India’s Major Trading Partners

11/02/2020 0 By indiafreenotes

According to the Ministry of Commerce and Industry, the fifteen largest trading partners of India represent 59.37% of total trade by India in the financial year 2015-2016. These figures include trade in goods and commodities, but do not include services or foreign direct investment.

The two largest goods traded by India are mineral fuels (refined / unrefined) and gold (finished gold ware / gold metal). In the year 2013-14, mineral fuels (HS code 27) were the largest traded item with 181.383 billion US$ worth imports and 64.685 billion US$ worth re-exports after refining. In the year 2013-14, gold and its finished items (HS code 71) were the second largest traded items with 58.465 billion US$ worth imports and 41.692 billion US$ worth re-exports after value addition. These two goods are constituting 53% total imports, 34% total exports and nearly 100% of total trade deficit (136 billion US$) of India in the financial year 2013-14. The services trade (exports and imports) are not part of commodities trade. The trade surplus in services trade is US$70 billion in the year 2017-18.

Counting the European Union as one, the WTO ranks India fifth for commercial services exports and sixth for commercial services imports.

The two main destinations of exported Indian merchandises is the EU market and the USA, when the two main markets of origin are China and the EU.

Officially named the Republic of India, India is a South Asian nation that shares land borders with China, Nepal and Bhutan to its north-east, Burma and Bangladesh to its east, and Pakistan to its west.

India shipped US$323.1 billion worth of products around the globe in 2018. That dollar figure represents a 1.7% increase since 2014 and a 9.2% gain from 2017 to 2018.

Applying a continental lens, almost half (49.3%) of Indian exports by value were delivered to fellow Asian countries. Another 19.3% was sold to European importers while 18% went to North America.

Smaller percentages went to Africa (8.3%), Latin America (2.9%) excluding Mexico but including the Caribbean, then Oceania (1.3%) led by Australia.

Top 15 Trading Partners of India

Below is a list highlighting 15 of India’s top trading partners in terms of countries that imported the most Indian shipments by dollar value during 2018. Also shown is each import country’s percentage of total Indian exports.

  1. United States: US$51.6 billion (16% of total Indian exports)
  2. United Arab Emirates: $29 billion (9%)
  3. China: $16.4 billion (5.1%)
  4. Hong Kong: $13.2 billion (4.1%)
  5. Singapore: $10.4 billion (3.2%)
  6. United Kingdom: $9.8 billion (3%)
  7. Germany: $9 billion (2.8%)
  8. Bangladesh: $8.8 billion (2.7%)
  9. Netherlands: $8.7 billion (2.7%)
  10. Nepal: $7.3 billion (2.3%)
  11. Belgium: $6.8 billion (2.1%)
  12. Vietnam: $6.7 billion (2.1%)
  13. Malaysia: $6.5 billion (2%)
  14. Italy: $5.5 billion (1.7%)
  15. Saudi Arabia: $5.5 billion (1.7%)

About three-fifths (60.4%) of Indian exports in 2018 were delivered to the above 15 trade partners.

The Netherlands increased its import purchases from India from 2017 to 2018 by the leading 59.3%. In second place was Nepal with a 32.2% gain in value. China boosted its imports from India by 31.3%, trailed by a 21.4% improvement for Bangladesh, a 17.7% uptick for Malaysia and a 12% boost from United States-based importers.

Leading the decliners were importers in Vietnam (down -17.4%), Hong Kong (down -12%) then Singapore (down -9.9%).

Deficits

India incurred an overall -$184.5 billion trade deficit for all products during 2018, expanding 24.5% from its -$148.2 billion in red ink one year earlier.

A country whose total value of all imported goods is higher than its value of all exports is said to have a negative trade balance or deficit.

It would be unrealistic for any exporting nation to expect across-the-board positive trade balances with all its importing partners. That export country doesn’t necessarily post a negative trade balance with each individual partner with which it exchanges exports and imports.

India incurred the highest trade deficits with the following countries:

  1. China: -US$57.3 billion (country-specific trade deficit in 2018)
  2. Saudi Arabia: -$22.9 billion
  3. Iraq: -$21.2 billion
  4. Switzerland: -$16.8 billion
  5. Iran: -$11.9 billion
  6. South Korea: -$11.6 billion
  7. Indonesia: -$11.2 billion
  8. Australia: -$10.4 billion
  9. Qatar: -$8.9 billion
  10. Nigeria: -$8.4 billion

Among India’s trading partners that cause the greatest negative trade balances, Indian deficits with Iraq (up 50.9%), Saudi Arabia (up 44.3%) and Iran (up 40.9%) grew at the fastest pace from 2017 to 2018.

These cashflow deficiencies clearly indicate India’s competitive disadvantages with the above countries, but also represent key opportunities for India to develop country-specific strategies to strengthen its overall position in international trade.

Surpluses

A country whose total value of all imported goods is lower than its value of all exports is said to have a positive trade balance or surplus.

India incurred the highest trade surpluses with the following countries:

  1. United States: US$19 billion (country-specific trade surplus in 2018)
  2. Bangladesh: $7.9 billion
  3. Nepal: $6.9 billion
  4. Netherlands: $5 billion
  5. Sri Lanka: $3.3 billion
  6. Turkey: $3.3 billion
  7. United Kingdom: $2.7 billion
  8. Spain: $2.4 billion
  9. United Arab Emirates: $2.2 billion
  10. Kenya: $2 billion

Among India’s trading partners that generate the greatest positive trade balances, Indian surpluses with the Netherlands (up 60.5%), Nepal (up 35.1%) and Spain (up 26.6%) grew at the fastest pace from 2017 to 2018.

These positive cash flow streams clearly indicate India’s competitive advantages with the above countries, but also represent key opportunities for India to develop country-specific strategies to optimize its overall position in international trade.

Companies Servicing Indian Trading Partners

India placed over 50 corporations on the Forbes Global 2000 rankings. Many of these are major Indian export companies. Below is a selection of some of the biggest Indian corporations.

  1. Reliance Industries (oil, gas)
  2. Tata Motors (cars, trucks)
  3. Indian Oil (oil, gas)
  4. Coal India (diversified metals, mining)
  5. ITC (tobacco)
  6. Bharat Heavy Electricals (electrical equipment)
  7. Hindalco Industries (aluminum)
  8. Tata Steel (iron, steel)
  9. Bharat Petroleum (oil, gas)
  10. Hindustan Petroleum (oil, gas)
  11. Sun Pharma Industries (pharmaceuticals)
  12. Steel Authority of India (iron, steel)
  13. Bajaj Auto (recreational products)
  14. Hero Motocorp (recreational products)
  15. Grasim Industries (construction materials)
  16. JSW Steel (iron, steel)