India's Imports & Exports Stall in 2008

Indian Demand for US Coal, Fertilizers & Diamonds Rises

© Daniel Workman

Mar 19, 2009

With a population of 1.2 billion people, India has traditionally focused more on growing local and regional businesses rather than on the global trade marketplace. India’s global trade ratio, the value of a country’s overall world trade divided by its Gross Domestic Product (GDP), is about 13% compared with 30% for China.

Slowly but surely, India is emerging as potential major trade partner with the United States. India grew its annual exports to America by 7% to US$25.8 billion in 2008. That amount represents a 65.4% gain since 2004.

India’s imports from America rose 6.1% to $18.7 billion in 2008, a 205.5% increase from the 2004 amount.

Overall, the U.S. experienced a $7.1-billion deficit in its trade with India last year. America’s shortfall in 2008 represents a 9.4% expansion in its $6.5-billion trade deficit with India in 2007. However, that amount is 25% less than the $9.5-billion deficit in 2004.

India’s Top Imports from America

Below are the top ten goods imported from the USA into India for 2008. Chemical fertilizers target demand in India’s large agricultural sector, while telecommunications equipment enables India to grow its technological infrastructure.

1. Chemical fertilizers … US$3.1 billion, up 273.8% from 2007 (16.4% of US-source imports)
2. Civilian aircraft … $2.5 billion, down 57.7% (13.2%)
3. Gem diamonds … $1.7 billion, up 66.2% (9.3%)
4. Telecommunications equipment … $652.1 million, up 8.2% (3.5%)
5. Other petroleum products … $580.9 million, up 58.4% (3.1%)
6. Non-monetary gold … $500.5 million, up 31.1% (2.7%)
7. Organic chemicals … $487.7 million, up 0.5% (2.6%)
8. Other industrial machines … $443.2 million, up 28.3% (2.4%)
9. Other chemicals … $411.3 million, up 45.1% (2.2%)
10. Steelmaking materials … $372.4 million, up 6.7% (2%).

Fastest-Growing Indian Imports from America

The following are 10 of the fastest-growing U.S. exports into India last year. Only goods valued at $100 million or more were selected for this list.

1. Coal … US$345.5 million, up 281.6% from 2007
2. Chemical fertilizers … $3.1 billion, up 273.8%
3. Newsprint … $168.5 million, up 159%
4. Materials handling equipment … $135 million, up 110.8%
5. Gem diamonds … $1.7 billion, up 66.2%
6. Finished metal shapes … 131.3 million, up 58.6%
7. Other petroleum products … $580.9 million, up 58.4%
8. Other chemicals … $411.3 million, up 45.1%
9. Other iron & steel products … $149.3 million, up 44%
10. Inorganic chemicals … $127.2 million, up 39.9%.

India’s Top Exports to America

The top 10 commodities that the U.S. imports from India include diamonds, a trade industry where India is a world-leader. Other Indian exports like rugs are labor-intensive, a global competitive requirement to which India’s large workforce can easily adapt.

1. Uncut or unset diamonds … US$3.9 billion, up 5.3% from 2007 (15.1% of US-source imports)
2. Cotton household furnishings & clothing … $3.7 billion, up 0.3% (14.4%)
3. Medicinal, dental & pharmaceutical preparations … $2 billion, up 43.5% (7.9%)
4. Jewelry … $1.5 billion, down 34.7% (5.9%)
5. Drilling & oilfield equipment … $890.2 million, up 62.4% (3.5%)
6. Semi-finished iron & steel mill products … $694.9 million, up 89% (2.7%)
7. Industrial organic chemicals … $670.5 million, up 34.8% (2.6%)
8. Tobacco, waxes & non-food oils … $602.2 million, up 46.4% (2.3%)
9. Other industrial machinery … $597.4 million, up 18.3% (2.3%)
10. Rugs & other textile floor coverings … $568.3 million, down 7.9% (2.2%).

Fastest-Growing Indian Exports to America

Leading growth exports into the U.S. from India vary widely, suggesting that the trade relationship between the two countries has yet to mature based on their respective competitive strengths.

1. Unmanufactured steelmaking materials … US$158.1 million, up 1,226% from 2007
2. Industrial inorganic chemicals … $119.5 million, up 214.1%
3. Video equipment (e.g. DVD players) … $254 million, up 128.5%
4. Semi-finished iron & steel mill products … $694.9 million, up 89%
5. Fertilizers, insecticides & pesticides … $168 million, up 71.5%
6. Soft beverages, processed coffee … $110.8 million, up 67.6%
7. Drilling & oilfield equipment … $890.2 million, up 62.4%
8. Feedstuff & food grains … $131.5 million, up 59.7%
9. Tobacco, waxes & non-food oils … $602.2 million, up 46.4%
10. Medicinal, dental & pharmaceutical preparations … $2 billion, up 43.5%.

Sources

This analysis is based on latest statistics from the US Census Bureau - Foreign Trade Statistics as of the date of article publication.

Rupees, currency of India

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