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Despite global economic uncertainties and a decrease in both exports and imports, the United States has emerged as India’s primary trading partner in the first half of the current financial year, as per official government data.

According to preliminary figures from the Ministry of Commerce, bilateral trade between India and the US declined by 11.3% to $59.67 billion from April to September 2023, compared to $67.28 billion during the same period in the previous year. Exports to the US decreased to $38.28 billion from $41.49 billion the previous year, and imports also saw a decline to $21.39 billion during the first six months of the current fiscal, down from $25.79 billion in the same period the previous year.

Similarly, trade between India and China also experienced a 3.56% decrease, with exports to China marginally dropping to $7.74 billion in the first half of the current fiscal year, down from $7.84 billion the previous year, and imports falling to $50.47 billion from $52.42 billion in the previous year.

Trade experts anticipate that despite the current downturn in exports and imports with the US, growth rates will soon turn positive. The upward trajectory of bilateral trade with the US is expected to continue in the coming years, as New Delhi and Washington work to further strengthen their economic ties. Sanjay Budhia, Chairman of the CII National Committee on EXIM, has emphasized the importance of an early resolution to restore GSP benefits by the US to Indian exporters, as it would significantly boost bilateral trade.

Mumbai-based exporter Khalid Khan and Ludhiana-based exporter SC Ralhan both believe that the US will remain India’s primary trading partner, notwithstanding global challenges. Ralhan stressed the importance of the US considering the restoration of Generalized System of Preferences (GSP) benefits to domestic exporters, as it would greatly facilitate trade. It’s worth noting that the US is one of the few countries with which India maintains a trade surplus.

In the previous fiscal year (2022-23), the United States held the position of India’s largest trading partner, with bilateral trade between the two countries increasing by 7.65% to $128.55 billion, up from $119.5 billion in the previous fiscal year (2021-22) and $80.51 billion in 2020-21.

Previously, China held the position of India’s top trading partner from 2013-14 to 2017-18 and also in 2020-21. Before China, the United Arab Emirates (UAE) was India’s largest trading partner.

In 2022-23, the UAE, with $76.16 billion in bilateral trade, ranked as India’s third-largest trading partner, followed by Saudi Arabia with $52.72 billion and Singapore with $35.55 billion. During the first half, bilateral trade with the UAE amounted to $36.16 billion.

Additionally, the government recently extended restrictions on sugar exports beyond October 31 of this year, aiming to boost the availability of sugar in the domestic market during the festive season. However, these restrictions do not apply to sugar exported to the European Union and the US under the CXL and TRQ duty concession quotas.

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