India’s Exports to US and Imports from China Hit Record High in 2024-25

Fears of retaliatory tariffs that will come into effect on April 2 have prompted a rush of shipments in March, driving overall exports to the United States to a record $86.51 billion for the 2024-25 financial year.

Provisional foreign trade data of the Commerce Ministry show that Indian imports from China also reached an all-time high of $113.45 billion during the previous year. Indian exports to America also made a huge jump with exports crossing over $10 billion in March itself, an increase of 35% over the corresponding month the previous year. Overall exports did not change much.

Meanwhile, March registered a 25% increase in imports from China, much higher than the overall 11.52% increase in imports for FY25. The total trade deficit was $94.26 billion, with imports growing by 7%, hitting a record high of $915.19 billion during the previous financial year.

Trade statistics showed that overall goods exports were stagnant at $437.42 billion in FY25, a slight increase from $437.07 billion in FY24. Services exports, on the other hand, grew by 12.45% to $383.51 billion, from $341.06 billion in the last fiscal year. India had a high surplus of trade in services with imports in this category reaching $195.95 billion.

Ajay Srivastava, former trade officer and director of the Global Trade Research Initiative (GTRI), noted that India's trade deficit with China amounted to $99.2 billion in FY25, showing deeper structural dependencies rather than simply trade imbalances. "China is India's top supplier across all eight key industrial categories. The PLI schemes have spurred import growth as a result of overdependence on imported components.". More concerning, though, is India's 14.5% decline in exports to China, which now totals $14.2 billion — a lower figure than when the rupee was stronger during FY14. This shows a competitiveness crisis, as opposed to being a trade problem," he said.

Due to drought and excessive heat in Brazil, one of the major coffee-exporting countries, India saw its coffee exports skyrocket by a whopping 40%. India exported coffee worth $1.8 billion in FY25, a record high, as international robusta coffee prices skyrocketed. Likewise, India's electronics exports also jumped by 32% to $38 billion on the back of the spurt in iPhone exports. India's market share in the US and UK markets increased by 13.73% and 14.31%, respectively, during 2024, said the Ministry of Commerce.

Pharmaceutical exports, fruits and vegetables, cereal preparations, and processed products registered gains of 5 to 10%. Exports of gems and jewelry, handicrafts, and organic and inorganic chemicals suffered declines between 2 to 10%.

Significantly, exports of engineering goods increased by 6.74% on a year-on-year basis during FY25, though the industry encountered problems in March. Exports of engineering products declined by almost 4% to $10.82 billion, as against $11.27 billion in March 2024. Pankaj Chadha, Chairman of the Engineering Export Promotion Council, cautioned that the higher US duties on steel and auto parts may lead to a $4-5 billion fall in engineering exports to the US every year. “We’re also likely to face heightened competition from China in other markets as they intensify their push for market share in regions like Latin America, Central America, the Middle East, and Africa,” Chadha noted, adding that this could erode profit margins and limit funds available for reinvestment.

The World Trade Organization (WTO) has recently predicted a 0.2% drop in the volume of world merchandise trade in 2025, a stark reverse of the outcome that would have been predicted in a "low tariff" world. The WTO also suggested that the world services trade, although not directly affected by tariffs, will also face weaker growth, with the predicted growth rate of commercial services trade reduced to 4%.

WTO Director-General Ngozi Okonjo-Iweala stated that although the recent easing of tariff tensions helped to alleviate some relief for world trade, the uncertainty is more likely to dampen global economic growth, with especially bad effects on vulnerable economies.