India’s Exports to America, Imports from China Reach All-Time High in 2024: Why in News

India’s Exports to America, Imports from China Reach All-Time High in 2024: Why in News?

• Significant surge in India’s exports to the United States, reaching an all-time high of $34.06 billion in the first four months of FY25 (April–July 2024)
• Imports from China also hit a record $113.45 billion in FY24, highlighting India’s growing trade deficit with China
• Structural dependency on China for critical imports like electronics and chemicals raised concerns amid geopolitical tensions
• Recent trade data released by the Commerce Ministry underscores India’s evolving trade dynamics

Relevance for UPSC Prelims & Mains:

• UPSC Prelims:
  • Test of current economic data, such as export figures ($34.06 billion to the US, $113.45 billion imports from China in FY24)
  • Questions on India’s trade policy, trade deficit, and dependency on China for imports
  • Potential focus on key sectors like electronics, chemicals, and pharmaceuticals
• UPSC Mains:
  • GS Paper III (Economy):
    • Analysis of India’s trade policy, balancing imports from China, and strategies to reduce trade deficit
    • Discussion on “Make in India” and self-reliance (Atmanirbhar Bharat) in the context of import dependency
    • Example Question: “Evaluate India’s trade relationship with the US and China, and suggest measures to address the trade imbalance with China”
  • GS Paper II (International Relations):
    • Impact of India-China trade on bilateral relations and border tensions
    • Relevance of trade diversification amid global supply chain shifts
    • Example Question: “Discuss how India’s trade dependency on China affects its geopolitical strategy”
  • Essay Paper:
    • Topics on economic self-reliance, globalization, or India’s role in global trade
    • Example Topic: “India’s Trade Dilemma: Balancing Growth and Self-Reliance”

Key Points of News:

• India’s exports to the US surged to $34.06 billion in the first four months of FY25, a healthy surplus year in services trade with imports at $19.85 billion
• Imports from China reached $113.45 billion in FY24, up 3.27% from $109.73 billion in FY23, driven by electronics, chemicals, and pharmaceuticals
• Trade deficit with China widened to $101.73 billion in FY24 from $98.50 billion in FY23, a concern amid a 4.15% dip in exports to China ($16.67 billion)
• Structural dependency on China increased, with imports rising from 94.57% to 113.45% of exports to China over 2020–24
• Expert warnings of a “competitiveness crisis” due to reliance on Chinese imports, urging a shift toward domestic manufacturing
• Organic chemicals declined by 10% in exports to China, while engineering goods exports fell to $10.82 billion in FY24 from $11.27 billion in FY23
• Trade with Brazil and coffee-producing nations like Ethiopia grew, signaling diversification efforts
• India’s total merchandise exports dipped to $437.06 billion in FY24 from $451.07 billion in FY23, reflecting global economic challenges