The United States of America is the most important market for India in this region. In terms of statistics, it is the largest export destination for India.
Total trade between the two countries moved up by 5.3% to 7.68 billion dollars in 2020 from 7.29 billion dollars in 2019. But despite robust growth towards the year-end, India's total exports to the US in 2020 (January to December) were down by 11.3% to 51.1 billion dollars as compared to 57.7 billion dollars in 2019.
A significant contribution of information technology services would raise the overall exports to USA to approximately USD 100 billion. The US is one of the most prominent traditional markets for India’s products and services and has helped Indian producers in evolving their capacities both in merchandise and services products standards, technology, processes, etc. The recent macroeconomic data clearly shows that the US economy is doing well with a growth rate of 3.1 percent per annum. The US will therefore continue to be the strong anchor of India’s exports.
Enhancing trade and investment linkages with the US economy offers India a unique opportunity for finding markets for its technology products and services and products from high employment creating sectors such as textiles, agriculture, leather, and gems & jewellery. Therefore, these sectors will continue to receive major attention for accessing the US market. At the same time there are challenges relating to area such as intellectual property rights, immigration policies of the US Government, labour, and skill related policies of the US Government. Therefore, while on the one hand, the focus will be on promoting Indian exports in identified sectors, on the other hand, regular dialogue will be held with the US stakeholders in order to make India’s perspective on these issues clear. Important aspects of the India-US economic relationship for India include access for our high skilled professionals in US markets and resolution of the issue relating to social security contributions by Indian workers in the US, through the early conclusion of a Totalisation Agreement between the two countries.
Bilateral investment is a prominent tool within the bouquet of instruments of economic engagement between the two countries. With focus on ‘Make in India’, simplification and further opening up of investment policies and a focus on sector specific efforts for attracting investment, it is expected that investment flows will improve significantly. Targeted investments will make a significant contribution to the improvement of trade performance. One of the factors with implications for India-US trade ties is the outcome of the ongoing deliberations in the US on their GSP (Generalised System of Preferences) Program, which expired in July 2013.
India’s bilateral trade with Canada is at present USD 5.2 billion. There is significant potential for this bilateral trade to grow. There is complementarity between several sectors of the two countries. In 2010, Canada and India launched negotiations toward a Comprehensive Economic Partnership Agreement (CEPA). The most recent full negotiating round was held in August 2017 in New Delhi. At that time, constructive discussions were held on various issues, including cross-border trade in goods and services, e-commerce, telecommunications, sanitary and phytosanitary measures, and technical barriers to trade.
Since then, Canadian and Indian officials have held several stocktaking meetings, most recently in November 2020.
India is a high-priority trading partner and the Government of Canada continues to work with the Indian government to expand our trade relationship to its full potential and create opportunities for Canadians, including continuing work to make progress on an agreement.
It is expected that this agreement will offer significant trading opportunities to India’s employment creating sectors besides the services sector including information technology enabled services. Canada’s strengths in agricultural products (a sensitive area for India), its position on certain principles of market access to services and India’s concerns on flow of commitments up to sub-federal levels in Canada, are some of the challenges in these negotiations.
On the other hand, Mexico has USD 5.9 billion bilateral trade, it has the potential to grow significantly. Mexico is the destination for an array of products from India. Mexico’s participation in NAFTA, along with Canada, creates a framework that may be difficult to comply with. However, the potential of this market underscores the need for a closer look at it.
