Opinion
Mint Quick Edit | India’s trade data: Beware myths
Summary
- India’s trade surplus with the US widened in 2024-25 and deficit with China turned into a yawning gap. The trends are clear. But they’re not a win for the White House narrative.
Data for 2024-25 released this week shows a notable shift in India’s trade trends with its big partners.
With the US, India’s merchandise exports jumped 11.6% to $86.5 billion last fiscal year, while imports rose 7.4% to $45.3 billion.
As a result, our bilateral trade surplus widened to $41.2 billion.
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In contrast, our exports to China fell 14.5% to $14.3 billion, even as imports shot up 11.5% to $113.5 billion, widening our trade deficit to $99.2 billion.
Maybe US President Donald Trump could say he told us so. India is outdoing the US on two-way flows and China is outselling almost every country.
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Yet, it’s odd to suggest that these gaps in themselves are unfair. It is myopic to look at bilateral balances in isolation. The world is too complex for that.
India’s surplus with the US is more than offset by our deficit with China. Plus, there are services. On the whole, India runs a current account deficit.
Since this also means capital inflows are tilted our way, no injustice is done.
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While it’s tempting to go the us-versus-them way, the whole world benefits if everyone makes what each is best at and then trades it.
It’s another matter that we need to gain and sharpen an export edge in an effort to out-ship rivals.
