India - U.S. Trade

Trade and commerce form a crucial component in the rapidly expanding and multi-faceted relations between India and US. From a modest $ 5.6 billions in 1990, the bilateral trade in merchandise goods has increased to $ 21.68 billion in 2004 representing an impressive 387% growth in a span of 14 years. India’s merchandise exports to the U.S.A. grew at 19.28 % from US $ 13.05 billion in 2003 to US $ 15.57 billion in 2004.US  merchandise exports to India increased from US $ 4.98 billion in 2003 to US $ 6.11 billion in 2004, an increase of 22.69%. US exports to India recorded a 22% plus growth for second consecutive year.  

A tabular profile of the bilateral trade during the recent period is given below. 

Bilateral Merchandise Trade (2001 to 2005*)
                                                                                         (In US $ Millions)

* Indicates the period from January to August 2005 only.
Source: U.S. Department of Commerce      

A profile of growth trends of some major items of bilateral trade in merchandise in the recent period is given below:  

India’s exports to US 

The major items of export from India are: 

• Cut and polished diamonds and Jewelry is a major item of India’s exports to the US accounting for 29% of total exports to US. Exports of this item grew from US $ 3958.74 million in 2003 to US $ 4515.76 million in 2004.
  

• Textiles exports to the US grew from US $ 3480.78 million in 2003 to US $ 3950 million in 2004.  
  

• Engineering goods and machinery including electrical machinery grew sharply from US $731.73 million in 2003 to US $ 1 billion in 2004. 
  

• Export of organic chemicals to the US grew from US $ 408.07 million in 2003 to US $ 518 million in 2004 
  

• Exports of vehicles and parts (excluding railway) to the US grew from US$ 215 million in 2003 to US$ 303 million in 2004. 

US exports to India 

The major items of export from US to India are: 

• Engineering goods and machinery including electrical machinery contribute to a third of the total US exports to India. US exports of these items grew from US$ 1641 million in 2003 and to US$ 2131 million in 2004.
  

• Export of precious stones and metals from US to India grew from US $ 411 million in 2003 to US $ 583 million in 2004. 
  

• Organic chemicals exported from US to India grew from US $ 299 million in 2003 to US $ 471 million in 2004.
  

• Optical and medical instruments grew from US $ 341.25 million in 2003 toUS $ 467.90 million in 2004
  

• Export of aircraft, aviation machinery and parts grew from US $ 317.48 million in 2003 to US $ 376.92 million in 2004.
            

Trends in 2005 (Upto August 2005) 

During the period January to August 2005, the total bilateral trade in merchandise goods recorded a growth of 23.44% to US$ 17.21 billion compared to US$ 13.94 billion during the corresponding period in 2004. A summary profile of growth trends in Indian exports to US and US exports to India is given below. 

i)  Major items of export from India to US

During the period from January to August 2005, exports from India to US increased by 18.22% to $12.02 billion compared to the corresponding period in 2004, though the overall US global imports grew only by 13.50%. Select major items with their percentage shares are given below. 

a) Diamonds & precious stones (29%)

b) Textiles (25%)

c) Iron & Steel (5.73%)

d) Organic Chemicals (3.46%)

e) Electrical Machinery (3.24%) 

(ii)  Major items of export from US to India: 

During the period January to August 2005, the total US merchandise exports to India increased by 37.43% to US $5.2 billion compared to the corresponding period in 2004. Interestingly, the US global exports during this period grew only by 10.76%. Select major items with their percentage shares are given below 

a) Engineering goods & machinery (including electrical) (30.20%)

b) Precious stones & metals (9.25%)

c) Organic chemicals (7%)

d) Optical instruments & equipment (7%)

e) Aviation & aircraft ( 10 .4%)