Key Country Contacts
Trade Overview
Over the last decade, India’s developing economy has emerged to become an important player in the global market. With a work force of 467 million in 2010—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 62.6% of the GDP while containing only 34% of the workforce. Agriculture, on the other hand, is the most popular sector, representing 52% of the work force, but only 17.5% 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 2011, the United States exported over $21.6 billion to India. There were three categories of goods that ranked the highest, chemicals, miscellaneous manufactured commodities and machinery, except electrical.
India is currently California’s 12th largest export destination. In 2011, California exports to India brought in almost $3.8 billion. California exports more to India than any other state, and the amount increased by approximately 75 percent from 2009 to 2011. Miscellaneous manufactured goods made up 55 percent of California’s exports to India in 2011, which translated into $2 billion in exports. Computers and electronic products are the second largest export to India and brought in $662 million in 2011. As a group they have gradually increased in quantity and prominence for more than a decade.
U.S. Department of Commerce
In 2010, U.S. direct investment to India was $27 billion.
Bureau of Economic Analysis
World Trade Organization's Trade Policy Review : India
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 thrade 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.
CalChamber Position
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, sectoral 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.
Profiles in Trade
Growth in Export Opportunities Broadens Need for Financial Partners with Experience |
(June 12, 2008) On average, 20th century Westerners — whether from Great Britain, Belgium, the Netherlands, the United States, Canada or Australia — had three times the material wealth and standard of living of their forebears the century before.
“The world is on the cusp of another explosive economic growth phase, this time in emerging markets such as India, Brazil and China,” says Sanjiv Sanghvi, chief executive officer of Wells Fargo HSBC Trade Bank. Full Article
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