India - US Bilateral Trade
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India-US Trade and Investment

Bilateral Trade

Rapidly expanding trade and commercial linkages between India and U.S. form an important component of the multi-faceted partnership between the two countries. Total bilateral trade (goods and services) between India and US increased at a CAGR of 15% from $20 BN in the year 2000 to over $132 BN in the year 2015 (Services trade data available only till 2013). In this period, the growth in bilateral trade was accelerated by services trade, which grew at a CAGR of 20%. Goods trade grew at a CAGR of 11% in the same period. Based on the most recent figures, both goods and services contributed almost equally to the total bilateral trade with goods accounting for 49% and services accounting for 51% of the total trade value.

Goods Trade: Starting from a modest $ 14 BN in 2000, the bilateral trade in goods has increased to $66 BN in 2015 (CAGR of 11%), making U.S. our second largest trading partner. Of this, India exported $44.7 BN to US and imported $21.5 BN from US. Trade in goods during Jan-May 2016 was $27.37 billion as compared to $27.97 billion during Jan-May 2015; which is a 2.1% drop in trade.

Trade in Services: Bilateral trade in services grew at a very fast pace since the year 2000 increasing from mere $6 BN in 2000 to $66 BN in the year 2013 (CAGR of 20%). Of $66 BN in 2013, India’s exports of services to the U.S. were valued at $31 BN and India's imports of services from US were valued at $35 BN.

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2010

2011 

2012 

2013 

2014 

2015

Jan-Jun 2015

Jan- Jun 2016

India's exports to US

29.5

         36.2

     40.5

        41.8

      45.2

         44.7

23.0

22.7

% growth

 

22.4%

12.1%

3.3%

8.1%

-1.1%

--

-1.6%

India’s imports from US

     19.2

         21.5

      22.1

       21.8

       21.6

         21.5

11.0

10.0

% growth

 

11.9%

2.6%

-1.2%

-1.0%

-0.5%

--

-9.4%

India - US Trade in Services ($ BN)

 

2010

2011 

2012 

2013 

2014 

2015

Jan-June 2015

Jan-June 2016

India's exports to US

     22.2

        27.3

       29.8

       31.2

 N.A.

 N.A.

N.A.

N.A.

% growth

 

23.0%

9.2%

4.9%

--

 --

--

--

India’s imports from US

    24.7

        28.1

       29.4

       34.8

N.A.

N.A.

N.A.

N.A.

% growth

 

13.4%

4.7%

18.6%

--

--

--

--

Total Bilateral Trade ($BN)

 

2010

2011 

2012 

2013 

2014 

2015

Jan-June 2015

Jan- June 2016

Goods Trade

48.8

57.7

       62.6

      63.7

      66.9

       66.3

34.1

32.7

% growth

30%

18%

9%

2%

5%

-1%

--

-4.1%

Services Trade

46.9

55.3

59.1

66.1

NA

 NA

NA

NA

% growth

11%

18%

7%

12%

--

--

--

--

Total Trade

95.7

113.0

121.8

129.8

--

--

--

--

Source: US Department of Commerce, US Census Bureau

Analysis of Trends in Bilateral Trade in 2015

Pharmaceuticals: The pharma exports from India have consistently shown an upward trend reflecting the strength of the Indian generic pharma industry in the US market.  Exports of pharmaceuticals grew from $ 4.8 billion in 2014 to $ 5.9 billion in 2015 registering a growth rate of 23.1% as compared to the same period last year. This trend continues in the first half of 2016 wherein pharma exports have grown substantially from $ 2.81 billion as of June 2015 to $ 3.9 billion in June 2016, thus reflecting a growth rate of 38.9%.

Overall, after a steady growth over several years, India-US goods trade declined by 1% in 2015 as compared to 2014. India’s exports to US fell by 1.1% (drop of $487 million) and US exports to India declined by 0.5% (drop of $98 million).

A drastic drop in crude oil prices from an average of $93 a barrel in 2014 to $49 a barrel in 2015 (a decline of 48%), was one of the main reasons behind the fall in India’s exports.

The maximum fall was witnessed in five main categories (the figure in brackets is the actual decline):

  1. Mineral Fuels ($1.9 BN):  Fall in exports in Mineral Fuels was in line with the decline in world imports by US; Mineral Fuel imports in US fell by 45% in 2015, while imports from India fell by 42%. The fall in export value was mainly driven by the fall in price of crude oil. In volume terms, exports from India were less by 4 million barrels in 2015 as compared to previous year. Mineral Fuel oil exports fell to $ 954 million during Jan-May 2016 from $ 1176 million during Jan-May 2015; which is a drop of 18.9%
  2. Lac, Gums, Resin & Vegetable Saps ($617 million): US demand of Guar Seeds, used by the shale gas industry, fell because of an oversupply of crude oil in the world market and subsequent fall in crude prices led to the halving of shale gas drilling in US, slashing both the demand and price of guar seeds.
  3. Organic Chemicals ($232 million): Drop in export of Organic Chemicals was driven by the fall in the export of Benzene (by $144 million), Heterocyclic Comp (by $67 million) and Heterocyclic Comp Unfused (by $67 million). The overall US demand of benzene in volume terms increased by 13%, however volume exported by India fell by 48%. Countries like South Korea, Brazil, Netherlands, Singapore and Saudi Arabia replaced India in meeting US benzene demands. Organic Chemicals exports fell to $865 million during Jan-May 2016 from $928 million during Jan-May 2015; which is a drop of 6.8%
  4. Iron and Steel ($200 million):  There was a major decline in flat rolled products of iron or non-alloy steel (less by $141 million). New AD and CVD investigations against Indian steel products appear to  have depressed exports from India.
  5. Natural Pearls and Precious Stones ($179 million): Overall imports of US fell by 8.5%; while imports from India fell by 1.9%.

 

5 Year Trend Analysis of the Top Ten Export items of India to US

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Source of Data: U.S. Department of Commerce, Bureau of Census

5 Year Trend Analysis of the Top Ten import items of India from US

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Source of Data: U.S. Department of Commerce, Bureau of Census

Bilateral Trade Trends during 2016

India's Exports to the U.S. - Top 10 Items
Period: January - June 30, 2016

 

HS Code

Commodity

US $BN

% Share in US Imports

% Change 2016/2015

71

Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin

5.17

22.79

11.45

30

Pharmaceutical Products

3.9

17.22

38.92

62

Apparel Articles And Accessories, Not Knit Etc.

1.2

5.28

2.44

63

Textile Art Nesoi; Needlecraft Sets; Worn Text Art

1.14

5.01

-1.74

27

Mineral Fuel, Oil Etc.; Bitumin Subst; Mineral Wax

1.08

4.77

-34.56

29

Organic Chemicals

1.02

4.52

-5.65

84

Nuclear Reactors, Boilers, Machinery Etc.; Parts

1.0

4.4

-22.48

61

Apparel Articles And Accessories, Knit Or Crochet

0.84

3.72

-1.56

87

Vehicles, Except Railway Or Tramway, And Parts Etc

0.65

2.89

-5.04

85

Electric Machinery Etc; Sound Equip; Tv Equip; Pts

0.65

2.88

1.93

Source of Data: U.S. Department of Commerce, Bureau of Census

 

India’s Imports from the U.S. - Top 10 Items 
Period: January - June 30, 2016

 

HS Code

Commodity

US $BN

% Share in US Imports

% Change 2016/2015

71

Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin

2.94

29.38

-14.23

84

Nuclear Reactors, Boilers, Machinery Etc.; Parts

0.98

9.82

-9.23

90

Optic, Photo Etc, Medic Or Surgical Instrments Etc

0.65

6.55

-0.26

85

Electric Machinery Etc; Sound Equip; Tv Equip; Pts

0.6

6.04

-15.02

27

Mineral Fuel, Oil Etc.; Bitumin Subst; Mineral Wax

0.55

5.46

-24.16

88

Aircraft, Spacecraft, And Parts Thereof

0.46

4.56

-40.78

29

Organic Chemicals

0.39

3.9

-3.4

39

Plastics And Articles Thereof

0.35

3.51

9.54

38

Miscellaneous Chemical Products

0.29

2.88

0.43

72

Iron And Steel

0.25

2.5

5.29

Source of Data: U.S. Department of Commerce, Bureau of Census

 

Top 5 Competitors of India’s top 5 Exports to the U.S. 
Period: January- June 30, 2016

S.No.

HS Code

India’s Top 5 export items to US

US $BN

Top 5 
Competitors

1

71

Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin

5.17

Israel, Canada, Mexico, Switzerland, Belgium

2

30

Pharmaceutical Products

3.9

Ireland, Germany, Switzerland, United Kingdom, Canada

3

62

Articles of Apparel And Clothing Accessories, Not Knitted Or Crocheted

1.2

China, Vietnam, Bangladesh, Indonesia, Mexico

4

63

Textile Art Nesoi; Needlecraft Sets; Worn Text Art

1.14

China, Pakistan, Mexico, Bangladesh, Turkey

5

27

Mineral Fuel, Oil Etc.; Bitumin Subst; Mineral Wax

1.08

Canada, Saudi Arabia, Venezuela, Mexico, Colombia

Source of Data: U.S. Department of Commerce, Bureau of Census

Bilateral Investments

Indian data:

As per FDI statistics released by DIPP, the U.S. is the fifth largest source of foreign direct investment into India. The cumulative FDI inflows from the US during April 2000 to March 2016 amounted to $ 17.94 billion constituting 6% of the total FDI inflows into India. During the latest fiscal April 2015 – March 2016, FDI from US stood at $ 4.19 billion. According to CII survey report released in August 2015, 100 Indian companies have made $15 billion worth of tangible investments across 35 states, creating more than 91,000 American jobs. Among large Indian corporations having investments in the US are Reliance Industries Limited, Tata Consultancy Services, Wipro, Essar America, Piramal, Mahindra, Lupin, SunPharma, etc.

US data:

U.S. FDI in India during 2005 to 2015 amounted to $ 28 billion whereas Indian FDI into the US between 2005 and 2015 amounted to 9.3 billion.

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As on August 18, 2016



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