India's Trade Surplus with US Grows Amidst Shifting Global Dynamics

In a revealing fiscal year-end analysis, India's trade surplus with the United States has seen a significant increase, reaching $41 billion. This growth is attributed to an 11.6% rise in exports to $86.5 billion, outpacing the 7.4% increase in imports from the US, which totaled $45.3 billion. The trend emerges at a time when trade balances are under global scrutiny, especially with former President Donald Trump's focus on narrowing such gaps.

China Trade Deficit Nears $100 Billion Mark

Conversely, India's trade deficit with China has widened alarmingly, nearing the $100 billion threshold. A sharp 11.5% jump in imports to $113.5 billion, against a backdrop of declining exports to $14.2 billion, underscores the growing imbalance. China has now slipped to become India's fifth-largest export destination, a position overtaken by the UK, as per provisional data from the commerce department.

Key Sectors Influencing Trade Trends

The decline in exports to China was significantly influenced by reduced ore shipments, particularly iron, which halved to $1.5 billion. Similarly, sectors like iron and steel, aluminum, and cotton witnessed downturns. On the brighter side, the US market saw a surge in smartphone exports, notably iPhones, contributing to the export growth. Meanwhile, smartphone imports from China plummeted by 70%, although electronic components saw an uptick.

Other notable imports from China included computers and machinery, ranging from air conditioners to embroidery equipment. Interestingly, photovoltaic cells and lithium-ion imports saw a decline, pointing to shifting priorities in India's import basket.