China Emerges as India's Largest Trading Partner in FY 2023-24, Overtaking US in $118.4 Billion Trade

India-China economic ties: Surprising partnerships in the BRICS landscape. Despite geopolitical tensions, the Asian giants continue to advance their economic ties.

Despite persistent rumors of geopolitical rivalries and border clashes, the economic ties between India and China continue to defy simplistic narratives of pure competition or rivalry. Data from the Global Trade Research Initiative (GTRI) reveals that China has emerged as India's largest trading partner for the fiscal year 2023-24, with a staggering $118.4 billion in two-way commerce – slightly edging past the United States.

This development underscores the intricate dynamics between the two Asian giants, who are not only members of the influential BRICS bloc but also economic powerhouses with intertwined trade interests. While political tensions may often dominate headlines, the economic realities on the ground paint a more nuanced picture.

India's exports to China witnessed a healthy 8.7% rise to $16.67 billion in the last fiscal year, driven by robust growth in sectors such as iron ore, cotton textiles, handlooms, spices, fruits and vegetables, and plastics. However, imports from the northern neighbor surged by a staggering 3.24% to $101.7 billion, resulting in a widening trade deficit of a concerning $85.09 billion.

"This growth in imports led to an expanding trade deficit, highlighting concerns over stagnant exports amidst rising imports," remarked Ajay Srivastava, the founder of GTRI, casting a spotlight on the imbalances that persist despite the overall growth in bilateral trade.

Conversely, India's trade dynamics with the United States – its top trading partner in the previous two fiscal years – tell a different story. While exports to the US dipped by 1.32% to $77.5 billion, imports from the Western ally declined by a more substantial 20% to $40.8 billion, resulting in an expanded trade surplus of $36.74 billion for India.

As members of the BRICS alliance, India and China's economic fortunes are deeply intertwined, defying simplistic narratives of pure competition or rivalry. Their relationship is a complex web of cooperation, competition, and strategic maneuvering, which reflects the many different sides of global economic interdependence.

With other BRICS partners such as the United Arab Emirates, Russia, and Saudi Arabia, as well as relations with Singapore, rounding out India's major trading partners, it is clear that the country's economic fortunes are intrinsically linked to several different global players. As the world grapples with shifting geopolitical alliances and economic upheavals, the India-China dynamic serves as a microcosm of the intricate web of partnerships and rivalries that shape the modern global economy.