US Tops India’s Trading Partners as Trade Deficit with China Widens
- In Reports
- 08:04 PM, Aug 24, 2024
- Myind Staff
The United States reclaimed its position as India’s top trading partner for the January-June period of 2024, with bilateral trade growing 5.3% to $62.5 billion. This comes after China briefly surpassed the US as India’s largest trading partner in the previous year.
According to a report by the Global Trade Research Initiative (GTRI), India’s total foreign trade reached a record $849 billion in the first half of 2024, marking a 5.8% increase from the same period in 2023. This growth was fuelled by a 6.05% rise in exports. Merchandise exports alone increased by 5.41% to $230.51 billion.
Despite the overall growth, India’s largest trade deficit in the first half of 2024 was with China. The deficit amounted to $41.6 billion, with exports to China totalling $8.5 billion, while imports surged to $50.1 billion. Industrial products led India's exports with $140.79 billion, although exports of agricultural products, meat, and processed foods faced a decline, including a notable 40.47% drop in sugar exports.
India’s exports were spread across 239 countries, with 126 nations showing positive growth and accounting for 75.3% of total exports. Notable increases were seen in exports to the USA, UAE, Netherlands, Singapore, and China. Conversely, exports to 98 countries, which make up 24.6% of India’s exports, declined, including to Italy, Belgium, Nepal, and Hong Kong.
Exports to the US grew from $37.7 billion in January-June 2023 to $41.6 billion in the same period of 2024, reflecting a 10.5% increase. Exports to the UAE also saw a significant rise, climbing from $15.8 billion to $19.7 billion, a growth of 24.9%.
On the services front, exports reached $178.2 billion, a 6.9% increase, though this is slower compared to the 17.7% growth in the same period of 2023. Services imports also rose by 5.79% to $95 billion. India's merchandise and services exports grew by 5.41% and 6.9%, respectively. However, China outpaced India with a 6.9% increase in merchandise exports and a 14% growth in services exports.
The UNCTAD’s latest Global Trade Update, released on July 2, offers a cautiously optimistic outlook for global trade in 2024, projecting GDP growth around 3%. The increase in global trade is expected to be driven by higher exports from China (9%), India (7%), and the US (3%), while Europe’s exports remain stagnant and Africa’s exports decline by 5%. Challenges such as the ongoing war in Ukraine, high inflation, tighter monetary policies, and financial uncertainties are expected to be overshadowed by new subsidies and protectionist measures from the EU and the US.
“India should continue to focus on enhancing product quality and supply chain competitiveness,” advised GTRI founder Ajay Srivastava. “Given the global trend towards inward policies, India should not surrender its policy space, particularly in new trade agreements and the Indo-Pacific Economic Framework for Prosperity.”
Image source: cnbctv18
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