India was the 15th biggest export market for U.S. goods in 2017. The United States is India’s largest trading partner, with exports of American goods and services to India reaching $42.0 billion (up 5.8% from 2015), and imports from India hitting $72.9 billion (up 4.8% from 2015). The United States also remained India’s top export market – and its $31 billion trade surplus with the U.S. is its largest with any country
Top U.S. export categories to India in 2016 were: precious metal and stones ($7.0 billion), machinery ($2.0 billion), agricultural and related products ($1.5 billion), optical and medical instruments ($1.3 billion), mineral fuels ($1.2 billion), and electrical machinery ($1.2 billion).
U.S. foreign direct investment (FDI) stock in India was $28.3 billion in 2015 (latest data available), a 4.4% increase from 2014. U.S. FDI in India was led by professional, scientific, and technology services, manufacturing, and wholesale trade investments. India's FDI stock in the United States was $9.3 billion in 2015, up 3.7% from 2014. India's direct investment in the U.S. is also led by professional, scientific, and technology services, but also depository institutions, and manufacturing. Most major U.S. companies are active in the market, including fast growing U.S. franchisors that are responding to changing consumer tastes and a rapidly expanding middle class - particularly in tier 1 and tier 2 cities. India is the fourth fastest growing source of FDI into the United States agenda.
As of 2016 100% FDI is now permitted in civil aviation and e-commerce, among others, and requirements have been modified to allow for up to 100% FDI in the defense sector in special cases. The government has also relaxed local sourcing requirements for single-brand retailers of high technology products. Other measures have been taken by the Central and State Governments to facilitate manufacturing, improve the business environment, and promote the development of industrial corridors across India.
Given India’s decentralized political system, US companies doing business in India should be prepared to encounter varied political and economic conditions across India’s twenty-nine states and seven union territories. There are differences at the state level in the quality of governance, regulation, taxation, labor relations, and education levels. The country ranks 130 out of 189 in the World Bank’s Ease of Doing Business Report.
Opportunities in the current scenario are still abundant. Indian conglomerates and high technology companies are generally equal in sophistication and prominence to their international counterparts. Certain industrial sectors, such as information technology, telecommunications, pharmaceuticals, textiles and engineering are globally recognized for their innovation and competitiveness. Foreign companies operating in India emphasize that success requires a long-term planning horizon and a state-by-state strategy to adapt to the complexity and diversity of India’s markets.
MISC INVESTMENT FACTS
U.S. foreign direct investment (FDI) in India (stock) was $44.5 billion in 2017, a 15.1% increase from 2016. U.S. direct investment in India is led by professional, scientific, and technical services, manufacturing, and wholesale trade.
India's FDI in the United States (stock) was $9.8 billion in 2017, up 11.5% from 2016. India's direct investment in the U.S. is led by professional, scientific, and technical services, manufacturing, and depository institutions.
Sales of services in India by majority U.S.-owned affiliates were $24.5 billion in 2015 (latest data available), while sales of services in the United States by majority India-owned firms were $14.7 billion.