US Beats China to Become India’s Largest Trading Partner

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The United States has now become India’s top trading partner, ousting China from the spot and further cementing America’s business ties with the South Asian superpower.

Bilateral trade between Washington and New Delhi was at $119.4 billion in 2021–22, an increase of more than 48 percent from the $80.5 billion in trade in 2020–21, according to the Indian commerce ministry.

American exports to India rose to $43.31 billion from $29 billion during this period, while imports from India to the United States rose to $76.1 billion from $51.6 billion. India’s trade with China rose to $115.4 billion from $86.4 billion but remained lower than its trade with the United States.

China was India’s top trading partner from fiscal years 2013–14 to 2017–18 and then in 2020–21. After the United States and China, the United Arab Emirates was India’s third largest trading partner in 2020–21, with $72.9 billion in trade, followed by Saudi Arabia with $42.9 billion, Iraq with $34.3 billion, and Singapore with $30 billion.

According to experts, bilateral trade between the United States and India is poised to increase further as both nations seek to strengthen ties.

As India is home to 1.4 billion people with the fastest growing economy and the third-largest consumer market in the world, it offers tremendous business opportunities for U.S. and Indian firms, said Rakesh Mohan Joshi, director of the Indian Institute of Plantation Management (IIPM) in Bangalore, in an interview with Business Standard.

Major exports from India to the United States include petroleum, polished diamonds, pharmaceutical products, jewelry, frozen shrimp, and others, Joshi said, while exports from the United States to India include petroleum, rough diamonds, liquefied natural gas, gold, coal, and almonds, among others.

Indian Prime Minister Narendra Modi called his country’s relationship with the United States a “partnership of trust” during his meeting with President Joe Biden in Tokyo on May 24.

“I am confident that the friendship of India and America will continue to be a force for good for global peace and stability, for the sustainability of the planet, and for the well-being of mankind,” Modi said, according to Press Trust of India.

To further strengthen ties with India and Indo–Pacific nations, the Biden administration launched the Indo–Pacific Economic Framework for Prosperity (IPEF) on May 23.

In addition to India, other nations in the program include Japan, Australia, Brunei, Indonesia, Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Together, the countries in the program represent 40 percent of global gross domestic product.

The White House says the IPEF will allow the United States to decide rules to ensure that American small businesses, workers, and researchers can compete in the Indo–Pacific region.

Trade with the Indo–Pacific region supports 3 million American jobs and brings in $900 billion in foreign investment into the country, the White House said. U.S. foreign direct investment in the region was at $969 billion in 2020.