Despite the recent US import tariffs on India’s iron, steel and aluminum products India’s market potential makes it a darling among advanced economies for bilateral trade as bets on its manufacturing and services’ sectors appear to double-down. Bilateral trade between the United States and India grew to USD 140 billion in 2017.
By Kumar S
The promise shown by Indian markets and its large consumer base, which is second to China, has generated keen interest among two of the biggest manufacturing and services’ sectors – the US and China.
Experts claim that the ongoing trade war between the two countries is likely to result in stronger trade relations between India and the US.
According to a join report by global consultancy firm PWC and Indo American Chamber of Commerce (IACC), India continues to go from strength-to-strength in its bilateral trade, claiming that both countries were vying to up trade levels to USD 500 billion from USD 100 billion since 2015.
In 2017, the two-way trade levels between the US and India were estimated around USD 140 billion, which was a substantial jump from USD 118 billion in 2016. The same PWC-IACC report claims that bilateral relations between the two countries have grown stronger in the past two years with increased issuance of visas, visits by dignitaries, initiatives to combat terrorism, as well as trade.
New Delhi climbed four places to 9th spot as the largest trading partner of the US – up from 13 six years ago.
State of Play
India currently enjoys the upper hand as far as export of goods and services are concerned between the two nations. India continues to be a trade surplus nation between the two trading partners and this trend has been consistent since 2011.
According to the United States Trade Representative website, US exports to India were USD 42 billion while the imports were around USD 72.8 billion, bringing in some essential dollars in India. The trade deficit with India was USD 30.8 billion in 2016.
India was the 9th largest goods trading partner of the US with USD 67.7 billion in total (two way) goods trade during 2016. Goods exports reached USD 21.7 billion; goods imports earned USD 46 billion. The U.S. goods trade deficit with India was USD 24.3 billion in 2016.
India exported USD 11 billion worth of precious metal and stone, USD 7.4 billion pharmaceuticals, USD 2.4 billion mineral fuels, USD 2.3 billion worth of miscellaneous textile articles and USD 2.1 billion of machinery during the year.
India is also the 20th largest supplier of agricultural products to the US. The country exported agricultural products valued at USD 2.1 billion to the US in 2016. Leading categories in agricultural products include spices at USD 279 million, rice at USD 158 million), tree nuts at USD 157 million), essential oils for USD 151 million, and processed fruit and vegetables up to USD 114 million.
India’s services’ exports to the US stood approximately at USD 26.8 billion in 2016, up by 8.6% from 2015 and a staggering 280% up from 2006 levels.
India’s services’ exports comprise of telecommunications, computer and information services, travel, and research and development sectors.
Bilateral trade between the two nations grew in 2017 to USD 140 billion...
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