Advantages of future US-India Bilateral Trade Agreements

The textile and fashion industries in the USA and India, in the past encountered many challenges.

U.S. goods and services trade with India totalled an estimated $142.6 billion in 2018. Exports were $58.7 billion; imports were $83.9 billion. The U.S. goods and services trade deficit with India was $25.2 billion in 2018.

Trade in goods was $33.5 billion exports, $54.3 Billion imports, a deficit of $20.8 Billion.


According to records in 2018, India had exported 30% and imported 13% more compared to 2017. Both the US and India have started to take steps towards a bilateral trade deal.

During a meeting in India, US President Donald Trump and Narendra Modi, prime minister of India, discussed a common goal of achieving $500 billion in trade in the next 10 years.


There are distinct advantages if this trade deal comes to fruition, particularly for India.


Piyush Goyal, ministry of commerce, presented a road map, which pointed the way to reach the goal of $500 billion in ten years.

Indian Exports

The largest country for exports from India is the USA, followed closely by China.

The textile and apparel industry in India has been flat for a number of years. However, the projected growth from 2014 to 2021 is showing increases in every industry:

Some growth and opportunities in India are:

  • Abundance of raw materials
  • Presence of entire internal supply chains
  • Competitive manufacturing costs
  • Availability of skilled manpower
  • Large and growing domestic market
  • Rising per capita income, higher disposable incomes, and preferences for brands
  • Organized retail landscape with an e-Commerce potential
  • Increased focus on technical textiles


US Trade Relations

The bilateral trade between both countries has been showing growth, with the US recently bypassing China to become India’s largest trading partner.  The bilateral trade between the US and India was calculated to be $68 billion in this period, while it was valued at $65 billion with China.  Between 2013-14 and 2017-18, China was India’s largest trading partner.

The majority of textile and apparel products are imported from the USA.

The United States is also one of the few nations that have a trade surplus with India, $16.85 billion in 2018-19. Similar numbers occurred in 2019.

Trade Deals

In the past trade deals with India have not favoured exporters. Some of the problems were: lack of competency, focus on trade agreements with developing countries, which have skilled labour and lower wage costs. A bilateral trade agreement with the US can open the scope of expansion of business, while providing Indian industries the means to export their products to one of the world’s largest economies. This can benefit the textile and apparel industries the more than other businesses.

The globalization and the framework of WTO (World Trade Organization) have increasingly been integrated through different mechanisms such as RTA (Regional Trade Agreements), FTA (Free Trade Agreements) & Multilateral Trade Agreements. This integration has brought about intense competition among textile exporting countries in order to enhance their market share in global trade.


India’s Trade with Other Countries

World trade has witnessed a rapid shift in the past two or three because of globalization.  Geopolitics also has a big role in such circumstances. Improved trade deals with the US should open doors for India to have better ties with the European Union and the UK.  If the deal takes place, Indian textile manufacturers have the opportunity to capture many other markets in the world.


The recent visit of US President Donald Trump heightens the possibilities of a positive trade deal between the two nations.   We will have to wait and see how far the talks between the two leaders proceeds.

Indian political leaders seem optimistic about the outcome.  This deal will open various opportunities for Indian manufacturers in the textile and apparel sector.

This trade deal could also enhance India’s chances of reaching its $5 trillion economy dream.

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About the Author: Jeffrey Clark

A management professional with 25 years of global experience working with fortune 500 and specialty brands, specializing in lean manufacturing, product, supply chain management, procurement, sourcing, and operations. Proven proactive leadership, vision, creativity, and successful strategic business skills to drive revenue and profit growth in highly competitive domestic and global markets. A strong relationship builder functions effectively as an integral member of a cohesive senior executive team. Proven ability to source, identify and capitalize on emerging trends and niche market opportunities.