Many in India were used to believe that Trade War between China and US will benefit India enormously. The general believe was that high tariffs on Chinese goods by US would help India to boost its exports to US. But the announcement of president Trump to terminate the GSP program for India came as a shock for many Indians.
There was a reason of optimism regarding enhanced trade with US. Bilateral trade in goods and services between India and the US has tripled over the last decade and reached $126 billion in 2017. The trade between India and US picked up the pace in the last decade despite the world economic crisis and recession. Despite having good relations with the South Asian giant, Trump has repeatedly made clear he sees the $27 billion trade deficit as “unfair.”
Trump administration wants to reduce the trade deficit with India. It is part of the general trend and policy of the American administration to reduce trade deficit and to increase exports. The US has been in the process to renegotiate the trade deals and agreements with all the major trading partners.
Trade in services with India (exports and imports) totaled an estimated $51.9 billion in 2017. Services exports were $23.7 billion; services imports were $28.1 billion. The U.S. services trade deficit with India was $4.4 billion in 2017.
According to the American Department of Commerce, U.S. exports of Goods and Services to India supported an estimated 197 thousand jobs in 2015 (latest data available) (82 thousand supported by goods exports and 116 thousand supported by services exports).
India was the United States’ 15th largest goods export market in 2017.
U.S. goods exports to India in 2017 were $25.7 billion, up 18.7% ($4.1 billion) from 2016 and up 71.6% from 2007. U.S. exports to India account for 1.7% of overall U.S. exports in 2017.
The top export categories (2-digit HS) in 2017 were: precious metal and stone (diamonds) ($7.0 billion), mineral fuels ($2.8 billion), aircraft ($2.2 billion), machinery ($2.1 billion), and optical and medical instruments ($1.4 billion).
U.S. total exports of agricultural products to India totaled $1.6 billion in 2017. Leading domestic export categories include: tree nuts ($738 million), cotton ($435 million), fresh fruit ($104 million), pulses ($53 million), and dairy products ($43 million).
U.S. exports of services to India were an estimated $23.7 billion in 2017, 15.2% ($3.1 billion) more than 2016, and 174% greater than 2007 levels. Leading services exports from the U.S. to India were in the travel, intellectual property (computer software, audio and visual related products), and transport sectors.
India was the United States’ 11th largest supplier of goods imports in 2017.
U.S. goods imports from India totaled $48.6 billion in 2017, up 5.6% ($2.6 billion) from 2016, and up 101.9% from 2007. U.S. imports from India account for 2.1% of overall U.S. imports in 2017.
The top import categories (2-digit HS) in 2017 were: precious metal and stone (diamonds) ($10 billion), pharmaceuticals ($6.1 billion), mineral fuels ($2.7 billion), machinery ($2.5 billion), and miscellaneous textile articles ($2.5 billion).
U.S. total imports of agricultural products from India totaled $2.6 billion in 2017. Leading categories include: spices ($272 million), tree nuts ($236 million), essential oils ($182 million), rice ($178 million), and processed fruit & vegetables ($125 million).
U.S. imports of services from India were an estimated $28.1 billion in 2017, 9.0% ($2.3 billion) more than 2016, and 183% greater than 2007 levels. Leading services imports from India to the U.S. were in the telecommunications, computer, and information services, research and development, and travel sectors.
The U.S. goods trade deficit with India was $22.9 billion in 2017, a 6.1% decrease ($1.5 billion) over 2016.
The United States has a services trade deficit of an estimated $4.4 billion with India in 2017, up 15.2% from 2016.
U.S. foreign direct investment (FDI) in India (stock) was $44.5 billion in 2017, a 15.1% increase from 2016. U.S. direct investment in India is led by professional, scientific, and technical services, manufacturing, and wholesale trade.
India’s FDI in the United States (stock) was $9.8 billion in 2017, up 11.5% from 2016. India’s direct investment in the U.S. is led by professional, scientific, and technical services, manufacturing, and depository institutions.
Sales of services in India by majority U.S.-owned affiliates were $24.5 billion in 2015 (latest data available), while sales of services in the United States by majority India-owned firms were $14.7 billion.(Source Office of the US Trade Representative)
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17 November, 2019