US surpasses China as India’s biggest trading partner
The US has consistently been India’s largest market for services exports, but latest trade data show overseas sales of merchandise goods to that country overtook China, making it the largest bilateral trading nation of Asia’s third-largest economy.
The US was India’s top trading partner in 2021-22, surpassing China, latest data from the commerce ministry showed, pointing to post-pandemic realignments of global trade and strengthening of ties between two of the world’s largest democracies.
The US has consistently been India’s largest market for services exports, but latest trade data show overseas sales of merchandise goods to that country overtook China, making it the largest bilateral trading nation of Asia’s third-largest economy. India’s merchandise exports touched a record $418 billion in 2021-22, exceeding the Centre’s target by about 5% and clocking a 40% growth over the previous year, showed official data in April.
According to the commerce ministry’s figures, bilateral trade between the US and India in 2021-22 leapt 48.3% to stand at $119.42 billion against $80.51 billion in 2020-21, as global producers and importers, including from India, look to cut reliance on China and shift to more reliable markets and supply lines.
Beijing’s strict zero-Covid policy, which is weighing on its global trade, could further reset trade lines, as advanced and emerging nations face heavy losses due to raw material shortages and supply chain woes.
The increased costs of China’s Covid policy comes at a time when the world is already grappling with economic shocks of the Ukraine war, which has triggered a commodity-price spiral and hobbled a nascent rebound from the pandemic.
China was India’s top trading partner for five years straight between 2013-14 and 2017-18, following which the UAE took over the largest trading destination for Asia’s third-largest economy. China regained the position briefly in 2020-21.
“The US is now our largest merchandise trading partner, and the point to be noted is that we have a trade surplus with the US,” said Ajay Sahai, director-general of the Federation of Indian Export Organisations. In 2021-22, India had a trade surplus of $32.8 billion with the US.
