The United States has once again become India’s largest trading partner for the fourth year in a row in 2024-25. The total trade between the two countries reached USD 131.84 billion, according to government data.

In the last financial year, India exported goods worth USD 86.51 billion to the US, which is 11.6% more than the previous year (USD 77.52 billion in 2023-24). At the same time, India imported goods worth USD 45.33 billion from the US, which is 7.44% more than last year (USD 42.2 billion).

This led to a trade surplus of USD 41.18 billion with the US in 2024-25, an increase from USD 35.32 billion the year before.

India’s main exports to the US included:

  • Drug formulations and biologicals: USD 8.1 billion
  • Telecom instruments: USD 6.5 billion
  • Precious and semi-precious stones: USD 5.3 billion
  • Petroleum products: USD 4.1 billion
  • Gold andother precious jewellery: USD 3.2 billion
  • Cotton garments and accessories: USD 2.8 billion
  • Products of iron and steel: USD 2.7 billion

India’s major imports from the US included:

  • Crude oil: USD 4.5 billion
  • Petroleum products: USD 3.6 billion
  • Coal and coke: USD 3.4 billion
  • Cut and polished diamonds: USD 2.6 billion
  • Electric machinery: USD 1.4 billion
  • Aircraft and spacecraft parts: USD 1.3 billion
  • Gold: USD 1.3 billion

Both countries are currently working on a trade agreement to strengthen their trade relationship further. Their goal is to increase the total trade of goods and services from the present USD 191 billion to USD 500 billion by 2030.

Trade deficit with China widens to USD 99.2 billion

While trade with the US grew, India’s trade deficit with China hit a record high of USD 99.2 billion in 2024-25. This is an increase of about 17% from USD 85.07 billion in 2023-24.

India's exports to China fell by 14.5%, from USD 16.66 billion in 2023-24 to USD 14.25 billion in 2024-25. On the other hand, imports from China increased by 11.52%, reaching USD 113.45 billion, compared to USD 101.73 billion the year before.

Because of this, China became India’s second-largest trading partner, with total trade worth USD 127.7 billion, up from USD 118.4 billion in the previous year.

Ajay Srivastava, founder of the think tank GTRI (Global Trade Research Initiative), called the trade gap "staggering". He said:

“Imports surged by 11.5 per cent to USD 113.4 billion, driven by rising demand for electronics, EV batteries, solar cells, and key industrial inputs – sectors where China dominates India's supply chains. China is India's top supplier in all eight major industrial product categories.”

He also pointed out that government schemes like the PLI (Production Linked Incentive) are increasing imports because they depend on imported parts.

Talking about the falling exports to China, Srivastava said:

“What’s more alarming is that India’s exports to China fell 14.5 per cent, dipping to USD 14.2 billion – now lower than they were in FY2014, when the rupee was significantly stronger. This signals more than a trade issue; it’s a competitiveness crisis. These numbers are a wake-up call. India needs to fix its internal manufacturing gaps and invest in deep industrial capabilities. Without that, the deficit will only grow, and so will our dependency.”

The UAE is India’s third-largest trading partner

According to the data, the UAE was India’s third-largest trading partner in 2024-25, with USD 100.5 billion in total trade.

In the past, the UAE used to be India’s top trading partner, followed by China from 2013-14 to 2017-18 and again in 2020-21. But since 2021-22, the US has remained the top trading partner of India.

 

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