Opinion: No major threat to Indian exports to US
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Subscribe to enjoy similar stories. Donald Trump will be the next US President. The Indian stock market jumped as presumably Trump’s pro-business outlook augurs well for inflows into the Indian stock market.
However, this one-time jump is likely to be reversed soon due to profit-taking, but there is no doubt that there are no long-term uncertainties in the US market and, hence, less uncertainties in portfolio flows into the Indian stock market. What does a Trump admin look like as far as trade and FDI is concerned? Here, there are a number of factors at play. But first it is necessary to look at India’s trade and FDI trajectory from the US point of view.
It is known that the US is India’s second-largest trade partner with total trade in goods and services of about $200 billion, and here service exports play a major part. In addition, the US is one of the few countries with which India has a trade surplus. The major items (in the order of importance) are jewellery, pharma products including medical hardware, machinery and equipment.
Smaller items are textiles and garments, etc. What about FDI? US is the principal source of FDI with inflows of about $6 billion in 2023. This is actually an understatement as almost all the FDI coming in from Mauritius and Singapore (about 70% of the total FDI inflows) are linked to US-related companies.
In short, India is quite heavily invested in the US economy. How is this likely to change and what are future prospects for India with a Trump administration? Consider the Trump hyperbole about high tariffs restricting US exports to India. In September last year, US trade representative Katherine Tai announced that India and the US had agreed to resolve their last outstanding dispute at the
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