May 13, 2024
Trade between India and the US experienced a slight decline, totalling US$ 118.3 billion in FY24
India imported US$ 4.2 billion worth of telecom and smartphone parts from China, accounting for 44% of total imports in this category
India has implemented production-linked incentive schemes (PLI), anti-dumping duties, and quality control orders
Russia saw a dramatic increase in trade figures, with exports growing by 78.3% and imports soaring by 952%, leading to a widened trade deficit
According to the latest data from the Global Trade Research Initiative (GTRI), China has reclaimed its position as India’s top trading partner, edging past the United States after a two-year gap. In the fiscal year 2024, bilateral trade between India and China reached US$118.4 billion. Imports from China increased by 3.24% to US$101.7 billion, while exports to China surged by 8.7% to US$16.67 billion.
Conversely, trade between India and the US experienced a slight setback. In FY24, the total trade volume amounted to US$ 118.3 billion. Indian exports to the US declined by 1.32% to US$ 77.5 billion, and imports from the US dropped by 20% to US$ 40.8 billion.
India’s economic relationship with China has garnered significant attention due to its heavy reliance on Chinese imports in crucial sectors such as telecommunications, pharmaceuticals, and advanced technology. The GTRI report underscored this dependence, revealing that India imported US$4.2 billion worth of telecom and smartphone parts from China, accounting for 44% of total imports in this category. Similarly, laptops and PC imports from China totalled US$ 3.8 billion, comprising 77.7% of India’s imports in this sector.
In response, India has implemented various strategies to mitigate this dependency. These include introducing production-linked incentive schemes (PLI) to boost domestic manufacturing, imposing anti-dumping duties to protect local industries, and enforcing quality control orders to ensure the safety and quality of imported goods. Additionally, India’s import of lithium-ion batteries for electric vehicles, primarily sourced from China, amounted to US$ 2.2 billion, representing 75% of such imports. This highlights China’s critical role in India’s endeavours towards the electrification of transport.
The report also analyzed other significant trading relationships, noting notable changes in trade dynamics with countries like Russia and Saudi Arabia. Russia witnessed a remarkable increase in trade figures, with exports surging by 78.3% and imports skyrocketing by 952%. However, this import surge has led to a significantly widened trade deficit, which could pose economic risks in the long run.
In contrast, trade with Saudi Arabia exhibited a more balanced growth trajectory, with exports more than doubling and imports rising slower.
Source: Mint