Consulate General of India, Atlanta, United States of America

India - US Bilateral Trade

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.

	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):

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%
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.
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%
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.
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