Trading Partner Portal: India
Over the last decade, India’s developing economy has emerged to become an important player in the global market. With a work force of 498.4 million in 2012—over three times the work force of the U.S.—India has the human capacity to sustain large and rapid development. As both a service-based and an agricultural economy, the country has seen strong growth in both sectors. The service industry has become an integral component of the Indian economy, making up 65% of the GDP while containing only 28% of the workforce. Agriculture, on the other hand, is the most popular sector, representing 53% of the work force, but only 17% of the GDP. Policies of economic liberalization, first implemented in the early 1990’s, have created a trend of steady economic growth—averaging 7% since 1997.
The reduction of controls on foreign trade and investment has opened the country to new opportunities and markets, which have sustained this pattern of growth. In 2016, the United States exported $21.68 billion to India. There were four categories of goods that ranked the highest: miscellaneous manufactured commodities, chemicals, primary metal, and computers.
India is currently California’s 11th largest export destination. In 2016, California exports to India brought in almost $5.13 billion, making up 23% of the U.S. total. California exports more to India than any other state, and the amount more than doubled from 2009 to 2016.
Miscellaneous manufactured goods made up 63.7 percent of California’s exports to India in 2016, which translated into $3.2 billion in exports. Other top export categories included agricultural products ($690 million), computers and electronic products ($563.9 million), and non-electrical machinery ($157 million). U.S. Department of Commerce
According to the most recent figures in 2015, U.S. direct investment to India was $28.3 billion while Indian direct investment into the U.S. was $9.2 billion. Bureau of Economic Analysis
Trade Policy Review 2015 : India – World Trade Organization
Characteristics of travelers from India to California – 2012 – Visit California
Framework for Cooperation on Trade and Investment
The promise that United States-India trade holds is manifested in the “Framework for Cooperation on Trade and Investment” that was signed by U.S. Trade Representative Ron Kirk and Indian Minister of Commerce and Industry Anand Sharma on March 17, 2010. This agreement strengthens bilateral cooperation and builds on recent rapid growth in U.S.-India trade, which has more than doubled over the last five years.
“There is almost limitless potential for growth in trade between our two countries, and that can contribute to economic recovery and job creation in the United States and continued economic growth in India,” said Ambassador Kirk.
“We can realize that potential by working together toward the goals set forth in the Framework agreement, such as developing and enforcing policies that encourage technological innovation, increasing agriculture, services, and industrial goods, and increasing investment flows. Closer collaboration with entrepreneurs and private sector leaders in both our countries will enhance our work.”
The United States and India agreed to work together to support greater involvement by small and medium-sized enterprises in each other’s markets, and to pursue initiatives in the further development of India’s infrastructure, and collaboration on clean energy and environmental services, information and communications technologies, and other key sectors.
Under this agreement, the U.S. and India intend to meet the objectives of developing and enforcing trade policies and fostering a trade-enhancing environment by undertaking initiatives to help us meet those goals. Examples include increasing opportunities for private sector partnerships in infrastructure projects; enhancing IPR awareness and enforcement; promoting increased bilateral cooperation in the healthcare, education, information technology, energy and environmental services industries; working to empower women and disadvantaged groups; creating greater mutual understanding of respective approaches to government procurement; and SME development.
The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business. New multilateral, sectorial and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
Reasons for Position
- This Agreement is a critical element of the U.S. strategy to liberalize trade through multilateral, regional and bilateral initiatives.
- The FTA will increase momentum toward lowering trade barriers and set a positive example for other developing economies in the world.
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