India has achieved a trade surplus with 151 countries, including the US and Netherlands, while running a trade deficit with 75 nations, such as China and Russia, during the first half of 2024, according to the Global Trade Research Initiative (GTRI).
The GTRI report indicates that India should not be concerned about the trade deficit from crude oil and coal imports. However, the focus should be on reducing imports of industrial goods, particularly from China, to safeguard India’s economic sovereignty.
Between January and June 2024, India recorded a trade surplus with 151 countries, which accounted for 55.8% of its exports and 16.5% of its imports, totalling USD 72.1 billion. The largest surpluses were with the USA (USD 21 billion) and the Netherlands (USD 11.6 billion).
Conversely, India faced a trade deficit with 75 countries, representing 44.2% of its exports and 83.5% of its imports, resulting in a deficit of USD 185.4 billion. This highlights the need for India to reduce reliance on specific imports and bolster domestic production.
The analysis revealed that India's trade deficit with 23 of these 75 countries exceeded USD 1 billion. These nations accounted for 32.9% of India's exports and 73.5% of its imports.
The top five countries with the highest deficits were China (USD 41.88 billion), Russia (USD 31.98 billion), Iraq (USD 15.07 billion), Indonesia (USD 9.89 billion), and the UAE (USD 9.47 billion).
Other countries with trade deficits exceeding USD 1 billion include Saudi Arabia (USD 9.43 billion), Switzerland (USD 8.46 billion), South Korea (USD 6.93 billion), Japan (USD 6.13 billion), Qatar (USD 5.76 billion), Hong Kong (USD 5.21 billion), Taiwan (USD 4.28 billion), Australia (USD 3.34 billion), Thailand (USD 2.60 billion), Germany (USD 2.10 billion), Vietnam (USD 2.07 billion), Malaysia (USD 1.49 billion), Venezuela (USD 1.47 billion), Peru (USD 1.10 billion), and Ireland (USD 1.10 billion).
The GTRI suggests that India should not worry about deficits with 11 countries exporting crude oil, petroleum products, and coal, including Angola, Iraq, Saudi Arabia, Australia, and Nigeria.
However, India should monitor the trade deficit with four countries exporting gold, silver, and diamonds—Peru, Switzerland, UAE, and Hong Kong—due to potential impacts of tariff reductions from 15% to 6% on these items.
For the period from January to June 2024, India's trade with China resulted in an import of USD 50.4 billion and an export of USD 8.5 billion, creating a significant trade deficit of USD 41.9 billion.
This imbalance is exacerbated by the fact that 98.5% of imports from China are industrial goods. China represents 29.8% of India’s industrial goods imports, making it crucial for India to invest in domestic manufacturing to reduce this dependence.
Updated trade data for FY24 now shows the USA as India's top merchandise trade partner, surpassing China. The revision, which added USD 2.8 billion to global imports, brought India's total imports to USD 678.2 billion.
Notably, imports from the USA rose from USD 40.8 billion in May to USD 42.2 billion in August, making the USA India's leading trading partner with a total trade value of USD 119.7 billion.
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