China has once again become India's top trading partner, surpassing the United States for the first time in two years, according to the latest data from the Global Trade Research Initiative (GTRI). Bilateral trade between India and China in the fiscal year 2024 reached $118.4 billion, with imports increasing by 3.24% to $101.7 billion and exports growing by 8.7% to $16.67 billion.
On the other hand, the trade relationship between India and the US experienced a slight downturn. Bilateral trade in the fiscal year 2024 totaled $118.3 billion, with Indian exports declining slightly by 1.32% to $77.5 billion and imports dropping by 20% to $40.8 billion.
The economic interaction between India and China has attracted significant attention, especially due to India's reliance on Chinese imports in crucial sectors such as telecommunications, pharmaceuticals, and advanced technology.
The GTRI report highlighted this dependence, noting that India imported $4.2 billion worth of telecom and smartphone parts, representing 44% of total imports in this category, and $3.8 billion worth of laptops and PCs, constituting 77.7% of India’s imports in this sector.
In response to this trend, India has implemented several strategies to reduce its reliance on Chinese imports. These measures include the implementation of production-linked incentive schemes (PLI), the imposition of anti-dumping duties, and the enforcement of quality control orders. Additionally, India's import of lithium-ion batteries, primarily sourced from China and crucial for electric vehicles, reached $2.2 billion, accounting for 75% of such imports. This underscores China's pivotal role in India's efforts towards transportation electrification.
