September 1st 2024.
New Delhi: According to a recent report by GTRI, India has seen a trade surplus with a total of 151 countries during the first half of this year. This includes countries such as the US and Netherlands, while the country has a trade deficit with 75 nations including China and Russia. The think tank has suggested that India should focus on reducing its imports of industrial goods, particularly from China, in order to maintain its economic sovereignty.
GTRI's report states that between January and June 2024, India's trade surplus with 151 countries amounted to USD 72.1 billion, representing 55.8% of its exports and 16.5% of its imports. The largest surpluses were with the USA and Netherlands. On the other hand, India's trade deficit with 75 countries accounted for 44.2% of its exports and a whopping 83.5% of its imports, resulting in a deficit of USD 185.4 billion. This highlights the need for India to reduce its reliance on specific imports and strengthen its domestic production.
Further analysis by GTRI revealed that India's trade deficit exceeded USD one billion with 23 of the 75 countries. These countries accounted for 32.9% of India's exports and 73.5% of its imports. The top five countries with the highest trade deficits were China, Russia, Iraq, Indonesia, and the UAE. Additionally, there are 18 other countries with a trade deficit exceeding USD one billion, including Saudi Arabia, Switzerland, South Korea, Japan, Qatar, Hong Kong, Taiwan, Australia, Thailand, Germany, Vietnam, Malaysia, Venezuela, Peru, and Ireland.
The report also notes that India should not be overly concerned about the trade deficit with 11 countries that primarily export crude oil, petroleum products, and coal to India. These countries include Angola, Iraq, Saudi Arabia, Australia, and Nigeria. However, GTRI founder Ajay Srivastava suggests keeping a watchful eye on the trade deficit with the four out of 23 countries that primarily export gold, silver, and diamonds to India, as the recent budget's tariff cuts on these items may lead to a rise in imports. These countries are Peru, Switzerland, UAE, and Hong Kong.
The report also sheds light on India's trade relationship with China, stating that during January to June 2024, India exported USD 8.5 billion to China while importing USD 50.4 billion, resulting in a trade deficit of USD 41.9 billion. This makes China India's largest trade deficit partner. Additionally, 98.5% of India's imports from China are industrial goods, accounting for 29.8% of India's total industrial goods imports. Srivastava suggests that India should invest in deep manufacturing to reduce its dependence on imports of critical industrial products from China.
The report also mentions specific goods that have a high share of China in India's global imports, including umbrellas, artificial flowers, man-made filaments, rolling stock, glassware, leather goods, ceramic products, toys, and musical instruments. It also updates the trade data for FY24, revealing that the USA has overtaken China as India's top merchandise trade partner. This is due to a revision that added an extra USD 2.8 billion in global imports, bringing India's total imports to USD 678.2 billion. Of this increase, USD 1.4 billion came from the USA, making it India's top trading partner with a total trade of USD 119.7 billion, surpassing China.
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