Synopsis: This report discusses the top trade partners of India considering the recent bilateral trade volumes and the key goods traded and economic manifestations in FY 2023-24 and beyond.
India is one of the 20 leading trading economies in the world and its total merchandise trade has been over 1.6 trillion in FY 2023-24 after various exports of pharmaceuticals, textiles, and petroleum products and imports of electronics, crude oil, and machinery.
Such alliances define the India-based 3.9 trillion GDP, supply chains, energy security, geopolitical plans in response to global changes, such as supply chain diversification in the aftermath of COVID. Based on the data of the Ministry of Commerce and trade analysis, the following detailed report is a list of the top 10 partners based on their total trade volume (exports and imports) with important goods and trade balances determined based on the estimates of FY 2024 estimates.
Top 10 Trading Partners
China ($101.75 billion, 15.06% of total trade)
China has been the largest trading partner to India where the importation is far exceeding the exportation and the result is a deficit of 85 billion dollars. India is a net importer of electronics (30 billion+), machinery, chemicals, and pharmaceutical APIs whereas the country is a net exporter of iron ore, marine products, cotton, and organic chemicals (16 billion). This disparity shows the manufacturing advantage in China, but India wants to increase its competitiveness through PLI initiatives.
Russia ($61.43 billion, 9.10%)
In the Ukraine war, Russia shot up as the second-largest ally with a discounted oil leaving India with the imports of 60-billion barrels of crude petrol and fertilisers. The pharma, electronic and machinery with export valued at 1.4 billion to Russia form part of the strengthening connections through rupee-ruble methods even after Western sanctions.
United Arab Emirates (48.02 billion, 7.11%).
UAE, with post-CEPA, supplies an export of 37billion to 31billion imports of crude oil and gold respectively. This is a healthy trade which sustains the energy requirement of India and remittance of 3.5 million Indian expatriates.
United States ($40.77-41.62 billion, ~6%)
The US is the largest export market of India with gems, pharmaceuticals (10 billion), textiles, and engineering goods being its largest outflows. Aircraft, gems, and electronic imports are also included (38 billion) and supported by iCET tech programs in spite of a shrinking surplus.
Saudi Arabia ($26.82 billion, 4.71%)
India (20 percent of its crude oil imports, which are worth about 25 billion dollars) and petrochemicals are also supplied by Saudi Arabia. Export activities in India include rice, textile, and machinery exports (including the exports of 1.8 billion dollars) and the trade has been growing with the Vision 2030 setups.
Iraq ($26.14 billion, 4.44%)
Iraq also supplies cheap crude oil (25 billion imports) which is very important in refineries such as Jamnagar. The exports are relatively small with $1.14 billion which is mostly made up of pharmaceuticals and meat products which underline the energy dependency.
Switzerland ($21.06 billion, 3.14%)
Luxury watches, pharmaceuticals and gold (Switzerland) imports 20 billion, India exports textiles and engineering products (1 billion). Trade is surplus-laden and stable through precious metals re-exports.
Indonesia ($20.99 billion, 3.47%)
Indonesia exports coal, palm oil to the energy and edible oil industries of India (15 billion each). The exports also have petroleum products and iron ore (5billion) and coal dependence has environmental issues.
Singapore ($19.48 billion, 3.14%)
Singapore is a trade entrepot, which has imported refined petroleum ($10 billion) and chemicals (India) and has also exported electronics and gold (Singapore) to countries. FTAs also improve both ways of flow in services as well. Many Indian companies expanding global trade operations also consider setting up a branch office in Singapore to access international markets and financial services. We recommend professional services that help businesses handle registration, compliance, and operational setup efficiently.
South Korea ($19.42 billion, 3.13%)
Electronics, steel and organic chemicals are sourced by South Korea (import value of 15 billion). The exports of petroleum and shrimp by India, which amount to 4 billion dollars, are also developing through CEPA that is interested in auto and shipbuilding synergies.
Trade Trends and Challenges
In FY24, India recorded a trade deficit of 240billion due to energy (40% imports) and electronics of China. Diversification through FTAs with the UAE, Australia, and EU are the means to increase the exports to $1 trillion by 2030, and Atmanirbhar Bharat prohibits the unnecessary imports. The opportunities present in semiconductors and EVs are available like US-China tensions through geopolitics.
Conclusion
The leading trading partners of India highlight its weaknesses in terms of energy and its export capabilities where China and Russia supply most of the volumes and UAE and US provide the same balanced growth. Deficits can be reduced through strategic FTAs, production incentives and rupee trade so that India becomes a 5 trillion economy by 2027. The continued reforms will enhance these associations to a prosperous level.
Written By Jayanth R Pai
