$113 billion in 2021: India-US goods trade marks new record

In yet another sign of the deepening economic relationship between India and the United States (US), bilateral trade in goods between the two countries crossed the $100 billion mark in 2021, making it the largest volume of goods trade in a calendar year in India-US economic history.

This also represents an almost 45% jump from 2020, and while US trade with its top 15 partners increased over the past year, the single biggest jump was with India.

India retains a trade surplus in the relationship.

According to figures released by the US Census Bureau, India-US bilateral goods trade was worth $113.391 billion from January to December 2021. India exported goods worth over $73 billion, and imported goods worth a little over $40 billion dollars.

In 2020 an unusual year because of the pandemic and subsequent economic restrictions  trade fell to a little over $78.2 billion, from the high of $92.1 billion in 2019. India had then exported goods worth $57.8 billion and imported goods worth $34.2 billion.

Placing the figures in perspective, Richard M Rossow, the Wadhwani chair in US-India Policy Studies at the Centre for Strategic and International Studies (CSIS) and the foremost expert of the bilateral economic relationship in Washington DC, said that bilateral trade has been on an upward trajectory for 20 years, and shrunk year-on-year only thrice since 2002. 

Mukesh Aghi, president and chief executive officer of the US-India Strategic Partnership Forum (USISPF), said that a key reason for the spike in Indian exports to the US was the concerted increase in demand in the US market. 

An official familiar with the bilateral relationship said that the spike in trade was also a product of the concerted Indian attempts to deepen economic ties with a range of American economic stakeholders be it through extensive commercial engagement or facilitating business-to-business exchanges or working to get commitments by major American corporates to source material from India or proactively leveraging the sentiment in the US to diversify from China.

While India is working with Australia, United Kingdom, European Union, Canada and the US to push through larger trade arrangements, any major free trade agreement is unlikely, especially with the US, given the domestic political mood in Washington against trade pacts.