A Showcase of India’s Top 10 Trade Partners

Expert Speak

06 July 2022 • 28 min read

A Showcase of India’s Top 10 Trade Partners

Editorial Team

In the wake of the US surmounting China as India’s top trade partner in 2021 - 22, it is pertinent to take a look at South Asia’s biggest economy’s top 10 trade partners. Interestingly, barring the top trade partner, the US, India has a trade deficit with the rest of the nine partners, amounting to a colossal $154.7 billion. Only the top two partners, the US and China have bilateral trade above $100 billion whereas the bottom three, Indonesia, South Korea and Australia roughly have the same quantum of around $25 billion. Read on to know more about how crucial is the Gulf geography for India’s economy et al.

Only the top two partners, the US and China have bilateral trade above $100 billion whereas the bottom three, Indonesia, South Korea and Australia roughly have the same quantum of around $25 billion. Here's a breakdown about how crucial the geography of the Gulf is for the Indian economy.

Indian economy has come a long way in the past three decades, weathering the storms of the balance of payments (BOP) crisis in 1991 when it only had around $5 billion of forex reserves to implementing the structural reforms of Liberalization, Privatization and Globalization (LPG) to permanently change the course of the country for good.

Unlike the first four decades of paltry economic growth since independence from the colonial clutches, India thrived in the next three to find a place in the Brazil, Russia, India and China (BRICs) economic grouping, coined and conceptualized by Goldman Sachs economist Jim O’ Neal in 2001.

From just two-week strong import cover in 1991, India forex reserves, which shot past the $600 billion mark and continue to fluctuate, are fortified enough to cover an entire year’s imports now.

Gradually, India has emerged as a powerhouse in services trade and Information Technology (IT) among others, including merchandise exports of petroleum products, iron and steel, precious stones, engineering goods and others to comfortably cross the annual merchandise exports target of $400 billion set for 2021 - 22.

Continuing this winning trade streak, India has clocked merchandise exports of $40 billion and services exports of $28 billion, and overall exports of $68 billion in April 2022. Despite the services trade surplus in April, India continues to suffer an overall trade deficit ($8 billion), considering higher merchandise imports ($60 in April) which negate the services gains.

Meanwhile, to further bolster trade, India has forged key trade agreements with economic heavyweights such as the United Arab Emirates (UAE), Australia and is in talks with the United Kingdom (UK) and others.

The recent Comprehensive Economic Partnership Agreement (CEPA) inked with the UAE is expected to power 90 percent of India’s exports under duty free category to the Emirates, which will also serve as a re-export destination to African markets for Indian merchandise. Similarly, India and the UK are busy negotiating a bilateral Free Trade Agreement (FTA) to clinch it by the forthcoming Diwali.

In this success story, trade with many countries is a key component of the South Asian giant’s rise as an economic power to reckon with. In the light of this scenario and recently the United States of America (USA) surmounting China as India’s top trade partner, let’s take a look at India’s top 10 trade partners at the end of 2021 - 22. Interestingly, India had ancient trade links with most of these countries, spanning the silk route to seaborne routes.

India’s top 10 trade partners:

  1. USA
  2. China
  3. UAE
  4. Saudi Arabia
  5. Iraq
  6. Singapore
  7. Hong Kong
  8. Indonesia
  9. Korea
  10. Australia


At the end of fiscal 2021 – 22, the United States surpassed China to emerge as India’s top trade partner, with total trade between the two countries valued at $119.42 billion.

India’s trade with the US accounts for 11.5 percent of its entire trade with the world and within the top 10 countries, it stands at 22.8 percent.

Starkly, the US is the only trade partner in the top 10 club with which India enjoys a trade surplus, $32.7 billion. India’s exports to the world’s largest economy stood at $76.1 billion and imports at $43.3 billion.

Over the years, both the US and India are deepening ties across various realms, matching synergies for trade to thrive.

Recently, India joined with the US to establish the Indo-Pacific Economic Framework for Prosperity (IPEF), whose key pillars of ‘Connected Economy’, ‘Resilient Economy’, ‘Clean Economy’ and ‘Fair Economy’ align well with India’s ambitious $5 trillion economy goal, which will lead to profound trade exchanges through numerous industries and services.


India – China trade touched $115.42 billion in 2021 – 22. India’s exports to China were $21.2 billion while imports stood at a massive $94.1 billion, resulting in a huge trade deficit of $72.9 billion.

Prior to the US unseating China as India’s top trade partner, India’s northern neighbour topped trade with India for half a dozen years, from 2013 – 14 to 2017 – 18 and again in 2020 – 21.

Imports from China continue to surge, driven by demand for electronic products, chemicals, auto components and others. Especially under electronics, Chinese phone brands such as Xiaomi, Oppo, Vivo and others are wildly popular in India, relegating a few Indian brands like Karbon and Micromax which tried to make inroads about a decade ago.

Unlike with the US, India did not cozy up to China in terms of trade pacts by staying out of the Regional Comprehensive Economic Partnership (RCEP).

Though India imports Active Pharmaceutical Ingredients (API) from China, its pharmaceutical industry still does not have access to the Chinese market, which the former is insisting for long. India is a major generic pharmaceuticals exporter.


The trade partnership between the UAE, a member of the Gulf Cooperation Council (GCC) plus the Organization of Petroleum Exporting Countries (OPEC), and India is of immense importance. Akin to the US and China, UAE was India’s top trade partner at one time. Maritime trade and exchange of goods, services and culture between the people in the Gulf region and India’s western and southern states even predate the advent of Islam.

Besides these deep links, the Gulf region had also bridged trade connections between India and Greece, Rome and other European powers, enabling transactions in indigo, silk, cloth, gold and silver and spices.

At one time under the colonial regime, a loose common monetary system facilitated the acceptance of rupee as a legal tender in many Gulf countries until the first half of the 20th century.

In 2021 – 22, total trade between India and the UAE amounted to $72.8 billion, with exports of $28 billion and imports of $44.8 billion. The South Asian giant suffered a trade deficit of $16.7 billion.

Following the discovery and commercial exploitation of oil in the Gulf, myriad changes started occurring between the countries in this region and India.

UAE is one of the top 10 crude oil suppliers to India. Between 2017 and 2021, along with fellow GCC members Saudi Arabia, Bahrain, Oman, Kuwait and Qatar, and Iran, UAE accounted for 15.3 percent of India’s cumulative two-way merchandise trade worth $3.98 trillion. Of this colossal amount, UAE alone contributed $277.4 billion.

The UAE, comprising the emirates of Dubai, Abu Dhabi, Sharjah Ajman, Umm Al-Quwain, Fujairah and Ras Al Khaimah, is a major market for Indian commodities such as basmati rice, tea, electrical equipment, apparel and machinery among others.

One of the key goals of the newly minted CEPA is to catapult bilateral trade between the UAE and India over $100 billion in the next five years, including raising services trade beyond $15 billion.

CEPA will offer preferential market access in the UAE to 99 percent of Indian exports, especially to labour intensive sectors like gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices and automobiles.

After securing CEPA with the UAE, the Indian government is now focused on exploring a free trade agreement (FTA) with the GCC in entirety.

Besides trade, the UAE is a major employment destination for Indians. Of the nearly 90 lakh Indians living in West Asia, Emirates is home for 34 lakh of them, who work there in the finance industry, hospitality, medical sector, oil industry, construction and others.

Saudi Arabia

The home of Mecca and Medina, Saudi Arabia, has emerged as India’s fourth largest trade partner in 2021 – 22, accounting for a bilateral trade of $42.8 billion, which included exports worth $8.7 billion and imports valued at $34.1 billion.

Compared to the UAE, India has a bigger trade deficit with Saudi Arabia at $25.3 billion. Crucially, Saudi Arabia is the second largest, 18 percent, oil supplier to India.

Similar to the UAE, Saudi Arabia hosts a large contingent of Indian expatriates, 26 lakh, who live and work in the oil-rich Arabian country, which is also a key member of the GCC and the OPEC.

Out of $609 billion of merchandise exports and imports between India and GCC and Iran in the five-year period between 2017 and 2021, Saudi Arabia accounted for $153 billion, second highest, indicating the importance of non-oil trade with these countries.

Further, a large number of Indian refineries are programmed to process the sulphur-heavy sour crude grades originating from the Gulf geography, considering the low sulphur sweet crude grades of oil being more expensive.

According to the Ministry of Petroleum and Natural Gas’s Petroleum Planning and Analysis Cell (PPAC), Indian crude purchases in the past 20 years gravitated more towards the Oman and Dubai sour grades.

By the end of FY 2001, the ratio of sour grades to sweet grades in India's crude oil basket was 57:43, which transformed to 75.62:24.38 by March 2022.

The Gulf region countries are a major source of jobs, economic opportunities and entrepreneurship for India, including contributing $40 billion worth of remittances, accounting for 55 percent of total remittances.


Oil-rich Iraq is the fifth largest trader with India in 2021 – 22 and also the third nation from West Asia to find a place within the top five traders.

Iraq, also known as Mesopotamia in ancient times accounted for a total trade of $34.3 billion with India. Indian exports accounted for a mere $2.4 billion while Iraqi imports were valued at $31.9 billion dollar, resulting in the largest trade deficit, $29.5 billion, for India among the UAE, Saudi Arabia and Iraq.

In 2020 – 21, Iraq was India’s largest oil supplier and has historically been a consistent supplier for many years. It emerged as India’s top oil supplier in 2017 – 18 and supplied 51.56 MMT of crude oil in FY 2019 – 20 and 43.02 MMT in FY 2020 – 21.

According to an Observer Research Foundation (ORF) study, over the last 15 years, Gulf countries fulfilled as much as 60 percent of India’s oil needs.  

Besides crude, India also imports raw wool and sulphur from Iraq while exporting cereals, iron and steel, meat and meat products, pharmaceuticals, agro chemicals, cosmetics, rubber, manufactured products, paints, gems and jewellery, ceramics, metals, machine tools, electrical machinery and instruments, transport equipment, electronic goods, handicrafts, sugar, tea and garments.

Currently, about 17,000 Indians work in the West Asian nation, predominantly in Kurdistan, Basra, Najaf and Karbala while up to 40,000 Indians go on pilgrimage to Baghdad, Karbala, Najaf and Samarra in a year.


India’s next large trade partners after West Asia come from Southeast Asia, topped by the city state Singapore, which logged a total trade of $30.1 billion in 2021 – 22. India’s exports to Singapore were $11.1 billion while imports stood at $18.9 billion, leading to a trade deficit of $7.8 billion.

Economic and commercial ties between the two Asian countries significantly rose in recent years, following the Comprehensive Economic Cooperation Agreement (CECA) in 2005, including the FTA in goods trade between India and the Association of Southeast Asian Nations (ASEAN).

Likewise, several Indians companies make use of Singapore to raise funds for their global operations whereas the city state, lying by the globally important maritime trade route of the Strait of Malacca is an attractive destination for Indian public sector enterprises to shed stake with pre-market discussions and IPO/FPO roadshows.

Between April 2000 and December 2015, Singapore was India’s second largest Foreign Direct Investment (FDI) source with investments of $43.2 billion. Similarly, Indian corporate presence in Singapore has risen significantly, around 6,000 Indian companies registered in the city state.

Hong Kong

Semi-autonomous Chinese metropolis Hong Kong emerged as India’s seventh largest trade partner in 2021 – 22, encompassing a total trade of $30 billion, including Indian exports of $10.9 billion and imports of $19 billion, ending up with an Indian trade deficit of $8.1 billion.

India has historical links with Hong Kong, running as far back as the 1840s when the city was a British colony, with ties ranging in sectors such as investment finance, services, maritime, shipping, logistics, culture, education and trade.

Famous Hong Kong companies present in India include Li & Fung, Jardines, Shangri La, Kerry Logistics and Johnson electronics among others while the city comes in handy as a re-exporter of Indian imports to mainland China.

Between April 2000 and September 2016, FDI inflows from Hong Kong to India were valued at nearly $2 billion.

As a major trade hub by the South China Sea, Hong Kong hosts a large number of Indian professionals working in banking, IT, shipping and other industries.

Major Indian exports to Hong Kong are pearls, precious and semi-precious stones, leather, electrical machinery, fish and crustaceans, machinery, apparel, organic chemicals, optical and medical instruments and plastics.

India’s imports include electronics, telecom equipment, computer hardware, pearls and others.


Southeast Asia’s largest economy, world’s fourth most populous country and archipelago nation of more than 300 ethnic tribes, Indonesia is India’s eighth largest trade partner, which clocked a total trade of $26.1 billion in 2021 – 22, with Indian exports valued at $8.4 billion and imports $17.7 billion, leaving a trade deficit of $9.2 billion.

In 2019, on the sidelines of the G20 summit in Japan, India and Indonesia set an ambitious target of $50 billion bilateral trade by 2025, including deepening cooperation in trade and investment, defence and maritime sectors.

The archipelago is a major market for Indian spices exports which encompass cloves, pepper, cassia, ginger, turmeric, cardamom and spice oils, which are also used as value added items by Indonesia for re-exports.

Semi-finished iron products, sugar cane, peanuts, frozen beef and iron alloys are some other Indian exports to the Southeast Asian nation.

Meanwhile, India’s imports from Indonesia include coal, palm oil, iron alloys, industrial monocarboxylic fatty acids and copper ore among others.

South Korea

East Asian innovation powerhouse South Korea has emerged as India’s ninth largest trade partner in 2021 – 22, clocking a total bilateral trade of $25.5 billion, which included $8 billion worth of Indian exports and $17.4 billion dollars of imports, resulting in a trade deficit of $9.3 billion for India.

Bilateral trade between the two countries crossed the $20 billion milestone for the first time in 2018, following the Comprehensive Economic Cooperation Agreement (CEPA) being implemented from 2010.

South Korean investments in India crossed the $1 billion mark for the first time in 2018 while the East Asian country’s investments in India up to September 2020 stood at nearly $7 billion.

Likewise, reciprocal Indian investments are estimated up to $3 billion, spearheaded by Tata Daewoo, Novelis and Ssangyong. Both the countries are also working towards strengthening cooperation in the fields of electronics, energy, shipbuilding and others.

Akin to Indonesia, India and export driven South Korea have also set a target of $50 billion bilateral trade to be achieved by 2030, even as they explore commercial opportunities in nuclear energy, defence and space as well.

Renowned for its mega shipbuilding industry, South Korea industrial excellence also extends to semiconductors, steel, nuclear energy, heavy electrical machinery, electronics and automobiles, especially Samsung electronics and Hyundai automobiles in India and the wider world as well.

Hyundai Motor India Ltd (HMIL) is the Indian subsidiary of Korean parent Hyundai, which went on to perch itself as the second largest passenger car seller in India behind Maruti Suzuki in less than 30 years. Hyundai’s subsidiary Kia is also popular in the South Asian country while Samsung cell phones are exceedingly popular, clocking massive sales across India.

Beyond catering to the Indian market, Korea is keen on taking advantage of India’s strengths in IT with an aim to integrate them with its IT hardware, design, engineering and manufacturing.

Over the years, as South Korea transformed from a poor country into an industrial heavyweight, its exports to India transformed from being primary goods to light industrial products, heavy industrial, high tech and knowledge-based.

Major Indian exports to Korea encompass mineral fuels, oil distillates (especially naphtha), cereals, iron and steel while imports include automobile parts, telecommunication equipment, hot rolled iron products, refined petroleum products, base lubricating oils, nuclear reactors, mechanical appliances, electrical machinery and parts and iron and steel products.


Australia, Oceania’s largest country, has secured the position of being India’s 10th largest trade partner, accounting for a bilateral trade of $25 billion in 2021 – 22, leading up to a trade deficit of $8.4 billion for India. Exports to Australia were valued at $8.2 billion and imports $16.7 billion.

Following protracted rounds of negotiations stretching up to a decade, India and Australia have recently signed the Economic Cooperation and Trade Agreement (ECTA), especially at a time when the latter is yearning to wean away trade-wise from China.

ECTA is expected to boost trade from current $25 billion between the partners to up to $50 billion in the next five years, creating as many as 10 lakh additional jobs, including offering uninterrupted supply of raw materials to industries in India.

As China and Australia spar over various issues, the latter is looking for reliable suppliers outside China, standing India in good stead.

According to Piyush Goyal, India’s Commerce Minister, the trade deal offers immense opportunities for MSMEs and lucrative opportunities to export automobiles, textiles, footwear, leather products, gems and jewellery, plastics and toys.

ECTA will obviate tariffs on nearly 85 percent of Australian goods imports such as wool, coal and sheep meat and accord zero-duty access for wines, almonds, lentils and some fruits over five years from down under and several other trade synergies.

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