China surpasses US, becomes India’s top trade partner with $118.4 billion

Conversely, trade between India and the US experienced a slight decline. Two-way trade totalled $118.3 billion in FY24, with Indian exports dropping by 1.32% to $77.5 billion and imports decreasing by 20% to $40.8 billion.

India‘s economic ties with China have been under close scrutiny due to a heavy reliance on Chinese imports in critical sectors such as telecommunications, pharmaceuticals, and advanced technology. 

The GTRI report highlighted significant dependence, noting, “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.”

In response, India has implemented various measures to reduce this dependency, including production-linked incentive schemes (PLI), anti-dumping duties, and quality control orders. Additionally, India’s import of lithium-ion batteries for electric vehicles, primarily from China, was valued at $2.2 billion, representing 75% of such imports, underscoring the critical role China plays in India’s push towards electrification of transport.

The report also compared other significant trading relationships, noting substantial changes in trade dynamics with countries like Russia and Saudi Arabia. Russia’s trade figures have seen a dramatic increase, with exports growing by 78.3% and imports soaring by 952%, leading to a significantly widened trade deficit. 

In contrast, trade with Saudi Arabia showed a more balanced growth, with exports more than doubling and imports rising at a slower pace.

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Published: 13 May 2024, 11:54 AM IST