INDIA- USA TRADE AGREEMENT

• Recently, the Ministry of Commerce and Industry has released the data, which showed that the US has surpassed China becoming India’s top trading partner in 2021-22.
• Major export items from India to the US include petroleum, polished diamonds, pharmaceutical products, jewellery, frozen shrimp, whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds and so on.
• The data showed that China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21.
• Before China, the UAE was the country’s largest trading partner.

Key Points

• Bilateral trade between the US and India stood at USD 119.42 billion (2021-2022) as against USD 80.51 billion in 2020-21.
• Exports to the US increased to USD 76.11 billion in 2021-22 from USD 51.62 billion in the previous fiscal year, while imports rose to USD 43.31 billion as compared to about USD 29 billion in 2020-21.
• America is one of the few countries with which India has a trade surplus.
• In 2021-22, India had a trade surplus of USD 32.8 billion with the US.
• During 2021-22, India’s two-way commerce with China aggregated at USD 115.42 billion as compared to USD 86.4 billion in 2020-21.
• Exports to China marginally increased to USD 21.25 billion last FY 2021-22 from USD 21.18 billion in 2020-21.
• On the other hand, imports from China jumped to USD 94.16 billion from about USD 65.21 billion in 2020-21.
• The trade gap (Import – Export) rose to USD 72.91 billion in 2021-22 from USD 44 billion in the previous fiscal year.

US Largest Trading Partner of India

• India is emerging as a trusted trading partner and global firms are reducing their dependence on China for their supplies and are diversifying business into other countries like India.
• India has joined a US-led initiative to set up an Indo-Pacific Economic Framework (IPEF) and this move would help boost economic ties further.
• The US has consistently been India’s largest market for services exports, but the recent overseas sales of merchandise goods to that country overtook China, making it the largest bilateral trading nation of India.
• India’s total merchandise exports touched a record USD 418 billion in 2021-22, exceeding the Center’s target by about 5% and clocking a 40% growth over the previous year.

Way Forward

• The unparalleled Demographic Dividendprovides enormous opportunities for the US and Indian firms for technology transfer, manufacturing, trade and investment.
• India is emerging as a leading player in an international system that is undergoing an unprecedented transformation. It shall use its present situation to explore opportunities to further its vital interests.

SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT