India-U.S. Relations: Trade

HE United States is India’s largest trading part-

ner and export destination. Two way trade in
1999 totaled U.S. $12.79 billion reflecting an in-
crease of more than 100% since 1992. India-U.S.
trade over the last 8 years has been as under:

——
Exports 3,781 5,736 | 6,169 | 7,321 | 8,225 ss
India’s
Imports 2,761 3,296 | 3,318 | 3,616 | 3,545 | 3,707

FTumover [5.95 [7312 [7598 | 9032 | 5487 hosa7 [1,770] 1,700

Balance
(+) 1,866 | 1,790 | 3,005 3,705 | 4,680 | 5,376

(U.S. $ millions) (* Source: U.S. Department of Commerce)

During January-May 2000, India’s exports to the
ULS. totaled $4.53 billion, while its imports from U.S.
amounted to $1.53 billion during the same period,
resulting in a positive trade balance of $3 billion.

Growth Rate

India’s exports to the U.S. increased by 10.44% in
1999, compared to 12.34% in 1998. Imports from
the U.S. grew by 4.59% during 1999 compared to a
decline of 1.96% in 1998. During January-May 2000,
our exports to the U.S. increased by 27% as com-
pared to the same period last year. Our imports from
U.S. on the other hand, grew by only 3%.

India’s share in U.S. trade

The volume of India-U.S. bilateral trade remains a
small fraction of U.S.’s global trade. While U.S. ex-
ports to India account for nearly 12% of India’s non-
oil imports and U.S. is the destination of 18.9% of
India’s exports, U.S.’s trade turnover with India con-
stitutes less than | % of its global trade. Our share in
U.S. imports has remained more or less stable over
the last 3 years; it was 0.89% during 1999. India
ranks 23" among countries that export to the U.S.

India - U.S. trade composition

The composition of India’s exports has undergone a
change over the years. Our exports to the U.S. have
been rising mainly on account of significant increases
in the exports of gems & jewelry, textiles and ready-
made garments, machinery, carpets, footwear and
leather products, dyes, iron and steel products, chemi-
cals, edible fruit and nuts and spices, coffee and tea.

Six items, namely, textiles and clothing, cut and pol-
ished non-industrial diamonds, carpets, shrimps and
prawns, footwear, leather goods and cashew nuts,
account for about 75% of total Indian exports to the
U.S.

There has also been a change in the composition of
our imports from the U.S. With India having become
self sufficient in food-grains, imports of wheat and
edible oil from the U.S. on a regular basis have
stopped. Crude oil, which was the second highest
import item in 1985, has also been virtually phased
out. The chief items imported from the U.S. at present
are machinery including project items, fertilizers,
aircraft and aeronautical equipment, and organic
chemicals.

Institutional framework for co-operation

The main joint business group for private sector co-
operation is the U.S.-India Business Council that
actively organizes promotional events apart from
holding annual meetings. The last annual meeting of
the U.S.-India Business Council was held on 12-13
June 2000 in San Francisco. Shri Ram Vilas Paswan,
Minister for Communications, Secretary Department
of Telecom, Finance Secretary, other government
officials and a large business delegation from India,
attended the meeting. Round table discussions were
held on issues covering power & fuel supply, finan-
cial services, trade and investment, chemicals and
petrochemicals, communications, transportation and
knowledge based industries.

General Electric has taken the initiative to set up an
India Interest Group with the Washington-based rep-
resentatives of some major U.S. Corporations as its
members. The India Interest Group, the National
Association of Manufacturers and the India-US. Joint
Business Council are participating in the commercial
alliance and are also associated with the Private
Sector Working Group of the Sub-Commission.

Visit of President Clinton

The U.S. President, Mr. Bill Clinton, accompanied by
a high powered delegation comprising of Commerce
Secretary William Daley, State Secretary Madeleine
Albright and Ambassador Susan Esserman, visited

See INDIA-U.S. RELATIONS: TRADE, Page 12

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