In a historic moment for India, the US has surpassed China to become India’s biggest trading partner in the fiscal year 2022-23. This was anticipated given the growing ties between India and the US in recent times.
As per the provisional data released by the Ministry of Commerce, the bilateral trade between US and India grew by 7.65% to USD 128.55 billion in 2022-23 from USD 119.5 billion in 2021-22. A 2.81% increase in exports to the US reaching USD 78.31 billion and the 16% growth in imports to USD 50.24 billion in the same period is the primary reason behind the surge.
On the other hand, during the same fiscal, India’s mutual trade with China slipped by 1.5% to USD 113.83 billion in the fiscal year 2022-23 as compared to USD 115.42 billion in 2021-22.
Exports to China dipped by around 28% to USD 15.32 billion while imports grew by 4.16% to USD 98.51 billion. The trade gap between India and the dragon nation has widened to USD 83.2 billion from USD 72.91 billion in the previous fiscal year.
As per experts, the bilateral trade between India and the US will continue to increase in the coming years as both countries aim to strengthen their economic ties further.
The Federation of Indian Export Organisations (FIEO) President, A. Sakthivel, stated that increasing exports of goods such as pharmaceuticals, engineering, gems, and jewellery has helped India push its shipments to the US. FIEO Vice President Khalid Khan added that As global firms look to reduce their dependency on China for supplies and diversify their businesses to other nations, India is emerging as a trusted trading partner and a preferred choice.
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According to Rakesh Mohan Joshi, Director of the Indian Institute of Plantation Management (IIPM), Bangalore, “India provides huge trade opportunities for the US as it is the world’s third-largest consumer market and the fastest-growing market economy. Major export items from India to the US include petroleum, polished diamonds, pharmaceutical products, jewellery, light oils and petroleum, frozen shrimp, and made-ups, while major imports from the US include petroleum, rough diamonds, liquefied natural gas, gold, coal, waste and scrap, and almonds”.
The US is among the few nations with which India has a trade surplus. India has a trade surplus of USD 28 billion with the US in 2022-23.
As per the data from the Ministry of Commerce, China emerged as India’s top trading partner from 2013-14 until 2017-18 and in 2020-21.
Before China, the UAE was the country’s largest trading partner. In 2022-23, the UAE was India’s third-largest trading partner with USD 76.16 billion, followed by Saudi Arabia with USD 52.72 billion, and Singapore with USD 35.55 billion.