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

China Reclaims Top Spot as India’s Largest Trading Partner (August 2025)

• According to trade data, China overtook the U.S. as India’s largest trading partner in August 2025, following steep declines in India–U.S. trade due to reciprocal and penalty tariffs.

India–U.S. Trade (August 2025)

• Exports to U.S.: fell 16.3% to $6.7 bn (from $8 bn in July).
• Imports from U.S.: contracted 20.8% to $3.6 bn (from $4.5 bn in July); 18% lower y-o-y.
• Total trade with U.S.: $10.4 bn in August.
• Tariffs: U.S. raised duties from 10% in April → 25% on Aug 7 → 50% on Aug 27.
• Impact: India’s exports to U.S. projected to shrink by $30–35 bn in FY 2026 if 50% tariffs persist (GTRI estimate).

India–China Trade (August 2025)

• Imports from China: up 0.67% y-o-y to $10.9 bn.
• Exports to China: surged 22.38% to $1.21 bn.
• Total trade: $12.1 bn (vs $10.4 bn with U.S.).
• Result: China reclaimed position as India’s largest trading partner for the month.

Trend & Historical Context

• China was India’s top partner during FY14–FY18 and FY21.
• U.S. dominated from FY22 to FY25.
• In FY24, China’s bilateral trade was marginally higher than U.S., while UAE held the third spot.
• With current tariff regime, China is likely to retain top slot for FY26.

Significance

• Reflects vulnerability of India–U.S. trade to tariff shocks.
• Highlights growing reliance on Chinese imports, posing strategic and economic challenges.
• UAE continues as the third-largest partner.
  
  Updated - 18 September 2025 2:36 AM | Down to Earth