INDIA - U.S Trade Ties -UPSC Current Affairs
Upgrade your UPSC CSE preparation with our Daily dose of Current Affairs. Today’s edition will discuss INDIA – U.S Trade Ties. Check the topic’s relevance from the UPSC CSE point of view.
For Prelims: India-US Relations, Indo-Pacific Strategy
For Mains: Bilateral Groupings & Agreements, Indo-Pacific Region, India US Relations – Challenges and Areas of Cooperation
Why in the News?
Recently, the U.S. surpassed China to become India’s top trading partner in 2021-22, reflecting strengthening economic ties between the two countries.
‘The US surpassed China to become India’s top trading partner in 2021-22’. In the light of the statement discuss the associated Challenges of India-US Trade Ties.
About India-US Trade Ties
- In 2021-22, the UAE with $72.9 billion, was the third-largest trading partner of India. It was followed by Saudi Arabia ($42,85 billion), Iraq ($34.33 billion) and Singapore ($30 billion).
- The bilateral trade between the U.S. and India stood at $119.42 billion in 2021-22 as against $80.51 billion in 2020-21.
- Exports to the U.S. increased to $76.11 billion in 2021-22 from $51.62 billion in the previous fiscal year, while imports rose to $43.31 billion from about $29 billion.
- In 2021-22, India had a trade surplus of $32.8 billion with the U.S.
- America is one of the few countries with which India has a trade surplus.
- Major export items from India to the U.S. include petroleum polished diamonds, pharmaceutical products, jewellery, light oils and petroleum, frozen shrimp, made ups etc.
- whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds etc.
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Reasons for Increasing Bilateral Trade
- India is emerging as a trusted trading partner and global firms are reducing their dependence only on China for their supplies and are diversifying business into other countries like India.
- In the coming years, the bilateral trade between India and the U.S. will continue to grow. India has joined a U.S.-led initiative to set up an Indo-Pacific Economic Framework (IPEF) and this move would help boost economic ties further.
- Experts believe that the trend of increasing bilateral trade with the U.S. will continue in the coming years also as India and America are engaged in strengthening economic ties.
- During 2021-22, India’s two-way commerce with China aggregated at $115.42 billion as compared to $86.4 billion in 2020-21.
- Exports to China marginally increased to $21.25 billion last fiscal year from $21.18 billion in 2020-21, while imports jumped to $94.16 billion from about $65.21 billion in 2020-21.
- Trade gap rose to $72.91 billion in 2021-22 from $44 billion in the previous fiscal year.
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