Below is a snapshot of the latest trends in bilateral trade (based on the data released by the U.S. Census and Bureau of Economic Analysis as of June 8, 2020.  After witnessing a 3% growth in total bilateral trade, the QI 2020 registered a negative 2.8% growth due to the COVID-19 pandemic breakout featuring 2.5-month lockdown conditions in both the economies.  Import and export shipments had mostly been stalled/delayed during the lockdown periods, and consequently, the trade numbers do not capture the normal trends in bilateral trade.

Trends in U.S. India Bilateral Trade in Goods & Services: January-March 2020

  • Goods & Services Trade: The most recent data available for the first quarter of 2020 (January-March 2020) pushed the overall growth rate in cumulative bilateral trade down to 2.8%, mostly on account of 4.4% drop in bilateral trade in goods compared with the corresponding period in 2019.  Trade in services remained almost the same, mostly unaffected by the pandemic.
  • The U.S.-India bilateral trade in goods and services ($36.11 billion) for the first quarter of 2020 was down 2.8%, with U.S. exports and imports declining 0.5% and 4.4%, respectively. The U.S. exported $14.88 billion worth of goods and services to India in the first quarter 2020, down 0.5% from the corresponding period in the previous year; and the U.S. imported $21.23 billion worth of goods and services from India, down 4.4% from the previous year’s $37.14 billion level for the same period.

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Trade Balance

Trade in Goods

Two-way trade in goods at $22.92 billion during Q1 2020 (January-March 2020), with $8.98 billion U.S. exports to India and $13.94 billion worth imports from India, contracted 4.4% compared with the corresponding period in 2019. A closer look at Q1 data shows significant fall in items, such as mineral fuels, machinery, raw diamonds, machinery, and chemicals due to the closure of industrial activity for majority of the period; however, significant growth appeared in aircrafts exports that were already scheduled for delivery in India.

  • Cumulative U.S. merchandise exports to India for January-March 2020 slumped 0.8% to $8.98 billion from the corresponding period for 2019. Top 5 U.S. exports to India in the total exports in Q1 2020 included Mineral Fuels ($1.97 bl; down 15%), Precious Stones ($1.46 bl; down 20%), Aircrafts ($1.09 bl; up 181%), Machinery & Parts ($512 ml; down 20%), and Organic Chemicals ($396 ml; down 23%).
    Data Source: USITC
  • o U.S. imports from India for Q1 2020 at $13.94 billion, nosedived 6.6% from last year same period.  Top 5 items on the U.S. imports side were Precious Stones ($2.34 bl; down 18%), Pharmaceuticals ($1.93 bl; down 1%), Textiles ($1.76 bl; down 5%), Mineral Fuels ($569 ml; down 48%), and Machinery & Parts ($948 ml; 0%).
    Data Source: USITC

Trade in Services:

The Two-way trade in services between the two countries for the period January-March 2020, at $13.19 bl registered an incremental growth of 0.2%. U.S. exports of services to India totaled $5.89 bl during the first quarter of 2020, compared with $5.88 bl of the previous year’s level for the same period; likewise, U.S. imports of services from India rose marginally to $7.29 bl from $7.28 bl a year ago. 

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U.S. India Goods & Services Bilateral Trade:

Good and Services two-way trade between the U.S. and India in 2019 was $149 billion, registering 3% growth on top of a 13%-increase witnessed in 2018.  The USISPF in 2018 projected that U.S. India total bilateral trade can touch $238 billion by 2025 if the current 7.5% average annual rate of growth (AAGR) sustains.

USISPF Projections for U.S. India Two-way Trade (Billion US$)

Table Header Table Header Table Header Table Header Table Header Table Header Table Header Table Header
2019
2020
2021
2022
2023
2024
2025
AAGR 7.5%
153.7
165.3
177.7
191.2
205.5
221.3
238.2
AAGR 10%
157.0
172.8
190.3
209.8
231.4
255.3
283.4
AAGR 12.5%
160.6
180.8
203.1
228.9
257.1
289.5
326.9

The U.S. remains the top trading partner for India in terms of both trade in goods and trade in services.  While the bilateral trade between U.S. and India is approximately 62% in goods and 38% in services, the bilateral trade between India and China is dominated by goods. 

For comparison purposes, if we look at the goods trade only, India’s trade with China dropped 6% in 2019 to $85 billion, while India’s goods trade with the U.S. increased 5% to $92 billion, suggesting India’s deeper trade engagement with the U.S. than China.  China had a huge trade surplus of more than $57 billion with India, indicating China’s strength in the Indian market, especially in sectors, such as Electronics, Machinery, Organic Chemicals, Plastics and Medical Devices.  The U.S. goods exports to India, in comparison, were mainly concentrated in Mineral Fuels, Precious Stones, and Aircrafts.  The U.S. faces tough competition with China in the Indian market in areas, such as Electronics, Machinery, Organic Chemicals and Medical Devices.      

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