India’s Trade Trends Show Diverging Paths With US and China

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New Delhi, April 17: India’s trade relations with its major partners have seen some countries make breakthroughs, while the United States has maintained its dominance as the single largest trading partner for the country. Alongside this, India’s trade deficit with China has increased drastically. The Provisional data released from the Commerce Department states that the United States is still India’s largest trading partner, China in second, and Japan coming in third.

Exports to the US increased by nearly 11.6%, reaching an outstanding total of 86.5 billion dollars. The US also increased imports from India, which grew by 7.4%, reaching 45.3 billion. Overall, this resulted in bringing India’s trade surplus with the United States to an impressive 60 billion dollars. In India, this raised allegations against the US in Washington’s eyes, as, previously, President Donald Trump used to focus on declining trade deficits.

The trade deficit for India with China has increased to nearly 100 billion dollars. The bank estimates a decline in exports to China due to a multitude of reasons. Similar declines were observed in sectors like iron and steel, aluminium, and cotton, with cotton exports plunging from $725 million to just $192 million.

In the case of the US, much of the export boost came from a rise in smartphone shipments, especially Apple iPhones, reflecting growing Indian smartphone manufacturing capacity. This trend also contributed to a dramatic 70% fall in smartphone imports from China, which dropped to just $252 million.

However, China remains India’s dominant source for electronic components and machinery. Imports included Chinese-made computers, air-conditioning equipment, and specialized machinery such as embroidery. Interestingly, imports of photovoltaic cells from China fell 20% to $2.4 billion, while lithium-ion battery imports were slightly lower at $1.8 billion.

The data highlights India’s deepening trade ties with the US, driven by high-tech manufacturing and electronics, while underscoring the persistent challenge of rebalancing its trade relationship with China, still heavily skewed by high-value imports and declining exports.