September 2, 2024
India recorded a trade surplus with 151 countries, including the US and the Netherlands, during the first half of 2024
The country had a trade deficit with 75 nations, including China and Russia, amounting to a total deficit of US$185.4 billion
GTRI emphasised that while deficits in crude oil and coal imports are not a concern, reducing industrial goods imports from China is crucial for economic security
India's trade with the US rose, making the USA its top trading partner, overtaking China in merchandise trade
According to a report by the Global Trade Research Initiative (GTRI), India registered a trade surplus with 151 countries, including the United States and the Netherlands, while experiencing a trade deficit with 75 nations, such as China and Russia, during the first half of 2024. The think tank noted that India should focus on reducing its dependence on industrial goods imports from countries like China, which threatens its economic sovereignty, rather than worrying about deficits in crude oil and coal imports.
GTRI reported that “between January and June 2024, India had a trade surplus with 151 countries, accounting for 55.8% of its exports and 16.5% of its imports, totalling US$72.1 billion.” The largest surpluses were with the USA at US$21 billion and the Netherlands at US$11.6 billion.
However, the country experienced a trade deficit with 75 nations, which comprised 44.2% of its exports and 83.5% of its imports, resulting in a US$185.4 billion deficit. This significant gap underscores the need for India to reduce its reliance on certain imports and bolster domestic production.
The report highlighted that India’s trade deficit exceeded US$1 billion, with 23 of these 75 countries accounting for 32.9% of India’s exports and 73.5% of its imports. The top five countries with the largest trade deficits were China (US$41.88 billion), Russia (US$31.98 billion), Iraq (US$15.07 billion), Indonesia (US$9.89 billion), and the UAE (US$9.47 billion).
India also faced trade deficits exceeding US$1 billion with 18 other countries, including Saudi Arabia (US$9.43 billion), Switzerland (US$8.46 billion), South Korea (US$6.93 billion), and Japan (US$6.13 billion), among others. GTRI suggested that India should not be concerned about deficits with 11 countries exporting crude oil, petroleum products, and coal. However, it should remain watchful over deficits with four nations exporting gold, silver, and diamonds due to recent tariff cuts from 15% to 6%.
The report noted that India’s trade relationship with China remains a challenge. From January to June 2024, India exported US$8.5 billion to China, while imports from China totalled US$50.4 billion, creating a trade deficit of US$41.9 billion. GTRI founder Ajay Srivastava stated, “98.5% of imports from China, or US$49.6 billion, are industrial goods.” He emphasised the need for India to “invest in deep manufacturing to reduce reliance on critical industrial imports from China.”
The report also identified goods for which China’s share of India’s global imports exceeds 50%, including umbrellas, artificial flowers, man-made filaments, rolling stock, glassware, leather goods, ceramic products, toys, and musical instruments.
Additionally, the updated trade data for FY24 now positions the US as India’s top merchandise trade partner, surpassing China. “The revision added an extra US$2.8 billion in global imports, raising India’s total imports to US$678.2 billion. Of this increase, US$1.4 billion came from the USA,” the report said, indicating that India’s imports from the USA rose from US$40.8 billion in May to US$42.2 billion in August, elevating the US to India’s top trading partner with a total trade of US$119.7 billion, outpacing China.
Source: Business Today