India’s trade landscape is undergoing a notable geographical realignment, with trade surpluses increasingly shifting towards Asia and Africa even as gains with traditional partners such as the United States and the Netherlands moderate.
Latest trade data for the first two months of FY27 show that India’s surplus with the US narrowed to $6.15 billion from $7.87 billion a year earlier. The decline came as imports from the US surged nearly 55 per cent year-on-year to a record $5.87 billion in May, while Indian exports remained largely flat.
In contrast, several Asian and African markets delivered strong export growth, helping India reverse earlier trade deficits. Trade with Singapore swung to a surplus of $665 million in April-May from a deficit of $1.3 billion in the corresponding period last year, driven by a sharp rise in exports. South Africa also recorded a turnaround, with India’s trade balance improving to a surplus of $492 million from a deficit of $17 million a year ago.
Among neighbouring and African nations, Tanzania and Sri Lanka emerged as standout performers. India’s trade surplus with Tanzania expanded dramatically to $1.71 billion from just $77 million last year, supported by a 172 per cent jump in exports. Exports to Sri Lanka nearly tripled during the period, pushing India’s trade surplus with the island nation above $1 billion compared with $404 million a year earlier.
The trend, however, was not uniform across all regions. India’s trade deficit with the United Arab Emirates narrowed to $4.53 billion from $6.18 billion as trade flows continued to recover from disruptions caused by the West Asia conflict. Meanwhile, the trade gap with China widened significantly, crossing the $20 billion mark during April-May.
In Europe, demand remained mixed. While India’s trade surplus with the Netherlands contracted, exports to Italy and Spain rose by more than 40 per cent, strengthening the country’s trade position across southern Europe.
The data indicate a growing diversification of India’s export markets, with stronger demand from emerging economies in Asia and Africa increasingly offsetting slower growth in some traditional trading partners.
