India records trade deficit with 9 of top 10 trading partners in 2023-24

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Last Updated28/05/2024

The data also showed that the deficit with China, Russia, Korea, and Hong Kong increased in the last fiscal compared to 2022-23
- However, the trade gap with the UAE, Saudi Arabia, Russia, Indonesia, and Iraq narrowed.
China has emerged as India's largest trading partner with $118.4 billion of two-way commerce in 2023-24, edging past the U.S.
- Washington was the top trading partner of New Delhi during 2021-22 and 2022-23.
India has a free trade agreement with four of its top trading partners
- Singapore, the UAE, Korea and Indonesia (as part of the Asian bloc).
America is one of the few countries with which India has a trade surplus. The surplus is also there with the U.K., Belgium, Italy, France and Bangladesh.

Trade deficit which is the difference between imports and exports.
According to trade experts, a deficit is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports.
- However, it puts pressure on the domestic currency.
Global Trade Research Initiative (GTRI) said that a bilateral trade deficit with a country isn't a major issue unless it makes us overly reliant on that country's critical supplies.
A rising trade deficit, even from importing raw materials and intermediates, can cause the country's currency to depreciate because more foreign currency is needed for imports.
- This depreciation makes imports more expensive, worsening the deficit
To cover the growing deficit, the country might need to borrow more from foreign lenders, increasing external debt and this can deplete foreign exchange reserves and signal economic instability to investors, leading to reduced foreign investment.
Cutting the trade deficit requires boosting exports, reducing unnecessary imports, developing domestic industries, and managing currency and debt levels effectively