China Surpasses USA and Becomes Largest Trading Partner of India in FY24 - Volza

REHOBOTH BEACH, Del., June 5, 2024 /PRNewswire/ -- Volza -- In a significant shift in global trade dynamics, China has surpassed the USA to become India's largest trading partner in the fiscal year 2024 (FY24). This development underscores the evolving nature of international trade relationships and highlights the increasing economic interdependence between China and India. As businesses and policymakers navigate these changes, tools like Volza can play a pivotal role in understanding and optimizing trade strategies.

The Shift in Trade Dynamics

For several years, the USA held the position as India's largest trading partner, with significant bilateral trade in goods and services. However, recent data from India's Ministry of Commerce reveals that China has overtaken the USA, marking a pivotal change in India's trade landscape.

Key Segment Driving the Change

Several factors have contributed to China surpassing the USA as India's top trading partner:

1. Increased Import of Electronic Goods: China's dominance in manufacturing and exporting electronic goods has led to a surge in imports from China to India. Products such as smartphones, laptops, and other consumer electronics have seen significant demand in the Indian market.
2. Industrial Machinery and Equipment: The robust growth in India's manufacturing sector has increased the demand for industrial machinery and equipment, much of which is sourced from China. This includes machinery for sectors such as textiles, chemicals, and automotive manufacturing.
3. Chemical and Pharmaceutical Imports: China remains a key supplier of bulk drugs and intermediates to India's pharmaceutical industry. The increasing import of these chemicals has further bolstered trade between the two countries.
4. Infrastructure Projects: Several ongoing infrastructure projects in India have sourced materials and machinery from China. These projects, aimed at enhancing India's infrastructure, have contributed to the rise in imports from China.

Key Factors Driving the Change

1. Increased Bilateral Trade Volume: The trade volume between India and China has been increasing significantly. In FY24, the total trade between the two countries surged due to higher imports from China, including essential commodities and intermediate goods used in Indian manufacturing.
2. Competitive Pricing: Chinese products are often more competitively priced compared to those from other countries, making them attractive to Indian importers. This cost advantage has bolstered imports from China.
3. Supply Chain Dynamics: The disruptions caused by global events such as the COVID-19 pandemic and the Ukraine conflict have led to changes in supply chain dynamics. China's robust manufacturing and supply chain capabilities have allowed it to meet India's demands more efficiently than other countries.
4. Trade Agreements and Economic Policies: Both countries have engaged in trade agreements and economic policies that have facilitated smoother trade flows. India's tariff structures and trade policies have also influenced the increase in imports from China.
5. Increased Demand for Consumer Electronics: There has been a surge in demand for consumer electronics in India, many of which are imported from China. This sector's growth has significantly contributed to the overall trade volume between the two countries.
6. Raw Material Imports for Indian Manufacturing: Indian industries, particularly those in sectors like pharmaceuticals and automotive, rely heavily on raw materials and components from China. This dependence has driven up import numbers, contributing to the higher trade volume.
7. Shift in Global Trade Patterns: Changes in global trade patterns, including the impact of the US-China trade war, have redirected some of China's export focus towards other markets, including India.

Trade Figures at a Glance

According to the latest trade data, the bilateral trade between India and China reached a record high in FY24. The total trade value stood at approximately $118.4 billion, with imports from China accounting for the majority of this figure. In contrast, trade with the USA, while still substantial, lagged behind at around $118.3 billion.

Data is from Economics Times Ref Link: https://economictimes.indiatimes.com/news/economy/foreign-trade/china-overtakes-us-to-become-indias-top-trading-partner-in-fy-2023-24/articleshow/110049223.cms?from=mdr

Leveraging Volza for Informed Trade Strategies

Amidst these shifting trade dynamics, businesses can benefit from leveraging tools like Volza to gain deeper insights and make informed decisions. Here's how Volza's features can contribute:

1. Global Shipment Records Access: Volza provides users with access to comprehensive shipment records, allowing businesses to track product movements and understand global trade patterns. This data can help businesses identify emerging trends and make strategic decisions about trade partnerships.
2. Competitor Analysis: By analyzing competitor shipment activities through Volza, businesses can gain a competitive edge. Understanding competitor strategies and market positions can inform pricing strategies, product offerings, and market entry decisions.
3. Market Exploration: Volza's market exploration features enable businesses to identify new markets and opportunities. With insights into demand trends and market dynamics, businesses can tailor their export strategies to target high-growth markets effectively.
4. Real-Time Updates: Stay up-to-date with the latest trade data and trends through Volza's real-time updates. Timely information allows businesses to adapt quickly to changing market conditions and capitalize on emerging opportunities.

Implications for India and Strategic Considerations

The rise of China as India's largest trading partner in FY24 has several implications for the Indian economy. While this shift brings opportunities for economic collaboration, it also underscores the need for strategic trade policies and partnerships. India can leverage tools like Volza to:

• Optimize Supply Chains: Track shipments, verify transaction details, and optimize supply chain efficiencies.
• Identify New Market Opportunities: Explore emerging markets and identify high-demand products using Volza's data insights.
• Monitor Competitor Activities: Analyze competitor strategies and market positions to inform competitive strategies.

As India continues to navigate the evolving trade landscape, partnerships with platforms like Volza can provide the data-driven insights necessary to thrive in a rapidly changing global economy.

About Volza

Volza started in 2017 to help companies that trade goods internationally. They use advanced tools and data to show businesses new opportunities and potential problems. This helps import-export companies succeed in the competitive market. Volza provides detailed global trade information so businesses can make smart decisions. Learn more at Volza.

CONTACT: Arti Jain, [email protected], (302) 918-4610