Two weeks ago, China made headlines for widening the trade deficit in the India-China trade. The report by Ajay Srivastava, GTRI founder highlighted the concern, dubbing rising imports from China a ‘challenge’ for India.
Consequently, the latest data by GTRI reveals China reclaiming its title of India’s largest trading partner after two years – beating the USA!
India-China bilateral trade
The India-China bilateral trade has reached $118.4 billion in the fiscal year 2024. US has seconded the list with $118.3 billion trade value, by a difference of $0.1 bn only.
According to the GTRI report, India’s saw import dependency on China for the following list of products, highlighting the need to foster production in the essential categories delineated below:
- Telecom and Smartphone parts : $4.2 billion worth imports made, contributing 44% of India’s total imports in the given category.
- Computers and Technology: $3.8 billion worth imports, constituting 77.7% of total imports of tech products.
- Advanced Technology components, Renewable energy, Electric vehicles, Agricultural inputs, Memory components of devices, Radio transmissions, antibiotics, smartphones and many more.
The recent quarterly update saw a 3.29% growth in imports during the period Apr-March 2024 from Apr-March 2023 at $101.745 bn worth imports. Meanwhile, imports from the US saw a significant decline of 19.83% from the previous cycle, recording $40.755 bn imports. But it remained the top destination for Indian exports $77.523 bn export in the recent cycle, although the shipments have declined by 1.31%.
In its latest publication, Five Year Review of India’s Merchandise trade, Indian think tank GTRI has analyzed the evolving dynamic of India’s trade relations on a global platform. It noted the significant transformation in bilateral trade relations of India with its top 15 trading partners,
In FY24 India experienced a drop in trade, with exports falling by 3.1% and imports by 5.7%. From FY19 to FY24, India’s trade activity has boosted significantly including a 31.39% rise in imports in five years. The products which saw a rise in imports and decline in exports include plastics and plastic articles, textile and clothing, diamonds and gold.
Trade Relations with US
The US had emerged as India’s top trading partner in FY22 and FY23. Otherwise the spot had always been retained by China, except in 2019-20 when UAE topped the list.
Their bilateral trade saw a significant jump in FY22, at $119.5 billion from $80.51 in the previous fiscal year. It surged again in FY23 by 7.65% to $128.55 billion before tanking to $118.3 billion in FY24. Major exports to the US include diamonds, packaged medicaments, refined petroleum and crustaceans. Whereas import products include crude petroleum, coal, diamonds, gold and scrap iron.
