from $78.54 billion in 2022-23. Imports from the US also saw a decline of approximately 20 per cent, standing at $40.8 billion.

GTRI highlighted that India’s trade dynamics with its top 15 trading partners underwent significant transformations from FY2019 to FY2024, affecting both exports and imports and altering the status of trade surplus or deficit across various sectors.

China’s exports saw a slight decrease of 0.6 per cent, from $16.75 billion to $16.66 billion, while its imports surged by 44.7 per cent, from $70.32 billion to $101.75 billion. “This growth in imports led to an expanding trade deficit, rising from $53.57 billion in FY2019 to $85.09 billion in FY2024, highlighting concerns over stagnant exports amidst rising imports,” said Ajay Srivastava, the founder of GTRI.

On the other hand, trade with the US showed growth, with exports increasing significantly by 47.9 per cent from $52.41 billion to $77.52 billion. Imports from the US also grew by 14.7 per cent, from $35.55 billion to $40.78 billion. This resulted in an expanded trade surplus for India, which grew from $16.86 billion to $36.74 billion.

As per the commerce ministry data, China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21. Before China, the UAE was the country’s largest trading partner. The US was the largest partner in 2021-22 and 2022-23. In 2023-24, the UAE, with $83.6 billion, was the third largest trading partner of India. It was followed by Russia ($65.7 billion), Saudi Arabia ($43.4 billion), and Singapore ($35.6 billion).