US becomes India's biggest trading partner at $119 billion

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US becomes India's biggest trading partner at $119 billion

  • The US surpassed China to become India’s top trading partner in 2021-22, reflecting strengthening economic ties between the two countries.

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.
    • Exports to the US increased to $76.11 billion in 2021-22 from $51.62 billion
    • Imports rose to $43.31 billion as compared to about $29 billion in 2020-21.
  • 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.
    • 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 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).
  • America is one of the few countries with which India has a trade surplus.
    • In 2021-22, India had a trade surplus of $32.8 billion with the US.

Trends in Trade and their reasons

  • The trend of increasing bilateral trade with the US will continue in the coming years.
    • As New Delhi and Washington are engaged in further strengthening the economic ties.
  • India is emerging as a trusted trading partner
    • Global firms are reducing their dependence only on China for their supplies and are diversifying business into other countries like India.
  • India has joined a US-led initiative to set up an Indo-Pacific Economic Framework and this move would help boost economic ties further.

Prelims Takeaway

  • Bilateral trade
  • Major trading partners
  • Trade surplus/deficit