India’s trade deficit with China reached $41.9 billion in the first half of 2024, while the United States has surpassed China to become India’s top trading partner.
India has recorded a substantial trade surplus with 151 countries and a significant deficit with 75 nations in the first half of 2024, according to the Global Trade Research Initiative (GTRI). The data highlights a trade surplus of $72.1 billion with countries such as the USA and the Netherlands, while the trade deficit with other nations totals $185.4 billion.
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| Chinese President Xi Jinping and Indian Prime Minister Narendra Modi attend a group photo session during the BRICS Summit in Xiamen, China, on Sept. 4, 2017. [ Photo © Kenzaburo Fukuhara/AFP via Getty Images] |
The largest trade surpluses were achieved with the USA, at $21 billion, and the Netherlands, at $11.6 billion. Conversely, India faced its highest deficits with China, Russia, Iraq, Indonesia, and the UAE. China emerged as India’s largest trade deficit partner, with a notable imbalance amounting to $41.9 billion. India exported $8.5 billion worth of goods to China while importing $50.4 billion, with 98.5% of these imports being industrial goods.
The report underscores the critical issue of India’s reliance on imports from China, particularly in the industrial sector, which constitutes 29.8% of India’s total industrial goods imports. To mitigate this, there is a pressing need for India to enhance its domestic manufacturing capabilities.
In a significant shift, the USA has now surpassed China as India’s top merchandise trade partner. Updated figures show that imports from the USA have risen to $42.2 billion, making the USA the leading trade partner with a total trade volume of $119.7 billion, ahead of China’s $116.6 billion.
While deficits with countries exporting crude oil, petroleum products, and coal, such as Angola and Saudi Arabia, are less concerning, India is advised to focus on reducing deficits with nations that export high-value industrial goods and precious metals. Notably, the recent tariff cuts on gold and silver may lead to increased imports from countries like Peru and Switzerland, warranting careful monitoring.
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