US are India’s largest trading partner accounting nearly for 20% of the country’s exports and 10% of its imports. Thus, US play a dominant role in India’s trade. On the other hand, India accounts for only 0.6% of US’s total exports and 0.8% of its Imports.
The bilateral trade had been more or less stagnant in the 1980s, but increased significantly thereafter. During 1997-98, our exports to the US have registered a growth of about 6%, and imports have grown by about 3% between 1996-97.
During April-August 1998, India’s exports to US have grown up by 28% and the imports from US have grown up by 11%. India has been having a favourable balance of trade for the last one decade.
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Composition of India’s exports to US:
Composition of Indian exports to US over the years has undergone a significant change. The share of non- traditional items and value-added products which have increased India’s exports to US in recent years, have risen mainly on account of significant increase in the exports of textiles and clothing, gems and jewellery, leather and leather products, engineering goods, computer items, etc.
At present, major items of exports to US are textiles and apparels, diamonds, jewellery and precious stones, engineering goods, shrimps and prawns, cashew nuts, carpets, handicrafts, naphtha, dye stuffs, auto tyres, computer software.
During 1997-98, gems and jewellery sector constituted the highest share of about 29% in our exports to US, followed closely by textiles with 26% share. Other product groups have been Engineering Products (8.6%), carpets and handicrafts (6.9%), chemical products (6.7%) and agricultural products (6.7%). These six product groups contributed for more than 84% of our total exports to US.
Composition of India’s imports from US:
As in the case of exports, the composition of imports from US has also undergone a change. The major items imported from US, at present, are fertilisers, aircrafts, turbo jets, aircraft parts, machinery parts, malt extracts, soya bean oil, automatic data processing machines, electronic goods, wood pulp, parts of railway locomotive, etc. During 1997-98, engineering products had a maximum share of about 47%. The share of chemical products is at about 24%.
Trade promotional activities:
India and US embarked on a renewed initiative in mutual economic cooperation, as a result of Indian Prime Minister’s successful visit to US in May, 1994. In January, 1995, during the visit of the US Commerce Secretary, the Indo-US Commercial Alliance was launched initially for 2 years.
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The Alliance focuses on four sectors viz., agri-business, information technology, power and transportation and infrastructure. The Commercial Alliance has done notable work in the direction of improving trade and investment relations, particularly in the thrust sectors.
The second and third joint board meetings of the alliance were held in New Delhi in March, 1996 and Washington DC in October, 1996 respectively. At the Washington DC meeting, the Board of the Alliance decided to extend the commercial alliance by another two years, upto January, 1999.
During this meeting, the two sides resolved to include environment sector as another area. It was also agreed to encourage participation of small and medium Enterprises.
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The Indo-US Economic and Commercial Sub-commission which was revived in 1995, met in Washington DC in December, 1996. The 19th meeting of the Indo-US Joint Business Council was also held in New Delhi in December, 1996.