China beat US to become India's top trading partner. Here's how it happened

China is now India’s top trading partner.

This, according to data from the economic think-tank Global Trade Research Initiative (GTRI).

China in doing so surpassed the United States

But what does the data show? How did this happen?

Let’s take a closer look:

According to the GTRI, trade between India and China was valued at $118.4 billion in 2023-2024.

Meanwhile, trade between India and the US was at at $118.3 billion in 2023-24.

India’s exports to China increased 8.7 per cent to $16.67 billion in the last fiscal year.

New Delhi’s main exports were

• Iron ore

• Cotton

• Yarn

• Fabrics

• Make-up

• Handloom

• Spices

• Fruits

• Vegetables

• Plastic

• Linoleum

India’s imports from China spiked 3.24 per cent in the 2023-2024 fiscal to hit $101.7 billion.

Mint quoted the report as stating, “India imported $4.2 billion worth of telecom and smartphone parts, accounting for 44 per cent of total imports in this category, indicating significant reliance on Chinese components. Laptops and PCs imports from China totalled $3.8 billion, making up 77.7 per cent of India’s imports in this sector.”

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Indian Express reported that India imported $2.2 billion worth lithium-ion batteries for EVs from China.

This amounted to 75 per cent of such imports.

China was India’s top trading partner from 2013-2014 to 2017-2018. Beijing was also New Delhi’s biggest trading partner in 2020-2021.

Prior to China, the UAE was the India’s largest trading partner.

India’s imports and exports from US decrease

India’s exports to US decreased 1.32 per cent to touch $77.5 billion in 2023-24.

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That figure was at $78.54 billion in 2022-23.

India’s imports to the US also saw a precipitous drop of 20 per cent to touch $40.8 billion.

The US was India’s top trading partner in the 2021-2022 and 2022-2023 fiscal.

The report, which highlighted India’s changing trade dynamics with its top 15 trading partners, said it impacted both exports and imports and the status of trade surplus or deficit across various sectors.

It said that though China witnessed a marginal decline in exports by 0.6 per cent, from $16.75 billion to $16.66 billion, imports from China surged by 44.7 per cent, from $ 70.32 billion to $101.75 billion.

“This growth in imports led to an expanding trade deficit, rising from $53.57 billion in FY2019 to $85.09 billion in FY2024, highlighting concerns over stagnant exports amidst rising imports,” GTRI founder Ajay Srivastava said.

Conversely, it said, trade with the US showed growth, with exports increasing significantly by 47.9 per cent from $52.41 billion to $77.52 billion.

Imports from the US also grew by 14.7 per cent, from $35.55 billion to $40.78 billion.

This resulted in an expanded trade surplus for India, which grew from $16.86 billion to $36.74 billion.

In 2023-24, the UAE with $83.6 billion, was India’s third largest trading partner.

The UAE was followed by Russia ($65.7 billion), Saudi Arabia ($43.4 billion), and Singapore ($35.6 billion).

According to Indian Express, India’s exports from Russia increased by a phenomenal 78.3 per cent to $4.26 billion.

Imports increased a mammoth 952 per cent $61.44 billion – thus enlarging the trade deficit to $61.44 billion.

Exports to Saudi Arabia increased to twice of previous levels, while imports grew albeit at a more measured clip.

Exports to the kingdom rose 107.9 per cent increase to $11.56 billion, while imports increased 11.7 per cent to $31.81 billion.

The trade deficit between the two countries decreased to $20.25 billion from 22.92 billion.

With inputs from agencies