India records Trade Deficit with 9 out of 10 Trade Partners in FY24

NEW DELHI : India recorded a trade deficit with nine of its top ten trading partners during the 2023-24 fiscal year, according to official data released today.

The deficit increased significantly with major economies like China, Russia, South Korea and Hong Kong compared to the previous year.

China remained India’s largest trading partner with USD 118.4 billion in two-way commerce, slightly surpassing the US at USD 118.28 billion.

However, India maintained a substantial USD 36.74 billion trade surplus with the United States.

The trade deficit with China ballooned to USD 85 billion in 2023-24, up from USD 83.2 billion the year before. The deficit with Russia grew to USD 57.2 billion from USD 43 billion, while gaps with South Korea and Hong Kong increased to USD 14.71 billion and USD 12.2 billion respectively.

On the other hand, India’s trade deficits narrowed with the UAE, Saudi Arabia, Indonesia and Iraq over the last fiscal year.

While bilateral trade deficits are not necessarily concerning, experts warn that an overall rising deficit can strain a country’s currency, external debt and foreign reserves if left unchecked.

“A growing trade deficit requires boosting exports, reducing non-essential imports, developing domestic industries and prudent management of currency and debt levels,” said Mr. Ajay Srivastava of the Global Trade Research Initiative.

India’s total trade deficit for 2023-24 narrowed slightly to USD 238.3 billion compared to USD 264.9 billion the previous year.

The government aims to further rein in the deficit through policies promoting export competitiveness and self-reliance in strategic sectors.