Economic Survey for 2007-2008 revealed that India’s largest trading partner is China and not USA anymore. It said that China’s trade share during April - October 2007 is even higher than that of the United States by Rs.600 crore, a massive difference. Around 6 years ago, the volume of trade between India and China was barely one-fourth of the trade between USA and India. Infact United Kingdom, Belgium, Germaney, UAE and Switzerland were all larger trading partners than China at that stage, date presented in the survey showed. In these six years, China has beaten all of them and now in october, US too. Even UAE has moved up from being the fifth largest trading partner to third largest over this period while Saudi Arabia is now at fourth position, due to oil prices playing its important role in emergence as a large partner of India.

India exports to China are only 30% of its imports. Concerned about the growing deficit with Chin, the survey said that India’s export policy with china needs to be carefully planned. It pointed out that India’s exports to China were crucially dependent on a single item - Iron Ore which accounted for 44% and the other major item was non ferrous metals with a 5% share. Demands for these items are going to fall after the Beijing Olympics this year and hence India will have to diversify exports to China if the widening trade deficit is to be contained, it cautioned.

The data also shows that the top 12 trading partners of India account for the a significantly larger share of our trade with the rest of the world than was the case six years ago. Between them they accounted for 42.6% of India’s global trade in 2001-02 but now it has risen to almost 55%.

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