India has recorded a trade surplus of $36.74 billion with the U.S. in 2023-24, making America one of the few countries with which India has a trade surplus. However, India has a trade deficit, the difference between imports and exports, with nine of its top 10 trading partners, including China, Russia, Singapore, and Korea, in 2023-24.
The trade deficit with China rose to $85 billion, Russia to $57.2 billion, Korea to $14.71 billion and Hong Kong to $12.2 billion in 2023-24. China has emerged as India’s largest trading partner with $118.4 billion of two-way commerce in 2023-24, edging past the U.S.
The bilateral trade between India and the U.S. stood at $118.28 billion in 2023-24. India’s trade surplus with the US – its largest trading partner – was $19.59 billion in the April-October period of 2023-24.
However, with China, the second largest partner, the deficit was a whopping $51.11 billion, followed by a $33.56 billion gap with Russia, the fourth largest trade partner of India. The deficit with the third largest trade partner, the UAE, was $6.83 billion.
India’s total trade deficit in the last fiscal narrowed to $238.3 billion as against $264.9 billion in the previous fiscal. The trade deficit with Saudi Arabia, Indonesia, Iraq, Singapore and South Korea also narrowed in the April-October period.
According to trade experts, a deficit is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports. However, it puts pressure on the domestic currency. Cutting trade deficit requires boosting exports, reducing unnecessary imports, developing domestic industries, and managing currency and debt levels effectively.