In a period marked by global economic uncertainties and a discernible decline in exports and imports, the United States has ascended to become India’s paramount trading partner in the initial half of the current fiscal year, as per official government data. The provisional figures from the Ministry of Commerce reveal that bilateral trade between India and the United States has dipped by 11.3%, settling at USD 59.67 billion during the April-September 2023 period, in contrast to USD 67.28 billion in the same interval of the preceding year.
Significantly, exports to the United States have dwindled to USD 38.28 billion during April-September 2023, compared to USD 41.49 billion in the corresponding period a year ago. Imports have followed a similar trajectory, declining to USD 21.39 billion in the first six months of the ongoing fiscal year, in comparison to USD 25.79 billion during the same period last year.
Simultaneously, bilateral trade between India and China has experienced a dip of 3.56%, amounting to USD 58.11 billion. Exports to China have contracted marginally to USD 7.74 billion during the first half of the current fiscal, down from USD 7.84 billion in the preceding year, while imports have receded to USD 50.47 billion from USD 52.42 billion in the previous year.
Industry experts posit that while India’s trade with the United States has been impacted by global demand contraction, there is an optimistic anticipation of future growth. This sentiment is substantiated by ongoing efforts to bolster economic ties between New Delhi and Washington.
Sanjay Budhia, Chairman of the CII national committee on EXIM, has emphasized the pressing need for the restoration of Generalized System of Preferences (GSP) benefits by the United States to Indian exporters. He underscores the potential for such a move to significantly amplify bilateral trade.
Khalid Khan, an exporter based in Mumbai, contends that the United States will persist as India’s primary trading partner, even amidst the prevailing global challenges.
SC Ralhan, an exporter from Ludhiana, echoes the sentiment, predicting a continuous expansion of trade between New Delhi and Washington.
Notably, the United States stands out as one of the few nations with which India maintains a trade surplus. In the fiscal year 2022-23, the bilateral trade between India and the United States witnessed a growth of 7.65%, reaching USD 128.55 billion, a notable ascent from USD 119.5 billion in 2021-22 and USD 80.51 billion in 2020-21.
It’s essential to recognize that prior to the United States, China held the mantle of India’s top trading partner between 2013-14 and 2017-18, as well as in 2020-21. Before China’s ascendancy, the United Arab Emirates (UAE) enjoyed the distinction of being India’s largest trading partner. In the fiscal year 2022-23, the UAE retained its position as the third-largest trading partner, with bilateral trade amounting to USD 76.16 billion, followed by Saudi Arabia (USD 52.72 billion) and Singapore (USD 35.55 billion). During the April-September 2023 period, India’s trade with the UAE stood at USD 36.16 billion.
In light of these developments, the trajectory of India’s trade relationships underscores the dynamic nature of the nation’s global commerce engagements.