In the first seven months of the 2023-24 fiscal year, India experienced a trade deficit with nine out of its top 10 trading partners, with the United States being the only exception where exports exceeded imports, according to a report from Economic Times.
Data from the Ministry of Commerce and Industry revealed that India's trade surplus with the US, its largest trading partner, stood at $19.59 billion from April to October.
However, a substantial deficit of $51.11 billion was recorded with China, the second-largest partner, followed by a $33.56 billion gap with Russia, India's fourth-largest trade partner.
The deficit with the UAE, the third-largest trade partner, amounted to $6.83 billion.
Imports from Russia primarily include petrol, high-calorific value coal, coke and briquettes, and fertiliser, especially potash. An official noted a decline in India's exports of gems and jewelry to Hong Kong and the US. The trade gap with Hong Kong reached $7.59 billion.
For the April-November period of FY24, India's total merchandise exports contracted by 6.51 per cent to $278.8 billion, while imports fell by 8.67 per cent to $445.15 billion, according to data released in December.
A trade deficit was also recorded with Saudi Arabia, Indonesia, Iraq, Singapore, and South Korea during the April-October period.
The deficit with Indonesia was attributed to edible oil, and the official mentioned challenges arising from restrictions on rice and sugar exports. India has traditionally faced a deficit with South Korea despite a Comprehensive Economic Partnership Agreement signed in 2009.
Another official cited reduced tea and rice imports from India by Iran due to foreign exchange issues and the finalisation of the rupee-payment mechanism.
The Federation of Indian Export Organisations (FIEO) has recommended an aggressive marketing strategy focusing on vehicles, jewellery, electronic items, auto components, marine products, apparel, insecticides, iron, and steel to tap into an additional $112 billion export potential in 10 countries, including the US and UK, over three years.
Trade experts believe that despite the global trade environment's uncertainty, reviews of existing free trade agreements are unlikely to boost India's exports, as partner countries benefiting from the pacts may not be willing to agree to revisions.
Bhuvan Krishna is Staff Writer at Swarajya.
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