China surpasses the U.S. to become India’s top trading partner in FY24

China has once again emerged as India’s top trading partner, surpassing the United States in bilateral trade with a whopping $118.4 billion estimated in the financial year 2023-24, according to the latest data from the Global Trade Research Initiative (GTRI).

The data reveals that India’s imports from China saw a significant surge of 3.24% to $101.7 billion, while exports also increased by 8.7% to $16.67 billion in the same period. However, India’s exports to China have been on a downward trend over the past five years, shrinking marginally by 0.6% to $16.66 billion. On the other hand, imports from China have skyrocketed by 44.7% to $101.75 billion.

The United States, which was previously India’s largest trading partner, slipped to the second spot with bilateral trade amounting to $118.3 billion in FY24, just slightly lower than the India-China trade figures. The trade with the U.S. has shown an expansion of surplus trade, with exports growing by 47.9% and imports surging by 14.7% in the past five years.

The GTRI has pointed out that India’s low exports to China can be attributed to the fact that both countries specialize in similar sectors, with China being the world leader in many of these products. Despite India’s competence in supplying products like polished diamonds, small cars, generic medicines, and buffalo meat globally, China imposes barriers that hinder imports from India.

As India grapples with the challenge of increasing its exports to China, the trade dynamics between the two countries continue to evolve, with implications for the global economy.