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US replaces China as India's top trade partner

THE US has overtaken China to become India's top trading partner, indicating strengthening Indo-American economic ties just ahead of President Donald Trump’s India visit starting on Monday (24).

In 2018-19, the bilateral trade between the US and India stood at $87.95 billion, says latest Indian commerce ministry data.


During the period, India's two-way commerce with China aggregated at $87.07 billion.

Similarly, during April-December 2019-20, the bilateral trade between the US and India stood at $68 billion. It stood at $64.96 billion with China in the same period.

China used to be India's top trading partner since from 2013-14 to 2017-18. Before that, the UAE had held the top slot.

Trade experts believe that the positive trend in Indo-US trade will continue in the coming years, as New Delhi and Washington are engaged in boosting ties.

An expert said that if the countries finalise a free trade agreement (FTA), bilateral trade would soar further.

“FTA with US will be very beneficial for India, as the US is the biggest market for domestic goods and services,” said Federation of Indian Export Organisations Director General Ajay Sahai.

He said that India's American exports as well as imports were increasing, while both were on the decline vis a vis China.

The US is one of the few countries with which India has a trade surplus. Notably, India has a huge trade deficit with China.

In 2018-19, India had a trade surplus of $16.85 billion with America, while it registered a deficit of $53.56 billion with China.

On the American front, India is demanding cut in visa fees, exemption from high duties imposed by the US on certain steel and aluminium products, and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.

The US wants from India greater market access for farm and manufacturing products, dairy items, medical devices, and data localisation, apart from cut on import duties on some information and communication technology products. It has also raised concerns over its high trade deficit with India.

Though in-depth discussions were likely, a trade deal during the presidential visit had been ruled out. “Well, we can have a trade deal with India, but I’m really saving the big deal for later on,” said Trump recently.

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