US top trading partner, highest trade deficit with China in Jan-June 2024: GTRI

NEW DELHI: The US has emerged as India's top trading partner during January-June this year, while the country has recorded its highest trade deficit of $ 41.6 billion with China during the period, according to think tank GTRI.

It also said the country's merchandise exports rose 5.41 per cent to $ 230.51 billion during the first of 2024.

"China topped the list with a substantial trade deficit of $41.6 billion, as exports to China were $8.5 billion, while imports reached $50.1 billion during January-June 2024," it added.

The data analysis for the first half of this calendar year by the Global Trade Research Initiative (GTRI) showed India exports goods to 239 countries and out of these, 126 countries showed positive growth in exports. These nations account for 75.3 per cent of India's total exports.

Major countries with increased exports include the USA, UAE, Netherlands, Singapore, and China. However, exports declined in 98 countries, which account for 24.6 per cent of India's exports, with notable declines in Italy, Belgium, Nepal, and Hong Kong.

"The US is India's top export partner. Exports to the US increased from $ 37.7 billion in January-June 2023 to $ 41.6 billion in January-June 2024, reflecting a growth of 10.5 per cent.

The UAE saw a significant rise in exports, increasing from $ 15.8 billion to $ 19.7 billion, marking a 24.9 per cent growth," it said.

In the first half of 2024, China remained the largest import supplier, with imports increasing from $ 46.2 billion to $ 50.1 billion.

"In FY2024, China was India's top trading partner, just ahead of the US. However, from January to June 2024, the US became India's largest trading partner, with total trade growing from $ 59.4 billion to $ 62.5 billion, a 5.3 per cent increase," GTRI Founder Ajay Srivastava said.

China followed as the second-largest trading partner, with total trade rising from $ 54.4 billion to $ 58.6 billion, marking a 7.7 per cent increase.

The merchandise exports growth was pushed by sectors like iron ore, pharmaceuticals, precious stones, basmati rice, chemicals, and smartphones.

On the services front, exports grew by 6.9 per cent to $ 178.2 billion, while the import imports grew by 5.79 per cent to $ 95 billion.

It also said that during January-June 2024, the country's merchandise imports rose 5.47 per cent to $ 345.3 billion.

It said that India's foreign trade (exports and imports), including both merchandise and services, reached a record $ 849 billion in the first half of 2024, up 5.8 per cent from the same period in 2023.

Sectorally, industrial products lead the export sector with $ 140.79 billion, accounting for 61.1 per cent of total exports, it said adding though the outbound shipments of agriculture, meat, and processed food dipped by 2.58 per cent to $ 26.06 billion, certain segments registered healthy growth.

Export of basmati rice rose by 24.3 per cent to $ 3.42 billion in January-June 2024. Spices too recorded a growth of 13.3 per cent to $ 2.42 billion during the period.

The shipments of buffalo meat increased from $ 1.64 billion in January-June 2023 to $ 1.78 billion in January-June 2024. However, sugar exports dipped by 40.47 per cent to $ 1.48 billion.

In the telecom, computer, and electronics segment, exports of smartphones increased from $ 7.5 billion in January-June 2023 to $ 10 billion in January-June 2024.

Shipments of electronics components, electric machinery, and medical and scientific Instruments too rose at a heavy pace during the period under review, the GTRI data showed.

"Export of Petroleum Products remained stable at $ 42.92 billion in January-June 2023 and $ 42.90 billion in January-June 2024, with a slight decrease of 0.05 per cent," it said.

It added that shipments of machinery, boilers, turbines, and parts experienced a significant increase of 12.66 per cent to $ 15.95 billion.

Similarly, exports of garments increased from $ 8.1 billion in the first half of 2023 to $ 8.25 billion in January-June 2024, an increase of 2.42 per cent.

Further on the imports side, industrial products lead the import sector with $ 166.54 billion, accounting for 48.2 per cent of total inbound shipments.

"Ores, minerals, and petroleum follow with $ 125.14 billion, making up 36.2 per cent. Diamonds, gold, and related products contribute $ 37.06 billion, or 10.7 per cent, to the total exports.

Imports of crude palm oil and sunflower oil rose by 0.29 per cent and 3.9 per cent to $ 2.86 billion and $ 1.96 billion during the period respectively.

"Import of Petroleum crude increased from $ 72.0 billion in January-June 2023 to $ 78.3 billion in January-June 2024, an increase of 8.8 per cent," it said adding "the diamonds, gold, and related products sector, imports rose significantly by 18.75 per cent to $ 37.06 billion in 2024".

It added that the imports of telecom, computer, and electronics products imports grew, from $ 35.22 billion in 2023 to $ 39.95 billion in 2024, reflecting a 13.42 per cent growth.

"India should continue to focus on increasing product quality and supply chain competitiveness. Since every big country is into inward mode, India should not surrender its policy space especially in new issues in free trade agreements and IPEF (Indo-Pacific Economic Framework)," he said.