The latest report by the global think tank GTRI reveals that India’s leading trading partner in the year 2023-24 is not the USA but China.
However, the analysis shows that China barely beat America by just $100 million. The United States stands at $118.3 billion whereas India and China have a trade volume of $118.4 billion in FY24. That is a shift from fiscal years 2022-23 and 2021-22 which we dominated.
Further, there is also a difference in how goods are being exported and imported as indicated by this total trade figure. Its exports to China reached $16.67 billion from last year’s figure of $15.30 billion thus making it an increase of 8.7%. This data shows that iron ore, cotton, and agricultural products did well in export sales given their increased demand abroad. Conversely, exports to the USA marginally decreased by 1.32% during FY24.
On the import side, however, China continued to be the largest source of India’s imports with a value of $101.7 billion, implying a marginal increase of 3.24%. It reflects that the country is still relying on Chinese manufactured goods. On the other hand, imports from the US dropped significantly by 20% in FY24.
Different perceptions have emerged following this shift. For example, some talk about the ongoing geopolitical tensions between India and China but still say trade continues despite these issues. Also, others emphasize global supply chains that have proved resilient and where China continues to play an important role. The decline in US-India trade could be due to factors like global economic uncertainties or a shift in import sources.
This development is likely to be closely watched by policymakers in both India and the United States. As much as we may see China remaining its biggest trading partner for now, narrow margins coupled with changes within its trading structure indicate that this trend may continue evolving further over time.
