Monday, May 27

China Becomes India’s Top Trade Partner; Replaces US

Edited by Fazal Rahman Chembulangad

Replacing the United States, China became India’s largest trading partner in the Financial Year 2023-24, as per the latest report released by the Global Trade Research Initiative (GTRI). US was the India’s top trading partner in the FY 2021-22 and 2022-23.

India’s bilateral trade with China totalled a whopping 118.4 billion dollars, with imports surging by 3.24 percent to 101.7 billion dollars. India’s exports to China also rose by 8.7% to 16.67 billion dollars. The major sectors that saw healthy growth in India’s exports include iron ore, cotton yarn, fabrics, made-ups, handloom, spices, fruits and vegetables, plastic and linoleum. India’s heavy reliance on Chinese imports in sectors such as telecommunications, pharmaceuticals, and advanced technology has played a key role in both the country’s trade. 

According to the report, India imported 4.2 billion dollars worth of telecom and smartphone parts, accounting for 44 per cent of total imports in this category. Laptop and PC imports from China totalled 3.8 billion dollars, making up 77.7 per cent of India’s imports. 

On the opposite side, India’s previous largest trade partner, the US, saw a dip, with the two-way trade totalling 118.3 billion dollars in FY24.  Indian exports dropped by 1.32% to 77.5 billion dollars and imports reduced by 20% to 40.8 billion dollars. 

Notably, it is not the first time that China has become India’s largest trading partner as the neighbouring country had topped as a trading partner earlier too. 

China was India’s largest trading from 2013-14 till 2017-18 and also in 2020-21 before the United States took over the position. The United Arab Emirates (UAE) was India’s top trading partner before China replaced the gulf country in 2013, reports Economic Times citing data from the Commerce Ministry.

However, the UAE is now -FY2023-24- the third largest trading partner of India, followed by Russia, Saudi Arabia, and Singapore.