The think tank’s data analysis also showed that with 23 out of 75 countries, India’s trade deficit exceeded $1 billion | (Photo: Shutterstock)
India has registered a trade surplus with 151 countries, including the United States and the Netherlands, while the country has a trade deficit with 75 nations, including China and Russia, during the first half of this year, according to think tank GTRI.
The Global Trade Research Initiative (GTRI) said India need not worry about trade deficit arising from import of crude oil and coal, however, it should focus on reducing imports of industrial goods, especially from countries like China, as these threaten India’s economic sovereignty.
“Between January and June 2024, India had a trade surplus with 151 countries, accounting for 55.8 per cent of its exports and 16.5 per cent of its imports, totalling $72.1 billion,” GTRI said in a report.
The largest surpluses were recorded in the United States ($21 billion) and the Netherlands ($11.6 billion) between January and June this year.
“India had a trade deficit with 75 countries, which accounted for 44.2 per cent of its exports and 83.5 per cent of its imports, resulting in a deficit of $185.4 billion, much larger than India’s overall trade deficit,” it said, adding that this situation highlights the need to reduce dependence on specific imports and strengthen domestic production.
The data analysis by the think tank also showed that with 23 out of 75 countries, India’s trade deficit exceeded $1 billion and these countries accounted for 32.9 per cent of India’s exports and 73.5 per cent of its imports.
The five countries with the largest trade deficits were China at $41.88 billion, Russia at $31.98 billion, Iraq at $15.07 billion, Indonesia at $9.89 billion and the United Arab Emirates at $9.47 billion.
The remaining 18 countries with a trade deficit exceeding $1 trillion include Saudi Arabia ($9.43 billion), Switzerland ($8.46 billion), South Korea ($6.93 billion), Japan ($6.13 billion), Qatar ($5.76 billion), Hong Kong ($5.21 billion), Taiwan ($4.28 billion), Australia ($3.34 billion), Thailand ($2.6 billion), Germany ($2.1 billion), Vietnam ($2.07 billion), Malaysia ($1.49 billion), Venezuela ($1.47 billion), Peru ($1.1 billion) and Ireland ($1.1 billion).
He added that India should not worry about the trade deficit with 11 countries that mainly export crude oil, petroleum products and coal to India, such as Angola, Iraq, Saudi Arabia, Australia and Nigeria.
But the country “can keep a vigilant watch on the trade deficit with 4 of the 23 countries that primarily export gold, silver and diamonds to India as the tariff cuts on gold and silver in this budget from 15 per cent to 6 per cent may lead to a surge in imports,” GTRI founder Ajay Srivastava said.
And these nations include Peru, Switzerland, the United Arab Emirates and Hong Kong.
Regarding China, the report notes that between January and June 2024, India exported $8.5 billion to China while importing $50.4 billion, resulting in a trade deficit of $41.9 billion.
These low exports and high imports make China India’s largest deficit trading partner.
“What’s worse, 98.5 per cent of China’s imports, or $49.6 billion, are industrial goods. China accounts for 29.8 per cent of India’s industrial goods imports. India must invest in manufacturing to reduce dependence on imports of critical industrial goods from China,” Srivastava said.
Goods whose share of China in India’s global imports is more than 50 percent include umbrellas, artificial flowers, synthetic filaments, rolling stock, glassware, leather goods, ceramic products, toys and musical instruments.
He added that updated trade data for FY24 now shows the US as India’s top merchandise trading partner, overtaking China.
“The revision added an additional $2.8 billion to overall imports, taking India’s total imports to $678.2 billion. Of this increase, $1.4 billion came from the United States. As a result, India’s imports from the United States increased from $40.8 billion in May to $42.2 billion in August, making the United States India’s largest trading partner with total trade of $119.7 billion, overtaking China,” it said.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 1, 2024 | 11:43 am IS
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