India and the USA are two of the world’s largest economies and democracies, with a long history of bilateral cooperation and partnership. But how do they perform in terms of trade growth statistics? In this article, we will look at some of the data that showcases the potential trade between both countries.

YoY growth of both countries from 2015 to date

Here is a section showing the YoY growth of trade between India and the USA from 2015 to date for both exports and imports.

2015

India experienced a 3.9% drop in exports to the USA, while imports from the USA to India saw a decline of 4.7%. This decline can be attributed to various factors, including a global economic slowdown, depreciation of the Indian rupee, and ongoing trade disputes between the two nations.

2016

India's exports to the USA experienced a slight 1.4% dip, while imports from the USA to India witnessed a marginal decline of 1.6%. This trend can be attributed to uncertainties in global markets, India's demonetization efforts, and the dynamics surrounding the US presidential election, all of which play contributing roles in shaping these trade fluctuations.

2017

India's exports to the USA made a significant recovery, surging by 11.9%, while imports from the USA to India also saw a healthy growth of 6.1%. This remarkable turnaround can be attributed to the revival of the global economy, enhanced bilateral relations, and robust expansion in sectors such as pharmaceuticals and engineering goods, which collectively acted as key drivers for this positive trade momentum.

2018

India's exports to the USA witnessed a remarkable surge of 33.7%, while imports from the USA to India recorded a substantial rise of 12.6%. The simultaneous strong demand within both markets, strategic diversification of export products, and favorable exemptions from specific US tariffs collectively play pivotal roles in driving this impressive growth trajectory.

2019

India's exports to the USA experienced a modest decline of 2.1%, while imports from the USA to India saw a more significant drop of 7.1%. The trade tensions existing between the USA and China, coupled with India's economic slowdown, and the imposition of tariffs, collectively exerted adverse effects on the bilateral trade relationship between the two nations.

2020

India's exports to the USA experienced a steep decline of 16.2%, while imports from the USA to India also saw a notable fall of 9.5%. The far-reaching impact of the COVID-19 pandemic, including disruptions to global supply chains, diminished consumer demand, and the implementation of lockdowns and travel restrictions, all collectively contributed to the significant downturn in the trade dynamics between the two nations.

2021

India's exports to the USA rebounded impressively, marking a rise of 22.6%, while imports from the USA to India saw an even more substantial surge of 24.2%. The combined efforts of successful vaccination campaigns, strategic stimulus packages, and a resurgence in sectors such as textiles, chemicals, and automobiles play pivotal roles in driving this notable economic recovery.

2022

India's exports to the USA showed a robust growth of 16.1%, accompanied by a significant 19.8% uptick in imports from the USA to India. This growth can be attributed to strategies such as trade partner diversification, the expansion of digital services, and collaborative efforts addressing climate change and health concerns, all of which played a pivotal role in shaping these positive trade trends.

Factors increasing the trade relationships between the USA and India

The India-USA Trade Relationship: Strengthened by Shared Values, Diversified Trade, and Engaging Ties

• Shared Values and Interests: Democracy, rule of law, human rights, and market economy are commonalities. Both prioritize regional and global security, stability, and prosperity.
• Diversified Trade: Multi-sectoral collaboration spans energy, agriculture, health, defense, tech, education, and services. Complementary strengths include India's marketplace size, skilled workforce, and competitive costs, along with the USA's technology, capital, and consumer demand.
• Enhanced Dialogue: Platforms like S & CD, TPF, CD, CEO Forum, and HTCG foster trade collaboration. They tackle barriers, and disputes, identify opportunities, and deepen cooperation.
• People-to-People Ties: Strong connections enhance understanding. Indian diaspora excels in business, education, tech, arts, and public service. The USA attracts Indian students, tourists, professionals, and entrepreneurs.

Why is it the best time to supply to the USA?

The current scenario offers a great opportunity for Indian suppliers to expand their market share in the USA. 

This is because the USA has changed its agenda of procurement from China. Furthermore, with rising geopolitical tensions, trade frictions, human rights concerns, and supply chain disruptions caused by China’s non-market practices and policies, the USA has reduced its reliance on Chinese imports and sought alternative sources of supply. 

This has been further declining especially due to the whole COVID-19 impact. This creates a huge gap that Indian suppliers & manufacturers can fill with their competitive products and services.

Govt. policies as a factor of growth between countries and trade

Trade Agreements and Bilateral Partnerships

Government policies have played a pivotal role in fostering a conducive trade environment. Bilateral agreements, such as the US-India Trade Policy Forum, facilitate discussions and resolutions to trade-related issues, fostering trust and collaboration.

Ease of Doing Business Initiatives

Initiatives aimed at enhancing the ease of doing business have streamlined processes for exporters. India's consistent efforts to improve infrastructure, simplify regulations, and digitalize trade procedures have created a conducive environment for trade growth.

Investment and Manufacturing Incentives

Government incentives for investment and manufacturing have encouraged foreign and domestic players to contribute to the trade relationship. Initiatives like 'Make in India' have bolstered local production, enabling Indian suppliers to cater to diverse demands.

Conclusion

India and the USA have a robust and dynamic trade relationship that has grown significantly over the years. Both countries have immense potential to further expand their trade cooperation in various sectors. By leveraging their strengths, addressing the challenges, and pursuing their opportunities, both countries can achieve greater mutual benefits and contribute to their economic development and prosperity.