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The partnership between India and the US is at a “defining stage” and both countries will work towards deepening trade and investment ties for mutual growth and prosperity, stated by India’s Commerce & Industry Minister, Piyush Goyal. Bilateral trade between the two countries has reached new highs and is expected to increase in the coming years. Goyal also expressed confidence in India’s target of achieving $2 trillion in exports by 2030, while economists caution that a decade is a long time frame to predict such goals. The Indian government has been taking initiatives to boost exports over the last 1.5 years.
India has introduced the Foreign Trade Policy 2023, renegotiated its terms and is working towards supporting its manufacturing base. The country aims to increase foreign direct investment inflows in manufacturing and has taken several initiatives to boost exports, which are still in their early stages and are yet to provide significant returns.
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India’s Commerce & Industry Minister, Piyush Goyal, announced the Foreign Trade Policy 2023 in April 2023, which has four main pillars: incentive to remission, export promotion through collaboration, ease of doing business, and emerging areas. Moreover, the country’s overall exports have already crossed $750 billion including services and merchandise exports. It is expected to reach $760 bn this year.
Exporters have welcomed the recent focus on trade promotion measures such as Remission of Duties and Taxes on Exported Products (RoDTEP), Trade Infrastructure for Export Scheme (TIES), and RoSCTL Scheme. The PHD Chamber survey reports that these initiatives will help make exports more robust in the future.
Reportedly, FDI equity inflows in the manufacturing sector have increased by 76% in FY 2021-22, reaching $21.34 billion, compared to the previous year’s $12.09 billion. However, the top five sectors receiving the highest FDI equity inflow are computer software and hardware, the services sector, the automobile industry, trading, and construction activities. India is working to attract more inflows into the manufacturing sector through initiatives such as the PLI scheme. The government’s reform processes over the last nine years aim to turn India into a global manufacturing hub, according to the commerce minister.
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India US Trade Relations on Growth
The bilateral trade between India and the US has increased by 7.65% to $128.55 billion in 2022-23 as per provisional data from the commerce ministry. India aims to become an export-oriented economy from its current account deficit state, and its growing trade ties with the US are aiding this objective.
During his address, Indian Commerce Minister Piyush Goyal encouraged US companies to establish their base in India and expand to newer borders like the requests of Africa and South- East Asia, pressing recent policy reforms and abecedarian macroeconomic parameters. Goyal also cited exemplifications of Indian and US companies contributing significantly to each other’s husbandry and suggested that both countries can expand in numerous sectors like defence, manufacturing, medicinals, fabrics, engineering products, bus factors, electrical products, and agrarian products. He also emphasized that India’s specialized and directorial gift cements its relationship with the world.
