INDIA - U.S Trade Ties -UPSC Current Affairs

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.

Probable Question

‘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.

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.

Also Watch a related video on UPSC Prelims 2022 Paper Analysis and enhance your civils Preparation :

India-China Trade

• 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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