Indo-US trade, which shot up almost three-fold from $13.7 billion in 2001 to $41.4 billion in 2007, suffered a sharp setback after the global slowdown with growth slowing down from 30.5% in 2007 to 7.4% in 2008. While initial trends show that Indian imports from the US bore the brunt of the recession, recent numbers show that Indian exports have dropped more sharply than imports indicating some resonance in domestic demand.
Numbers show that the growth of Indian exports to the US slowed down from 10.1% in 2007 to 8.4% in 2008, while that of Indian imports dropped from 74.3% to 6.1%. But most recent figures for the first two months of 2009 show that Indian exports have dropped by 23.2%, while imports declined by 18.9%.
India’s exports to the US markets are concentrated across 12 major products, which account for three of the total exports. The major Indian exports include jewellery (21.7%), non-knitted clothing and apparel (6.9%), iron and steel products (6.5%), pharmaceuticals (5.7%), non-electrical machinery and appliances (5.7%), organic chemicals (5.6%), electrical machinery (5.4%), knitted apparel and clothing (5.1%), textile made ups (4.9%), iron & steel (3.6%), vehicles (2.5%), and carpets (2.2%).
In 2008, nine of these 12 products registered positive growth with the highest increase in iron and steel (105.1%), followed by pharmaceuticals (75.7%), iron & steel (36.8%), non-electrical machinery and appliances (30.2%), organic chemicals (16.3%) and electrical machinery (12.2%), all of which posted a higher growth than average. Indian exports that declined included jewellery (9.7%), non-knitted clothing and apparel (6.2%) and carpets (8%).
In case of Indian imports from the US, bulk of the earnings came from a dozen products that accounted for 85% of the total imports into the country. Topping the list of Indian imports from the US were fertilisers, which accounted for 16% of the total Indian imports, followed by aircraft (14.7%), non-electrical machinery and appliances (13%), jewellery (11.2%), electrical machinery and equipments (6.3%), mineral fuels (5%), optical and precision equipment (4.8%), organic chemicals (3.4%), iron & steel products (3.3%), plastic articles (2.9%), chemical products (2.1%), and inorganic chemicals (2.1%).
The highest increase in Indian imports from the US markets in 2008 were from inorganic chemicals (275.5%), fertilisers (258.1%), mineral fuels (121.4%), jewellery (65.5%), aircraft (57.1%), chemical products (39.5%), plastic products (34.7%), iron and steel (13.8%), and non-electrical machinery and appliances (6.3%). Indian imports that declined in the year included aircraft (57.1%) and organic chemicals (2.8%).
But the sharp