US top trading partner, highest trade deficit with China in Jan-June 2024: GTRI

New Delhi: The US has emerged as India's top trading partner during January-June this year, while the country has recorded its highest trade deficit of USD 41.6 billion with China during the period, according to think tank GTRI.

It also said the country's merchandise exports rose 5.41 per cent to USD 230.51 billion during the first of 2024.

"China topped the list with a substantial trade deficit of USD 41.6 billion, as exports to China were USD 8.5 billion, while imports reached USD 50.1 billion during January-June 2024," it added.

The data analysis for the first half of this calendar year by the Global Trade Research Initiative (GTRI) showed India exports goods to 239 countries and out of these, 126 countries showed positive growth in exports. These nations account for 75.3 per cent of India's total exports.

Major countries with increased exports include the USA, UAE, Netherlands, Singapore, and China. However, exports declined in 98 countries, which account for 24.6 per cent of India's exports, with notable declines in Italy, Belgium, Nepal, and Hong Kong.

"The US is India's top export partner. Exports to the US increased from USD 37.7 billion in January-June 2023 to USD 41.6 billion in January-June 2024, reflecting a growth of 10.5 per cent. The UAE saw a significant rise in exports, increasing from USD 15.8 billion to USD 19.7 billion, marking a 24.9 per cent growth," it said.

In the first half of 2024, China remained the largest import supplier, with imports increasing from USD 46.2 billion to USD 50.1 billion.

"In FY2024, China was India's top trading partner, just ahead of the US. However, from January to June 2024, the US became India's largest trading partner, with total trade growing from USD 59.4 billion to USD 62.5 billion, a 5.3 per cent increase," GTRI Founder Ajay Srivastava said.

China followed as the second-largest trading partner, with total trade rising from USD 54.4 billion to USD 58.6 billion, marking a 7.7 per cent increase.

The merchandise exports growth was pushed by sectors like iron ore, pharmaceuticals, precious stones, basmati rice, chemicals, and smartphones.

On the services front, exports grew by 6.9 per cent to USD 178.2 billion, while the import imports grew by 5.79 per cent to USD 95 billion.

It also said that during January-June 2024, the country's merchandise imports rose 5.47 per cent to USD 345.3 billion.

It said that India's foreign trade (exports and imports), including both merchandise and services, reached a record USD 849 billion in the first half of 2024, up 5.8 per cent from the same period in 2023.

Sectorally, industrial products lead the export sector with USD 140.79 billion, accounting for 61.1 per cent of total exports, it said adding though the outbound shipments of agriculture, meat, and processed food dipped by 2.58 per cent to USD 26.06 billion, certain segments registered healthy growth.

Export of basmati rice rose by 24.3 per cent to USD 3.42 billion in January-June 2024. Spices too recorded a growth of 13.3 per cent to USD 2.42 billion during the period.

The shipments of buffalo meat increased from USD 1.64 billion in January-June 2023 to USD 1.78 billion in January-June 2024. However, sugar exports dipped by 40.47 per cent to USD 1.48 billion.

In the telecom, computer, and electronics segment, exports of smartphones increased from USD 7.5 billion in January-June 2023 to USD 10 billion in January-June 2024.

Shipments of electronics components, electric machinery, and medical and scientific Instruments too rose at a heavy pace during the period under review, the GTRI data showed.

"Export of Petroleum Products remained stable at USD 42.92 billion in January-June 2023 and USD 42.90 billion in January-June 2024, with a slight decrease of 0.05 per cent," it said.

It added that shipments of machinery, boilers, turbines, and parts experienced a significant increase of 12.66 per cent to USD 15.95 billion.

Similarly, exports of garments increased from USD 8.1 billion in the first half of 2023 to USD 8.25 billion in January-June 2024, an increase of 2.42 per cent.

Further on the imports side, industrial products lead the import sector with USD 166.54 billion, accounting for 48.2 per cent of total inbound shipments.

"Ores, minerals, and petroleum follow with USD 125.14 billion, making up 36.2 per cent. Diamonds, gold, and related products contribute USD 37.06 billion, or 10.7 per cent, to the total exports.

Imports of crude palm oil and sunflower oil rose by 0.29 per cent and 3.9 per cent to USD 2.86 billion and USD 1.96 billion during the period respectively.

"Import of Petroleum crude increased from USD 72.0 billion in January-June 2023 to USD 78.3 billion in January-June 2024, an increase of 8.8 per cent," it said adding "the diamonds, gold, and related products sector, imports rose significantly by 18.75 per cent to USD 37.06 billion in 2024".

It added that the imports of telecom, computer, and electronics products imports grew, from USD 35.22 billion in 2023 to USD 39.95 billion in 2024, reflecting a 13.42 per cent growth.

"India should continue to focus on increasing product quality and supply chain competitiveness. Since every big country is into inward mode, India should not surrender its policy space especially in new issues in free trade agreements and IPEF (Indo-Pacific Economic Framework)," he said.