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    As US Exports and Imports Fall in August, China Becomes India’s Largest Trade Partner

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    By Sangeetha G

    Copyright deccanchronicle

    As US Exports and Imports Fall in August, China Becomes India’s Largest Trade Partner

    Chennai: As the reciprocal tariffs and penalty tariffs came into effect in August, US exports dipped 16.3 per cent sequentially. However, US imports fell more sharply in August by 20 per cent against July. With this, the US has once again been replaced by China as India’s largest trade partner.August shipments to the US plunged to $6.7 billion, down 16.3 per cent from $8 billion in July. US tariffs had jumped from 10 per cent in April to 25 per cent on Aug 7 and 50 per cent on Aug 27, first due to reciprocal tariffs and then the penalty tariffs. India’s exports have been coming down since May. From $8.8 billion in May, it slid to $8.3 billion in June and then to $8 billion in July, though the front-loading of goods ahead of the reciprocal tariffs has been pushing trade across the globe. However, once the tariffs came into effect, exports fell by 16.3 per cent in August. Interestingly, imports from the US fell steeper. In August, imports from the US were down by 20.8 per cent to $3.6 billion from $4.5 billion in July. The imports were lower by 18 per cent in August against the same month last year. This saw the total merchandise trade with the US coming down to $10.4 billion in August. On the other hand, China increased its imports to India by 0.67 per cent to $10.9 billion on a y-o-y basis. Exports went up by 22.38 per cent to $1.21 billion. This saw the total trade going up to $12.1 billion. With this, China emerged the largest trade partner of India in August. According to GTRI estimates, if the 50 per cent tariffs remain through the end of FY 2026, India could lose $30–35 billion in US exports. This will further shrink US trade in the coming months. For the entire fiscal, China is likely to remain in the top slot. China was India’s top trading partner from FY14 to FY18 and in FY21. In FY24, China’s bilateral trade with India was marginally higher than that with the US. However, in FY22, FY23 and FY25, the US has been India’s largest trading partner. Prior to FY14, UAE was India’s largest trading partner and now it remains in the third spot.

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