India’s bilateral trade with the US has surpassed that with China, reaching USD 128.55 billion in fiscal year 2022-23. The rise in trade with the US could be attributed to diversification of business and India’s emergence as a trusted trading partner. Introduction: India’s trade relations with the US and China have seen significant changes in recent years. In the fiscal year 2022-23, the US has displaced China as India’s biggest trading partner, and the trend is expected to continue. This article explores the reasons behind this shift in trade and its implications for both countries.
The United States has emerged as India’s biggest trading partner in the fiscal year 2022-23, displacing China from the top spot. The bilateral trade between the two nations increased by 7.65% to USD 128.55 billion, as per the provisional data of the commerce ministry. In comparison, the trade between India and the US stood at USD 119.5 billion in the fiscal year 2021-22 and USD 80.51 billion in 2020-21.
The export of goods, such as pharmaceuticals, engineering products, and gems and jewellery, to the US has contributed to the increase in bilateral trade. The trend of increasing trade is expected to continue in the coming years, with both countries aiming to strengthen their economic ties.
In contrast, the two-way commerce between India and China declined by approximately 1.5% to USD 113.83 billion in the fiscal year 2022-23, down from USD 115.42 billion in the previous fiscal year. The exports to China dipped by about 28% to USD 15.32 billion in the fiscal year 2022-23, while imports rose by 4.16% to USD 98.51 billion, resulting in a widened trade gap of USD 83.2 billion, up from USD 72.91 billion in the previous fiscal year.
According to experts, the decline in trade with China and the rise in trade with the US could be due to global firms reducing their dependence on China for supplies and diversifying their business into other countries like India. India is also emerging as a trusted trading partner, providing huge trade opportunities for the US, given that it is the world’s third-largest consumer market and the fastest-growing market economy.
In terms of trade surplus, the US is one of the few countries with which India has a trade surplus, amounting to USD 28 billion in the fiscal year 2022-23. The 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 the major imports from the US include petroleum, rough diamonds, liquefied natural gas, gold, coal, waste and scrap, and almonds.
In conclusion, the bilateral trade between India and the US has increased significantly, making the US India’s biggest trading partner in the fiscal year 2022-23. The decline in trade with China and the rise in trade with the US could be attributed to various factors, including the diversification of business and India’s emergence as a trusted trading partner.
