US - India trade corridors outlook: Driving further growth

Trade and investment between India and the United States has been strong over the last few years, while data suggests that there is room for growth and more scope for cooperation, trade, and investment between the two countries. In trade and investment, the US and India are close partners on key metrics:

• The US is India’s third biggest investor. The US accounted for 9% of all foreign direct investment (FDI) equity inflows into India in 2023, making it the third largest foreign investor in the country with $4.99 billion.
• The US is India’s top overseas FDI destination. India invested $737 million in the US in FY23. Since the early 2020s, both sides have increased trade and cooperation. In FY23, bilateral trade between India and the US was $128.78 billion, up from $119.48 billion in FY22.

The full report looks in detail at the sectors noted above, as well as highlighting the key potential trade and investment opportunities between the two countries, as well as including the growth picture for the two-way flow of goods and services between the US and India.

For US corporates and investors

India’s growth trajectory – the International Monetary Fund (IMF) revised India’s GDP forecast for 2024 upwards to 7% and it expects a growth of 6.5% in 2025 – continues to offer trade and investment opportunities.

In the longer term for US corporates and investors, India is on track to grow from being the fifth largest economy today to the third largest by 2030 and its GDP per capita is set to increase from $2,300 to $5,000 by then as well.

Data from the International Trade Centre (ITC) shows a $30 billion unrealised export potential for US to India, with key sectors being jewellery & precious metal articles, motor vehicles & parts, machinery and electricity, pharmaceutical components, and chemicals.

For Indian corporates and investors

ITC data shows an estimated $55 billion unrealised export opportunity to the US, with key sectors being chemicals, machinery and electricity, precious metals, plastics & rubber, and optical products, watches & medical instruments.

Indian companies can also find opportunities to collaborate, research and invest in sectors designated as high priority by the US government: semiconductors & electronics, EVs & batteries, clean power, clean energy manufacturing & infrastructure, heavy industry, and biomanufacturing.

To find out more, please download the full report or get in touch with us today.