BackPM’s visit to US comes with rapid trade growth
PM’s visit to US comes with rapid trade growth
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New Delhi: Prime Minister Manmohan Singh arrives in Washington on Monday for a state visit set to boost the burgeoning economic relationship between two countries, which had relatively marginal commercial dealings a decade ago.
Following are key aspects of economic ties that took off with the end of the cold war and the embrace of economic reforms by India — an adoption of market-friendly policies in which Singh played a prominent role earlier in his career:
Bilateral Trade: Two-way trade, just $5 billion in 1990, reached $14 billion in 2000 and rose to nearly $50 billion last year, according to US figures, making US India’s largest trading partner. The US sells India aircraft and parts, advanced machinery, cotton, fertilizers, and computer hardware. It imports Indian textiles and leather goods, Internet services, agricultural products, gems, leather products, and chemicals. India reckons trade has at least doubled in the past five years, while US exports to India have tripled in that period.
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Investment: US cumulative direct investments through mid-2008 of nearly $16 billion in power and oil refineries, telecommunications, electronics, food processing and services make the US one of India’s largest investors, according to US statistics.
Information Technology: India says two in five of America’s Fortune 500 companies outsource their software in India. With India’s growing wealth, the telecom sector has grown about 20% a year in recent years. India has courted investment in the sector, projecting that it needs some $84 billion worth of telecom equipments to hit its target of 650 million subscribers by 2012. The US hi-tech regions of the Silicon Valley in California and Route 128 Corridor in Massachusetts have deep ties with their Indian counterparts, Bangalore and Hyderabad.
Nuclear Power: The 2005 US-India Civil Nuclear Agreement, which eases strictures on US nuclear exports to India, opens India’s potential $150 billion market in power plants. This offers potential for big deals for US nuclear reactor builders such as General Electric Co and Westinghouse Electric Co, a subsidiary of Japan’s Toshiba Corp.
Arms Sales: India’s embassy says US arms sales to India have risen from almost nothing a few years to about $3.5 billion last year. The US is competing with Europe and Russia to supply India 126 multi-role fighter aircraft worth up to $10.4 billion, the biggest such market in decades. In March, the Obama administration approved a $2.1 billion sale to India of eight Boeing Co P-8I maritime patrol aircraft, the largest US arms transfer to India to date. In January 2008, Washington and New Delhi clinched India’s previous largest US arms purchase — six Lockheed Martin Corp C-130J Super Hercules military transport planes valued at about $1 billion, including related gear, training and spares.
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