Despite a decline in exports and imports, the United States has emerged as India’s leading trading partner during the first half of the financial year 2023-24, surpassing China. Government data reveals a drop in trade between India and both the US and China, with the US ultimately becoming India’s top trading partner during this period.
During the period from April to September 2023, exports from India to the United States fell to $38.28 billion, down from $41.49 billion the previous year. Likewise, imports between the two nations also saw a decrease, falling to $21.39 billion during the first half of the current fiscal year compared to $25.79 billion in the same period last year.
Despite the trade decline between India and the US, experts remain hopeful of a positive trend in trade in the coming months. They believe that the growth rate will soon enter a positive zone.
In contrast, trade between India and China also saw a decline, with bilateral trade dropping by 3.56% to $58.11 billion. Exports to China marginally decreased to $7.74 billion during the first half of the current fiscal year, down from $7.84 billion in the year-ago period. Imports from China also decreased to $50.47 billion from $52.42 billion a year earlier.
Experts anticipate that the trend of increasing bilateral trade with the United States will continue in the coming years, as New Delhi and Washington work to strengthen their economic ties.
China had previously held the title of India’s top trading partner from the financial year 2013-14 until 2017-18, with the United Arab Emirates (UAE) and other countries following closely. In the financial year 2022-23, the UAE ranked as India’s third-largest trading partner, with bilateral trade totaling $76.16 billion.
To boost trade between India and the United States, the restoration of Generalized System of Preferences (GSP) benefits by the United States to Indian exports can be beneficial. According to Sanjay Budhia, Chairman of the CII national committee on EXIM, this could help promote trade.
The trade between New Delhi and Washington is expected to continue to grow in the coming years, as Mumbai-based exporter Khalid Khan and Ludhiana-based exporter SC Ralhan expressed their optimism.
In the financial year 2022-23, the United States was India’s biggest trading partner, with bilateral trade increasing by 7.65% to $128.55 billion, up from $119.5 billion in 2021-22. It had been $80.51 billion in the financial year 2020-21.
Despite current challenges, the United States is expected to remain India’s leading trading partner, underlining the strength of their economic relationship.
