According to think tank GTRI, during the first half of this year, India had a trade deficit with 75 countries, including China and Russia, while it had a trade surplus with 151 countries, including the US and the Netherlands. India need not be concerned about the trade imbalance resulting from its imports of coal and crude oil, according to the Global Trade Research Initiative (GTRI). Instead, India should concentrate on lowering its imports of industrial goods, particularly those from China, as these imports pose a threat to its economic sovereignty.
“Between January and June 2024, India had a trade surplus with 151 countries, representing 55.8 per cent of its exports and 16.5 per cent of its imports, totalling $72.1 billion,” according to a report by GTRI. Between January and June of this year, the USA ($21 billion) and the Netherlands ($11.6 billion) had the largest surpluses.
It stated, “India had a trade deficit with 75 countries, which accounted for 44.2 percent of its exports and 83.5 percent of its imports, resulting in a $185.4 billion deficit, much larger than India’s overall trade deficit,” and that this circumstance underscores the necessity of strengthening domestic production and reducing reliance on particular imports.
The think tank’s data study also revealed that, out of 75 nations, 23 had a trade deficit with India exceeding $1 billion; these 23 countries made up 32.9 percent of India’s exports and 73.5 percent of its imports. China, at $41.88 billion, Russia, at $31.98 billion, Iraq, at $15.07 billion, Indonesia, at $9.89 billion, and the United Arab Emirates, at $9.47 billion, were the top five countries with the largest trade imbalances.
Saudi Arabia ($9.43 billion), Switzerland ($8.46 billion), South Korea ($6.93 billion), Japan ($6.13 billion), Qatar ($5.76 billion), Hong Kong ($5.21 billion), Taiwan ($4.28 billion), Australia ($3.34 billion), Thailand ($2.60 billion), Germany ($2.10 billion), Vietnam ($2.07 billion), Malaysia ($1.49 billion), Venezuela ($1.47 billion), Peru ($1.10) are the remaining 18 countries with trade deficits exceeding one billion dollars.
It further stated that India need not worry about the trade imbalance with the 11 nations—Angola, Iraq, Saudi Arabia, Australia, and Nigeria—that are its main suppliers of coal, petroleum products, and crude oil. However, the nation “may keep a watchful eye about the trade deficit with 4 out of the 23 countries that primarily export gold, silver, and diamonds to India as tariff cuts in gold and silver in this budget from 15 per cent to 6 per cent may lead to rise in imports,” Ajay Srivastava, founder of GTRI, said. Among them are Peru, Switzerland, the United Arab Emirates, and Hong Kong.
According to the research, India’s trade imbalance with China was $41.9 billion between January and June 2024, with $8.5 billion going to China and $50.4 billion coming in. China is India’s biggest trade deficit partner because of its low export and high import levels.
Even worse, industrial items account for $49.6 billion, or 98.5% of China’s total imports. 29.8% of India’s imports of industrial items come from China. To reduce its reliance on the import of essential industrial goods from China, India needs to make investments in deep manufacturing, according to Srivastava. Products that China imports more than 50% of all items into India include rolling stock, glassware, toys, ceramics, fake flowers, man-made filaments, umbrellas, and leather goods.
It further stated that the USA has surpassed China to become India’s top merchandise trade partner in the latest trade data for FY24.
“The revision increased India’s overall imports to $678.2 billion by an additional $2.8 billion in global imports. The USA accounted for $1.4 billion of this increase. Because of this, India’s imports from the USA increased from $40.8 billion in May to $42.2 billion in August, surpassing China to become India’s top trading partner with $119.7 billion in overall commerce, the statement stated.
