India and the United States have developed strong business relations with each other over the years. For instance, the United States is the largest source of foreign direct investment for India. Additionally, the United States is also India’s second largest trade partner (imports and exports). Not only that, the United States is the largest services export destination for India. In fact, American companies in India form the major part of the foreign companies operating in this country.
India has already marked its presence as one of the fastest growing economies of the world. It has been ranked among the top 10 most favored countries for FDI inflow. India now ranks 130 out of 189 countries in the ease of doing business.
There are 55 U.S. companies in India that are operating successfully. As the United States and India share a strong and growing commercial and economic relationship, entrepreneurs and businesses in both countries have joined together in various sectors such as infrastructure, smart cities collaboration and transportation. Furthermore, the two countries have forged commercial, trade, and investment partnerships.
These are the key points which have currently made India among the top 10 largest goods trading partner with the United States in 2015. The U.S. goods trade deficit with India reached $23 billion in 2015.
Trade in private services with India (exports and imports) totaled $60 billion in 2015 (latest data available). Services exports were $ 40 billion; Services imports were $ 28 billion. The U.S. services trade deficit with India was $12 billion in 2015.
The US-India Business Council has already invested $28 billion in India since September 2014 and expects to invest another $45 billion until 2017, according to John Chambers, chairman of the US-India Business Council.
Prime Minister Narendra Modi anticipates that India will rank as one of best places in the world for doing business. During his visit to the United States earlier this year, Prime Minister Modi highlighted the ease of doing business in India, as well as some of the challenges that India still faces such as complicated procedures that make entering the India market more difficult. Nevertheless, India has implemented a number of reforms to make doing business in this fast growing market much easier.
These changes and their specific outcomes will be highlighted in the Global Research Institute’s upcoming Trade Policy Brief series on doing business in India.
Malcolm Stebeiro is a researcher and advisor for the Global Research Institute of International Trade (GRIIT). He is based in India.