India and U.S Bilateral Trade Relation

India and U.S Bilateral Trade Relation

The goods and services trade between India and U.S has increased from $104 billion in 2014 to $114 billion in 2016. In the two-way (India and U.S) trade merchandise trade was at $66.7 billion. Of this, India’s goods exports to the USA was valued at $ 46 billion and India’s import of goods from USA was at $21.7 billion. And for trade in terms of services it was at $47.2. Billion. Of this, India’s exports of services to the USA was valued at $26.8 billion and India’s imports of services from USA was at $20.3 billion. Both the countries made commitment to take necessary steps for increasing the bilateral trade to $500 billion. The bilateral trade between two countries showing a satisfactory growth trajectory in 2017. During the first quarter bilateral trade was at $17.2 billion as compared to $16.2 billion during the corresponding period in 2016. Of this, India’s export was $11.4 billion and India’s import from USA was $5.8 billion. These statistics were helped to reduce trade deficit of India during January to March 2017.

            While visiting to USA, in September 2014 of the Prime Minister of India, both nation set a target to increase trade between them in terms of goods and services to $ 500 billion. In June 2016 prime minister of India, Narendra Modi and US President Obama Pledged to explore new opportunities to decline all the barriers in economic growth, movement of goods and services, and to support deeper integration into global supply chain, by creating new jobs and help to increase both side economy.

According to U.S Bureau of economic analysis, U.S direct investment in India at $28.33 billion in 2015. As per Indian official statistics, the cumulative FDI inflows from the US from April 2000 to December 2015 amounted to almost $ 17.94 billion making nearly 6% of the total FDI into India, which the U.S. the fifth largest source of FDI into India. In the past few years Indian investment is increasing into the USA which shows a novel feature of bilateral ties. According to CII and Grant Thornton survey released in August 2015, India companies are contributing highly by making $ 15 billion worth of tangible investments across 35 states, creating more than 91,000 American jobs

India-U. S have made several platforms to strengthen bilateral engagement on Economy and trade front.

Ministeriallevel Economic and Financial Partnership (EFP), 2010

 
Ministerial Trade Policy Forum

Bilateral India-U.S. CEO's Forum: For greater involvement of private sector in discussion on issues involving trade and investment which held its last meeting in August 2016 in New Delhi coinciding with the Strategic & Commercial conversations.

U.S.-India Infrastructure Collaboration Platform

Apart with these U.S companies will be leading the development of Allahabad, Ajmer and Vishakhapatnam as smart cities in India. 

USAID is going serve as knowledge partner for the Urban India Water, Sanitation and Hygiene (WASH) alliance to help leverage business and civil society (Gates Foundation) to facilitate access to clean water, hygiene and sanitation in 500 Indian cities.

Despites of getting a higher rank of India and U.S Trade relation in past few months there were obstacles that have an adverse effect on the India and U.S Trade relation as US criticizes India for certain reasons like.

·        High tariff rates on imports

·        High surcharges and taxes on a variety of imports

·        Non-tariff barriers on US exports to India

From rural sponsorships to licensed innovation rights to specialized measures, the United States Trade Representative (USTR) has drilled down far reaching issues crosswise over areas that are hurting US exchange interests in its business with India. USTR's 2018 National Trade Estimate Report on Foreign Trade Barriers (NTE), distributed as a buddy piece to US President Donald Trump's 2018 Trade Policy Agenda on March 30, discusses twelve such territories that present exchange boundaries for US organizations. These divisions could be the focal point of India-US exchange talks in future as the Trump organization gets down to rectifying existing exchange uneven characters with its exchange accomplices and elevating neighborhood assembling to supplant imports. 

NTE distinguishes a few ‘specialized obstructions' that are hurting the fare prospects of American organizations occupied with the make of toys, hardware and data innovation products, media transmission gear, bundled sustenance things, and in territories like biotech crops, animal’s hereditary qualities, dairy and mixed refreshments. It considers India's sustenance trying and benchmarks as a method for making sterile and phytosanitary boundaries for pork and poultry sends out. Taxes and different charges on imports, import licenses and traditions methodology were likewise a worry. 

The US blames India for seeking after discriminating strategies to ensure its household administrations - protection, saving money, varying media administrations, legitimate, telecom administrations, and so forth. Hindrances to section incorporated India's remote access approach, satellite administrations and circulation administrations. Information restriction, innovation, web administrations like go-between risk, tax collection and electronic business figured as boundaries to computerized exchange.

The US rundown of India explicit issues comes when it is enhancing its exchange offset with India. The NTE calls attention to that US merchandise exchange shortfall with India was USD 22.9 billion of every 2017, a 5.9 percent diminish (USD 1.4 billion) more than 2016. US merchandise fares to India were USD 25.7 billion, up 18.7 percent (USD 4.0 billion) from the earlier year. Relating US imports from India were USD 48.6 billion, up 5.6 percent.

As per NTE, India was the fifteenth biggest merchandise send out market for US in 2017. US fares of administrations to India were an expected USD 23.1 billion out of 2017 and imports were USD 28.7 billion. Offers of administrations in India by lion's share US-possessed offshoots were USD 24.5 billion of every 2015 (most recent information accessible), while offers of administrations in the US by lion's share India-claimed firms were USD 14.7 billion. US remote direct speculation (FDI) in India (stock) was USD 32.9 billion out of 2016 (most recent information accessible), a 10 percent expansion from 2015. US coordinate interest in India is driven by expert, logical and specialized administrations, assembling and discount exchange.