The U.S. is now India’s largest trading partner and export partner, surpassing China, as per data collated by the country’s Commerce Department during the first three quarters of the year, local reports indicate.
The U.S. Was India’s Largest Trading Partner in the Last Nine Months
Statistics show that the two-way trade between the U.S. and India rose 50 percent to $28 billion, a slightly faster pace than China’s. The Asia’s economic powerhouse trade with the country rose 46 percent to $25.3 billion to become the second trading partner. As the competition between the two nations intensifies, the Indian rupee strengthened, which is why there has also been a spike in searches around pip meaning and other related definitions.
While the U.S. has been India’s largest trading partner in the past nine months, China took the lead in the first four months. During that time, it is estimated that China’s cross-trade export market stood at $36.6 billion, pipping the U.S. at $36.5 billion. However, the trade with the U.S. picked up in subsequent months, which pushed the total trade in the first three quarters to $231 billion, a 50 percent rise.
While trading with the two powerhouses dominated headlines, there was a notable increase in trading with other Pacific, Asia, and European partners. For instance, trading volumes between India and Australia, the UAE, South Africa, and Belgium rose. Export trade with Australia rose $6.4 billion to register an 85 percent increase. In comparison, those with Belgium and South Africa increased by approximately 80 and 91 percent to $6 and $5.9 billion, respectively.
India maintains close ties with its Asia neighbors, as reflected by the sharp spike in exchange trading volumes with Indonesia and Thailand. In the past three quarters, their respective trading volumes stood at $6.1 billion and $3.8 billion for a ballpark 55 percent.
U.S.-India Trading Relationship Improving Under President Biden
The relationship between India and the U.S. has remained warm for the last two decades. Fanning demand and making India’s goods and services attractive to the stringent U.S. are partly due to the vastness of India’s resources and dedication to quality improvement over the years.
Stable government and dedicated support through policy to India’s core sectors are also helping the case. Furthermore, the U.S. continues to make direct investments in the country. It is estimated that the FDI from the U.S. has directly helped create over five million jobs in the formal sector.
By 2001, data shows that the export market between India and the U.S. stood at a paltry $20 billion. However, there has been a drastic markup and increase in cross-border trade between the two countries, which eventually saw the U.S. topple China. The symbiotic relationship between these economic powerhouses is why the Biden Administration refocused on India, making it one of its strategic partners.
Meanwhile, there is a more significant economic expectation from New Delhi as they continue to foster their economic and trade ties with Washington.
This is shown by the shift in policy during the Biden Administration following Trump’s retrogressive decisions earlier on.
For example, in 2018, the U.S. imposed a 10 percent import duty on India’s steel and aluminum products. Later on, in 2019, President Trump removed India as a beneficiary of the Generalized System of Preferences (GSP) program citing the trade barriers which disadvantaged the U.S.
The Economic Recovery Post COVID-19
The growth in cross-border trade between the two countries and partners could be attributed to the change in commodity prices, especially steel and Oil, for the better part of the year. In a recovery year after the clutches of the Coronavirus in 2020 and earlier this year, the demand for commodities has been on an upward trend as supply glitches related to lack of vessels and containers exacerbated the situation.
Nonetheless, although trading with the U.S. is rising, India is mainly dependent on China, as shown by 2020’s statistics. Then, despite the harsh effects of the Coronavirus pandemic, India exported over $17 billion of machinery and other equipment to China, subsequently supporting the local economy.
