Table of Contents
What has happened?
- The US surpassed China to become India’s top trading partner in 2021-22, reflecting strengthening economic ties between the two countries.
- According to the data of the commerce ministry, in 2021-22, the bilateral trade between the US and India stood at USD 42 billion as against USD 80.51 billion in 2020-21.
Import & export
- Exports to the US increased to USD 11 billion in 2021-22 from USD 51.62 billion in 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 8 billion with the US.
Major export Items to US
- “Major export items from India to the US include petroleum polished diamonds, pharmaceutical products, jewellery, light oils and petroleum, frozen shrimp, made ups etc.
- Whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds etc,” Joshi said.
What about China?
- During 2021-22, India’s two-way commerce with China aggregated at USD 115.42 billion as compared to USD 4 billion in 2020-21, the data showed.
- Exports to China marginally increased to USD 21.25 billion last fiscal year from USD 21.18 billion in 2020-21,
- While imports jumped to USD 94.16 billion from about USD 21 billion in 2020-21.
- Trade gap rose to USD 72.91 billion in 2021-22 from USD 44 billion in previous fiscal year.
India’s largest trading partner
- 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.
- In 2021-22, the UAE with USD 72.9 billion, was the third largest trading partner of India.
- It was followed by Saudi Arabia (USD 42,85 billion), Iraq (USD 34.33 billion) and Singapore (USD 30 billion).
But why this shift?
- Trade experts believe that the trend of increasing bilateral trade with the US will continue in the coming years, Also as New Delhi and Washington are engaged in further strengthening the economic ties.
- Federation of Indian Export Organisations Vice President Khalid Khan said India is emerging as a trusted trading partner and global firms are reducing their dependence only on China, For their supplies and are diversifying business into other countries like India.
- “In the coming years, the bilateral trade between India and the US will continue to grow.
- 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,” Khan said.
Opportunity for US
- Rakesh Mohan Joshi, Director of the Indian Institute of Plantation Management (IIPM), Bangalore, too said that India is home to 1.39 billion people with the world’s third largest consumer market and
- The fastest growing market economy with unparalleled demographic dividend provides enormous opportunities for the US and Indian firms for technology transfer, manufacturing, trade and investment.
Q) Which among the following transactions are included in the capital account of the Balance of Payment?
- Investments from abroad
- Borrowings and lendings from abroad
- Changes in foreign exchange reserves
- All the above
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