US is top trading partner of India in FY25; trade deficit with China widens

The United States continued to be India’s largest trading partner for the fourth year in a row in the financial year 2024-25, with total bilateral trade reaching $131.84 billion, according to official data released by the Ministry of Commerce.

 

This highlights the growing strength of India-US economic ties, especially in sectors like pharmaceuticals, technology, energy, and diamonds.

 

India-US trade: Growth on both sides

 

India’s exports to the US grew by 11.6 per cent in 2024-25, rising to $86.51 billion, compared to $77.52 billion in 2023-24.

 

Meanwhile, imports from the US also increased by 7.44 per cent to $45.33 billion, up from $42.2 billion in the previous year.

 

 

This growth resulted in a trade surplus of $41.18 billion for India, meaning India exported much more to the US than it imported. This surplus was $35.32 billion in 2023-24.

 

Key Indian exports to the US in 2024-25

 

Drug formulations and biologicals – $8.1 billion

Telecom instruments – $6.5 billion

Precious and semi-precious stones – $5.3 billion

Petroleum products – $4.1 billion

Gold and other precious metal jewellery – $3.2 billion

Readymade garments (mainly cotton) – $2.8 billion

Products of iron and steel – $2.7 billion

 

Major US imports into India

 

Crude oil – $4.5 billion

Petroleum products – $3.6 billion

Coal and coke – $3.4 billion

Cut and polished diamonds – $2.6 billion

Electric machinery – $1.4 billion

Aircraft, spacecraft and their parts – $1.3 billion

Gold – $1.3 billion

 

India and the US are currently negotiating a trade agreement, aiming to significantly increase the two-way trade in goods and services. Their shared goal is to take the total commerce to $500 billion by 2030, up from $191 billion at present.

 

Trade deficit with China widens

 

Even as the US leads, China remains India’s second-largest trading partner, with total bilateral trade reaching $127.7 billion in 2024-25, up from $118.4 billion in the previous year.

 

However, India’s trade with China remained heavily imbalanced. India’s exports to China fell by 14.5 per cent, down to $ 14.25 billion from $16.66 billion in 2023-24.

 

At the same time, imports from China increased by 11.52 per cent, reaching $113.45 billion in 2024-25, up from $101.73 billion. This led to the trade deficit with China widened by about 17 per cent, from $85.07 billion in 2023-24 to $99.2 billion in the last fiscal.

 

China was India’s top trading partner earlier, holding the position from 2013-14 to 2017-18 and again in 2020-21. Before that, it was the United Arab Emirates (UAE).  ALSO READ | India's trade deficit widens to $21.54 bn, exports see 0.7% growth in March

 

UAE third among India’s leading trade allies

 

In 2024-25, the UAE remained India’s third-largest trading partner, with total trade amounting to $100.5 billion.

 

India’s trade dynamics are shifting steadily, with stronger ties to the US and growing trade challenges with China. As India looks to strengthen its economic position globally, partnerships with countries like the US and UAE are proving increasingly important, while the trade imbalance with China remains a concern for policymakers.

 

[With inputs from PTI]