According to government data, the US has emerged as India’s biggest trading partner in the first half of the current financial year, despite global economic uncertainties and declining exports and imports.
The provisional data from the Commerce Ministry shows that bilateral trade between India and the US has decreased by 11.3% to $59.67 billion during April-September 2023, compared to $67.28 billion in the same period last year.
Exports to the US have also seen a decline, dropping to $38.28 billion from $41.49 billion a year ago. Similarly, imports have decreased to $21.39 billion in the first six months of the current fiscal, compared to $25.79 billion in the same period last year.
The two-way trade between India and China has also seen a decline of 3.56% to $58.11 billion. Exports to China have marginally contracted to $7.74 billion during the first half of the current fiscal, while imports fell to $50.47 billion. Trade experts believe that while the current slowdown is due to global demand, the growth rate is expected to enter a positive zone soon.
They also predict that the trend of increasing bilateral trade between India and the US will continue in the coming years as both countries work towards strengthening economic ties.
Chairman of the CII national committee on EXIM, Sanjay Budhia, has emphasized the need for the US to restore the Generalized System of Preferences (GSP) benefits to Indian exporters, as it would greatly boost bilateral trade. Furthermore, exporters based in Mumbai and Ludhiana believe that despite the global challenges, the US will remain India’s biggest trading partner. They also advocate for the restoration of GSP benefits to domestic exporters. It is worth noting that the US is one of the few countries with which India has a trade surplus.
In terms of historical trade partners, China was India’s top trading partner from 2013-14 until 2017-18 and regained that position in 2020-21. Before China, the UAE held the title of India’s largest trading partner. In the fiscal year 2022-23, the UAE ranked as the third largest trading partner, with bilateral trade amounting to $76.16 billion.
It was followed by Saudi Arabia with $52.72 billion and Singapore with $35.55 billion. During April-September 2023, the bilateral trade between India and the UAE was recorded at $36.16 billion.
Despite the the current decline in trade, experts remain optimistic about the growth potential between India and the US, attributing it to ongoing efforts to strengthen economic ties between the two countries.
