India’s economic engagement with the United States continued its upward trajectory in the fiscal year 2024-25, maintaining the US as its top trading partner for the fourth consecutive year. According to official figures, bilateral trade between the two nations amounted to $131.84 billion during the period.
In contrast, India’s trade deficit with China grew significantly, reaching an all-time high of $99.2 billion. This spike came despite a sharp 14.5% fall in exports to China, which dropped from $16.66 billion in FY24 to $14.25 billion in FY25. Imports from China, however, rose by 11.52%, totaling $113.45 billion—up from $101.73 billion the previous year.
Two-way trade with China stood at $127.7 billion in 2024-25, making it India’s second-largest trading partner. The commerce ministry’s historical data shows China held the top spot from 2013-14 to 2017-18 and again in 2020-21, before being overtaken by the US from 2021-22 onwards.
Commenting on the widening gap, the Global Trade Research Initiative (GTRI) emphasized the structural nature of India’s dependency on Chinese imports. Founder Ajay Srivastava noted that the soaring demand for electronics, EV batteries, solar modules, and industrial inputs—areas where China dominates—was fueling the import surge. He also flagged that India’s production-linked incentive (PLI) schemes are inadvertently increasing import volumes due to reliance on foreign components.
“What’s worrying is that India’s exports to China are now lower than in FY2014, despite a weaker rupee today,” Srivastava said. “This isn’t just about trade; it reveals a deeper competitiveness challenge that must be urgently addressed through domestic manufacturing reforms.”
Meanwhile, the UAE retained its position as India’s third-largest trading partner with a trade volume of $100.5 billion in FY25.
India’s exports to the US grew 11.6% to $86.51 billion, while imports from the US increased 7.44% to $45.33 billion, leading to a trade surplus of $41.18 billion—up from $35.32 billion the previous year.
Key Indian exports to the US included pharmaceuticals, telecom equipment, gems and jewellery, petroleum products, and textiles. On the import side, India sourced crude oil, coal, diamonds, aircraft parts, and machinery from the US.
The Indo-US trade relationship is expected to expand further, with ongoing negotiations aiming to boost overall trade in goods and services to $500 billion by 2030, from the current $191 billion.
