India- U.S.A Economic Relations

Introduction

  • India is the world’s ninth largest economy but only the 18th largest export market for U.S. goods, behind Switzerland and the United Arab Emirates.
  • Successive Indian governments have signaled a commitment to a robust partnership with the United States. The growth in India-U.S. relationship in the last quarter of a century is therefore a secular trend.

India-U.S.A FDI Synopsis

Share of U.S.A in FDI Equity Inflows in India (as on December 2016)

Rank: U.S.A ranks 5th

Percentage share of total FDI inflows: 6%

Cumulative FDI Inflows from U.S.A: US$ 18.04 billions

Share of Top Sectors Attracting FDI Equity inflows from U.S.A

(from April 2000 to April 2016)

Rank Sector Amount of FDI equity inflows % age of FDI equity inflows
Rs. in crore In US$ millions From Japan
1 Services Sector* 16,906.39 3,351.53 18.58
2 Construction (Infrastructure) Activities 16,367.29 2,521.58 13.98
3 Computer Software & Hardware 10,407.82 2,058.16 11.41
4 Automobile Industry 10,912.87 1,986.22 11.01
5 Power 2,827.15 549.63 3.05
Total of Above 57,421.52 10,467.12 58.03

Note:(*) Star refers here Fin.,Banking,Insurance,Non Fin/Business,Outsourcing,R&D,Courier,Tech. Testing and Analysis, Other

  • There are several dialogue mechanisms to strengthen bilateral engagement on economic and trade issues, including a Ministerial level Economic and Financial Partnership (last met in New Delhi in February 2015) and a Ministerial Trade Policy Forum (last met in Washington in October 2015).
  • For greater involvement of private sector in discussion on issues involving trade and investment, there is a bilateral India-US CEO's Forum, which held its last round of meeting in September 2015 in Washington D.C. coinciding with the Strategic & Commercial Dialogue.
  • During Prime Minister Modi's visit in September 2014, it was decided to establish an India-US Investment initiative, with a special focus on facilitating FDI, portfolio investment, capital market development and financing of infrastructure and an US-India Infrastructure Collaboration Platform to deploy cutting edge U.S technologies to meet India’s infrastructure needs
  • The 6th annual Economic and Financial Partnership(EFP) between the U.S. Department of the Treasury and Indian Ministry of Finance met in April 2016 and worked towards deeper cooperation on policies to promote
    • Strong, sustainable growth
    • Greater investment,
    • Capital market development in India,
    • Municipal bond market development
    • Continued resolution of outstanding tax disputes
    • Increased collaboration on anti-money laundering
    • Combating the financing of terrorism

Top FDI inflows received from U.S.A (from April 2000 to April 2016):

Sl. No Name of Indian Company Name of Foreign Collaborator Item of Manufacture Amount of FDI Inflows (In US$ million)
1. SERENE SENIOR LIVING (COVAI SR CARE CONS) Signature India LLC Other specialized construction activities 2,252.38
2. FORD INDIA LIMITED FORD MOTOR COMPANY MANUFACTURE OF MOTOR CARS & OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF LESS THAN 438.11
3. ESSAR STEEL LTD ESSAR LOGIISTICS HOLDINGS LTD STEEL MFR.. 451.97
4. FORD INDIA LIMITED FORD INTERNATIONAL SERVICES LTD MANUFACTURE OF MOTOR CARS & OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF LESS THAN 237.16
5. CAIRN INDIA LTD PETRONAS INTL CORPN LTD BUSINESS SERVICES NOT ELSEWHERE CLASSIFIED 297.21
6. GMR INFRASTRUCTURE LTD 26 VARIOUS FIIS MISCELLANEOUS 256.28
7. FORD INDIA PRIVATE LIMITED RBI Ford Motor Company Manufacture of passenger cars 185.39
8. CAIRN INDIA LTD ORIENT GLOBAL TAMARIND FUND PVT LTD BUSINESS SERVICES NOT ELSEWHERE CLASSIFIED 233.36
9. ANANT RAJ INDUSTRIES LTD. DEUTSCHE BANK TRUST CO. MISCELLANEOUS 132.30
10. ADANI POWER LIMITED VARIOUS INVESTORS Electric power generation by coal based thermal power plants 86.41
11. FORD INDIA LTD FORD MOTOR COMPANY MANUFACTURE OF MOTOR CARS & OTHER MOTOR VEHICLES 111.96
12. FEDEX EXPRESS TRANSPORTATION AND SUPPLY FEDERAL EXPRESS EUROPE INC STORAGE AND WAREHOUSING SERVICES NOT ELSEWHERE CLASSIFIED (INCLUDES WAREHOUSING OF FURNITURE, AUTOMO 105.43
13. E-SERVE INTERNATIONAL LTD CITIBANK OVERSEAS INVESTMENT CORP. LESING HIRE PURCHASE 112.81
14. PTC INDIA LTD. AS PER ANNEXURE ELECTRICITY GENERATION, TRANSMISSION & DISTRIBUTION 103.22
15. REEBOK INDIA COMPANY REEBOK INTERNATIONAL LTD Wholesale of textiles, fabrics, yarn, household linen, articles of clothing, floor coverings and tapestry, 69.89
16. KOTAK MAHINDRA BANK LTD. BK OF NEWYORK BANKING ACTIVITIES INCLUDING FINANCIAL SERVICES 102.21
17. VERITAS SOFTWARE TECHNOLOGIES INDIA PVT Veritas Operating Corporation Providing software support and maintenance to the clients 64.30
18. JSW ENERGY LTD VARIOUS INVESTORS GENERATION AND TRANSMISSION OF ELECTRIC ENERGY PRODUCED IN HYDROELECTRIC POWER PLANTS 97.14
19. RELIGARE ENTERPRISES LTD INDUSTRIAL FINANCE CORPORATION OTHER FINANCIAL SERVICES N.E.C 67.41
20. CITICORP FINANCE (I) LTD   MGT CONSULTANCY/ CALL CENTRES 87.15
21. GMR INFRASTRUCTURE LTD. FII MISCELLANEOUS 88.48
22. W.S.ELECTRIC LTD SCHRODER CREDIT RENAISSANCE FUND LTD CONSTRUCTION AND MAINTENANCE NOT ELSEWHERE CLASSIFIED. 86.22
23. ANI TECHNOLOGIES PVT LTD Vanguard World Fund Other information technology and computer service activities n.e.c 50.47
24. BANDHAN FINANCIAL SERVICE PVT LTD INTERNATIONAL FINANCE CORPORATION Other financial service activities, except insurance and pension funding activities, n.e.c. 52.88
25. CORNING TECHNOLOGIES INDIA PVT LTD CORNING SINGAPORE HOLDINGS PTE LTD MARKET RESEARCH SERVICES 51.59
  5,821.71

Indian Companies investing in U.S.A

In recent years, growing Indian investments into the US, has been a novel feature of bilateral ties. At present there are more than 65 large Indian corporations investing in U.S.A. These include:

  • Reliance Industries (RIL)
  • Wipro
  • Piramal
  • Essar America
  • Tata Sons
  • Tata Consultancy Services
  • Ranbaxy Lab
  • The National Association of Software and Service Companies (Nasscom)
  • The Gems and Jewelry Export Promotion Council
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