US beats China to emerge as India’s biggest trading partner during H1FY24

Despite declining exports and imports, the US emerged as India’s biggest trading partner during the first half of the financial year 2023-24. Rising above global economic uncertainties, the US surpassed China in terms of trade with India during April-September period.

The government data shows decline in the number of exports and imports between India and the US. However, there was fall in trade between India and China during the same period. The final data shows, the US as the biggest trading partner of India during the period.

Exports to the US have come down to $38.28 billion during April-September 2023 from USD 41.49 billion a year ago. The two nations also witnessed a decline in imports to $ 21.39 billion during the first six months of the current fiscal compared to $25.79 billion in the same period last year.

India-China trade

The two-way trade between India and China also dropped by 3.56 per cent to $ 58.11 billion. Exports to China reduced marginally to $ 7.74 billion during the first half of the current fiscal from $7.84 billion in the year-ago period. Imports from China reduced to $ 50.47 billion from $52.42 billion a year earlier.

Trade experts believe that though exports and imports are declining between India and the US due to global demand slowdown, the growth rate will enter a positive zone soon.

Despite this, the trend of increasing bilateral trade with the US will continue in the coming years as New Delhi and Washington are engaged in further strengthening the economic ties, they said.

Chairman of the CII national committee on EXIM Sanjay Budhia has earlier stated that an early solution for restoration of GSP benefits by the US to Indian exporters is the need of the hour as it would help further boost the bilateral trade.

Mumbai-based exporter Khalid Khan said that going by the trend, the US will continue to be the biggest trading partner of India despite the global challenges.

Ludhiana-based exporter SC Ralhan said that the trade between New Delhi and Washington will continuously grow in the coming years.

“The US should seriously consider restoration of Generalized System of Preferences (GSP) benefits to domestic exporters as it would significantly help boost trade,” Ralhan noted.

America is one of the few countries with which India has a trade surplus.

The US was India’s biggest trading partner in 2022-23. The bilateral trade between India and the US rose 7.65 per cent to USD 128.55 in 2022-23 against USD 119.5 billion in 2021-22. It was USD 80.51 billion in 2020-21.

Earlier, 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.

In 2022-23, the UAE, with USD 76.16 billion bilateral trade, was the third largest trading partner of India, followed by Saudi Arabia (USD 52.72 billion) and Singapore (USD 35.55 billion).

During April-September 2023, the bilateral trade between India and the UAE stood at USD 36.16 billion.