The US Surpassed China To Become India's Top Trading Partner In 2021-22
The US surpassed China to become India's top trading partner in 2021-22, reflecting strengthening economic ties between the two countries. According to the data of the commerce ministry, in 2021-22, the bilateral trade between the US and India stood at $119.42 billion as against $80.51 billion in 2020-21. 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 the US amounted to $76,111.33 billion in 2021-22, a major increase from $51.62 billion in 2020-21, while imports rose to $43.31 billion from $29 billion in 2020-21, the data shows. At the same time, exports to China increased marginally to $21.25 billion in 2021-22 as compared to $21.18 billion in the previous year. Imports also rose to $94.16 billion from $65.21 billion in 2020-21. With the US, India's trade surplus stood at $32.7 billion in 2021. The trade gap with China stood at $72.9 billion in 2021-22, a major increase from $44 billion in 2020-21.
The bilateral commerce between India and the United States will continue to expand in the future years. India has joined a US-led effort to establish an Indo-Pacific Economic Framework (IPEF), which will strengthen economic ties even more. India, with its 1.39 billion people and the world’s third-largest consumer market and fastest-growing market economy, offers big opportunities for technology transfer, manufacturing, trade, and investment for US and Indian companies. Polished petroleum diamonds, medical drugs, jewelry, light oils and petroleum, frozen shrimp, made-ups, and other items are major exports from India to the United States, whereas major imports from the United States are petroleum, rough diamonds, liquefied natural gas, gold, coal, end up wasting and scrap, almonds, and other items
One of the few countries in India with a trade surplus is the United States. India has a $32.8 billion trade surplus with the United States in 2021-22. According to the data, from 2013-14 to 2017-18 and 2020-21, China was India’s largest trading partner. Before China, the UAE was the UAE’s most important commercial partner. With $72.9 billion in trade, the UAE was India’s third-largest trading partner in 2021-22. Saudi Arabia ($42.85 billion), Iraq ($34.33 billion), and Singapore ($30 billion) came in second and third, respectively.
Meanwhile, India’s merchandise exports continued their growth trajectory with April figures scaling a new high by crossing $40 billion, a 30% increase over April 2021. The increase in value was led by a 127.69% growth in petroleum products, a 71.69% growth in electronic goods followed by cereals (60.83%), coffee (59.38%), and processed food (38.82%) and leather product (36.68%) exports. Services also performed extremely well to reach $27.60 billion, an increase of 53% over April 2021, the ministry estimates show. Merchandise imports showed a similar trend in April 2022. The imports stood at $60.3 billion, an increase of 30.97% over imports of $46.04 billion in April 2021. The merchandise trade deficit in April 2022 was estimated at $20.11 billion against $15.29 billion in April 2021, an increase of 31.5%.
There is major room for exceeding in trade and investment ties, particularly in the trade conflict between the United States and China that began during Trump’s presidency. The significance of diversified supply chains has been highlighted by the Covid epidemic (beyond China). While the United States Trade Representative recognized the sharing transformation, services, health-related commerce, and farming as possible development sectors, conventional exports like clothes, diamonds, jewelry, chemicals, computers, and equipment all have room to grow. India has reduced FDI barriers in practically all sectors, especially recently in the military, and there is room for collaboration in this field. Of course, there are disputes due to competing interests and expectations. These issues arise because they are at various stages of growth and have different objectives. But, generally, always, the shared interests transcend the quirks.