India-U.S. to double bilateral trade in three years
March 1, 2006
KAMAL NATH AND ROB PORTMAN DISCUSS INDO-US BILATERAL TRADE
India and the United States will aim at doubling bilateral trade to a level of US $ 40 billion within three years and collaboration between small and medium enterprises of the two countries will play a major role in augmenting the trade flows. This was indicated by Shri Kamal Nath, Union Minister of Commerce and Industry, and Mr. Rob Portman, the United States Trade Representative (USTR) following a meeting they had here today to discuss bilateral trade relations. The two-way trade between India and the US in 2004-05 stood at US $ 20 billion. Underlining the vast potential for increasing the trade volume, Mr. Portman mentioned that USA’s merchandise trade with China alone was valued at US $ 300 billion annually, whereas USA’s trade with India covering both goods and services would amount to around US $ 30 billion.
Mr. Portman was accompanied by Mr. Karan Bhatia, Deputy USTR, Mr. Peter Allgeier, Deputy USTR and other US officials. Shri S.N. Menon, Commerce Secretary, Shri Ajai Dua, Secretary (Industrial Policy & Promotion), Shri G.K. Pillai, Special Secretary, Ministry of Commerce & Industry and other senior officials participated from the Indian side. The Doha Development Agenda also figured in the talks.
The discussions focussed mainly on a review of the activities of the India-US Trade Policy Forum, especially in the context of issues and priorities being addressed by the five focus groups on agriculture, tariff and non-tariff barriers (NBT) in industrial products, services, investment and innovation and creativity. The first meeting of the India-US Trade Policy Forum was held in November 2005 in New Delhi, co-chaired by Shri Kamal Nath and Mr. Rob Portman, where it was decided to set up the five focus groups. More recently, a meeting of the India-US Trade Policy Forum was held in Washington on 16-17 February 2006, which was co-chaired by Shri Menon from the Indian side and Shri Karan Bhatia from the US side.
The US is India’s largest trading partner and foremost export destination. At present, it accounts for 16.48% of India’s exports and around 6.26% of India’s imports. India accounts for only about 1.06% of the USA’s total exports and imports. Growth of India’s exports to the US in the year 2004-05 over the previous year was 15.50% while the growth in the US exports to India was 35.72% over the previous year. During the 8 months of the current financial year (April-November 2005), India’s exports to the USA at US $ 10,064.94 million registered a positive growth of 15.05% over the corresponding period of the previous year when the exports were US $ 8747.97 million. During April-November 2005, India’s imports from the US at US $ 4589.39 million registered a positive growth of 16.74% over the corresponding period of the previous year when the imports were US $ 3931.18 million.
There is huge untapped potential to increase bilateral trade. The major items of Indian exports to the US are: gems & jewellery; readymade garments (cotton) & accessories; manufactures of metals’ primary and semi-finished items and steel; and drugs, pharmaceuticals and fine chemicals.