India-US trade potential pegged at US$ 500-600 billion
CIM Piyush Goyal has expressed confidence that India-US trade in goods and services could reach a potential size of US$ 500-600 billion trade by 2030. As India’s largest trade partner, the US holds tremendous potential for growth, even as both sides look to catalyse bilateral relations in critical areas via the IPEF initiative.
Commerce and Industry Minister Piyush Goyal exuded confidence that India– US bilateral trade in goods and services will reach US$ 500-600 billion by 2030 as their bilateral relation continues to strengthen. While speaking at the Hindustan Times Leadership Summit 2022, the minister said that US is looking at India as its friend and a trusted partner.
India emerging as powerhouse economy, is expected to grow at 7% in 2022, according to Moody’s recent forecast. Its trade with the world has always played a key role in making it a South Asian giant. In the backdrop of multilateralism as a core strategy, India and the US have always remained each other’s trusted partners and their relations have been continuously improving over time.
With a common vision of enhancing resilience, sustainability, inclusiveness and economic growth in the Indo-Pacific region, both economies are trying to set up a comprehensive framework of economic partnerships. The US-led , a non-FTA initiative IPEF, launched in May 2021, will be working on 4 main pillars. India being a member, along with 13 other countries of Pacific Ocean has decided to support the three pillars, which are supply chain resilience, clean energy, decarbonisation and infrastructure and taxation and anticorruption. The final call on the agreements will be taken after conducting a comprehensive consultation with all the stakeholders said the minister. Relations between two countries will always remain vital to shape the world order in 21st century.
India being the 18th largest exporter in the world, has US, China, UAE, and Saudi Arabia as the largest trading partners out of which, it maintains a positive trade balance with US. Share of NAFTA countries in India’s total trade has increased from 10.08% to 13.04% from 2013-14 to 2020-21, with the highest total trade balance of US$ 119 billion with the US in 2020-21.
India has recorded exports worth of US$ 76 billion to US (2021-22), with Natural pearls, precious/semi-precious stone accounting US$ 14.67 billion (growing by 68.16% YoY); Pharmaceutical products at US$ 6.47 billion (dropping by 9.86% YoY); nuclear reactors, machinery and mechanical appliances at US$ 5.8 billion (growth by 42.89% YoY); mineral fuels at US$ 5.1 billion (growth by 341.69% YoY) and electrical machinery and equipment at US$ 3.5 billion (growth of 30.02% YoY). Textile articles and worn clothing (HS 63) is the 6th largest Indian exported product to US with a value of US$ 3.45 billion (growth of 27.76% YoY). The products with greatest export potential from India to US are Diamonds, worked (US$ 3.7 billion), Motor vehicles (US$ 2.1 billion), Jewellery (US$ 1.4 billion); Telephone sets (US$ 1.3 billion); Other organic chemicals (US$ 639 million) and Medicaments consisting of mixed and unmixed products (US$ 506 million) and according to trade map.
China (exports of US$ 541.55 billion in 2021) is the largest exporter to the US, followed by Mexico, Canada, Japan and Germany. Machinery, mechanical appliances, nuclear reactors is the top imported product category by the US followed by electrical machinery (HS 85) and vehicles (HS 87).
India imported a total of US$ 41.4 billion valued goods from US, with a 7.2% share in India’s total imports from world. Imports have grown at 55% YoY in 2021. The top imported products are mineral fuels, oils (HS 28) followed by natural/cultured pearls (HS 71) and Machinery, mechanical appliances, nuclear reactors, boilers (HS 84), making a place in the top imported products from US in 2021.
Both the ambitious democracies can unveil a huge potential of economic growth by creating more positive ecosystems, lowering trade barriers and clearing blockages. It will help the countries to realise their dream of exponential trade growth in line with potential in line with the projection.