India has trade surplus with 151 nations; deficit with 75 during Jan-June : Thinktank report
NEW DELHI : India has recorded trade surplus with as many as 151 countries such as the US and 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 that India does not need to worry about the trade deficit from importing crude oil and coal, however, it must focus on reducing the industrial goods imports, 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, representing 55.8 percent of its exports and 16.5 percent of its imports, totalling $72.1 billion,” GTRI said in a report. The biggest surpluses were with the USA ($21 billion) and the Netherlands ($11.6 billion) during January-June this year.
“India had a trade deficit with 75 countries, which accounted for 44.2 percent of its exports and 83.5 percent of its imports, resulting in a $185.4 billion deficit, much larger than India’s overall trade deficit,” it said, adding this situation highlights the need to reduce reliance on specific imports and strengthen domestic production.
The data analysis by the think tank also showed that with 23 of 75 countries, India’s trade deficit exceeded $1 billion and these countries accounted for 32.9 percent of India’s exports and 73.5 percent of its imports.
The top five countries with the highest trade deficits were China with $41.88 billion, Russia with $31.98 billion, Iraq with $15.07 billion, Indonesia with $9.89 billion and the UAE with $9.47 billion.
Remaining 18 countries with trade deficit exceeding $1 billion 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 ($2.60 billion), Germany ($2.10 billion), Vietnam ($2.07 billion), Malaysia ($1.49 billion), Venezuela ($1.47 billion), Peru ($1.10 billion), and Ireland ($1.10 billion).
It added that India should not be concerned about the trade deficit with 11 countries that primarily export crude oil, petroleum products and coal to India. But the country may keep a watchful eye about the trade deficit with 4 out of the 23 countries that primarily export gold, silver and diamonds to India as tariff cuts in gold and silver in this budget from 15 percent to 6 percent may lead to rise in imports, GTRI Founder Ajay Srivastava said.
On China, the report said that during January to June 2024, India exported $8.5 billion to China while importing $50.4 billion, resulting in a trade deficit of $41.9 billion. This low export and high import make China India’s largest trade deficit partner.
“Worse, 98.5 percent of imports from China, or $49.6 billion, are industrial goods. China accounts for 29.8 percent of India’s industrial goods imports. India must invest in deep manufacturing to cut dependence on import of critical industrial products from China,” Srivastava said.
Goods whose share of China in India’s global imports are more than 50 percent include umbrellas, artificial flowers, man-made filaments, rolling stock, glassware, leather goods, ceramic products, toys and musical instruments. It added that the updated trade data for FY24 now shows the US as India’s top merchandise trade partner overtaking China.
“The revision added an extra $2.8 billion in global imports, bringing India’s total imports to $678.2 billion. Of this increase, $1.4 billion came from the USA. As a result, India’s imports from the USA rose from $40.8 billion in May to $42.2 billion in August, making the USA India’s top trading partner with a total trade of $119.7 billion, surpassing China,” it said.