7 Benefits of Importing from India to the USA

If you are looking for a reliable and cost-effective source of goods for your business, you might want to consider importing from India to the USA. India is one of the fastest-growing economies in the world, and it offers a wide range of products and services that can meet the needs and preferences of American consumers. Here are some of the benefits of importing from India to the USA:

1. Lower production costs

India has a large and skilled workforce that can produce high-quality goods at lower costs than many other countries. According to the World Bank, the average hourly labor cost in India was $3.4 in 2019, compared to $36.6 in the USA. This means that you can save money on labor and overhead expenses by sourcing your products from India.

2. Diversified product range

India has a rich and diverse culture that influences its products and services. You can find a variety of goods in different categories, such as textiles, leather, jewelry, handicrafts, spices, pharmaceuticals, software, and more. You can also customize your products according to your specifications and requirements, as many Indian suppliers are flexible and willing to accommodate your needs.

3. Favorable trade agreements

India has a preferential trade agreement with the USA under the Generalized System of Preferences (GSP) program, which allows duty-free or reduced-duty access for certain products from developing countries. This means that you can save money on import taxes and fees when importing from India to the USA. You can check the eligibility of your products on the U.S. Customs and Border Protection website.

4. Easy communication

English is widely spoken in India, especially among the business community. This makes it easier for you to communicate with your Indian suppliers and negotiate terms and conditions. You can also avoid language barriers and misunderstandings that might arise when dealing with other countries.

5. Fast delivery

Importing from India to the USA by air freight is the fastest way to get your goods delivered to your destination. It usually takes between 3 to 10 days, depending on the origin and destination airports, customs clearance, and other factors. You can also choose sea freight if you have a large volume of goods or if you are not in a hurry. Sea freight usually takes between 30 to 50 days, but it is cheaper than air freight.

6. Growing market potential

India is one of the largest and fastest-growing markets in the world, with a population of over 1.3 billion people and a GDP of over $2.9 trillion in 2019. The country has a huge middle class that is increasing its purchasing power and demand for quality products and services. By importing from India to the USA, you can tap into this huge market potential and expand your customer base.

7. Strong bilateral relations

India and the USA have a strong and strategic partnership that covers various areas of cooperation, such as trade, investment, defense, security, energy, education, science, technology, and more. The two countries share common values and interests and work together to address global challenges and opportunities. By importing from India to the USA, you can benefit from this positive relationship and enjoy mutual support and trust.

The Rise of Imports from India to the USA

India is one of the largest and fastest-growing economies in the world, and its trade with the United States has been expanding rapidly in recent years. According to the United Nations COMTRADE database, the value of U.S. imports from India reached $90.99 billion in 2022, up from $57.7 billion in 2019 . India is currently the 10th largest supplier of goods imports to the U.S., and the 12th largest market for U.S. goods exports . In this article, we will explore some of the trends and factors that are driving the growth of imports from India to the U.S., and what opportunities and challenges they present for both countries.

The Top Categories of Imports from India to the USA

The U.S. imports a wide range of products from India, but some categories stand out more than others. According to the U.S. Trade Representative, the top import categories (2-digit HS) in 2019 were: precious metal and stone (diamonds) ($11 billion), pharmaceuticals ($7.6 billion), machinery ($3.7 billion), mineral fuels ($3.6 billion), and organic chemicals ($2.8 billion) . These five categories accounted for more than half of the total value of U.S. imports from India in 2019.

Among these categories, pharmaceuticals and mineral fuels have seen the most significant growth in recent years, reflecting India’s strengths in these sectors. India is one of the world’s leading producers and exporters of generic drugs, which are cheaper alternatives to branded medicines. The U.S. is the largest market for Indian pharmaceuticals, accounting for about 30% of India’s total exports of drugs and pharmaceuticals in 2020 . The demand for Indian pharmaceuticals has increased due to the rising health care costs and aging population in the U.S., as well as the COVID-19 pandemic, which has boosted the need for essential medicines and vaccines.

India is also a major source of energy for the U.S., especially in terms of liquefied natural gas (LNG). India is one of the world’s largest importers of LNG, and it has been diversifying its sources of supply to reduce its dependence on Middle Eastern countries. The U.S. is one of India’s key suppliers of LNG, along with Qatar, Australia, and Russia. The U.S.-India LNG trade has grown significantly since 2018, when India started importing LNG from the U.S. under long-term contracts . The U.S.-India energy partnership has been strengthened by their shared interests in ensuring energy security and promoting clean energy transition.

The Benefits and Challenges of Imports from India to the USA

The increasing trade between India and the U.S. has brought many benefits for both countries, such as creating jobs, enhancing competitiveness, fostering innovation, and strengthening strategic ties. According to the Department of Commerce, U.S. exports of goods and services to India supported an estimated 197 thousand jobs in 2015 (latest data available) . Similarly, Indian companies have invested billions of dollars in the U.S., creating thousands of jobs across various sectors . Moreover, both countries have collaborated on various initiatives to promote trade facilitation, intellectual property rights protection, digital economy development, and regional connectivity .

However, there are also some challenges and barriers that hinder the full potential of trade between India and the U.S. Some of these include tariff and non-tariff barriers, trade disputes, regulatory uncertainties, market access issues, and geopolitical tensions . For instance, in 2019, the U.S. removed India from its Generalized System of Preferences (GSP) program, which granted preferential tariff treatment to certain products from developing countries . In response, India imposed retaliatory tariffs on some U.S. products, such as almonds, apples, and steel . Both countries have also engaged in several disputes at the World Trade Organization (WTO) over issues such as agricultural subsidies, solar panels, steel products, and digital services taxes .

The Future Outlook of Imports from India to the USA

Despite these challenges, there are also many opportunities and prospects for enhancing trade between India and the U.S. in the future. Both countries have expressed their interest and commitment to resolve their trade differences and negotiate a comprehensive trade agreement that would cover various sectors and issues . Both countries have also recognized the importance of cooperating on global challenges such as climate change, health security, counter-terrorism, and regional stability . Furthermore, both countries have enormous potential to expand their trade in emerging areas such as e-commerce, digital services, clean energy, biotechnology, and space exploration .

In conclusion, imports from India to the U.S. have grown significantly in recent years, reflecting India’s economic dynamism and competitiveness. The U.S. imports a variety of products from India, especially in the categories of precious metals and stones, pharmaceuticals, machinery, mineral fuels, and organic chemicals. The trade between India and the U.S. has brought many benefits for both countries, such as creating jobs, enhancing competitiveness, fostering innovation, and strengthening strategic ties. However, there are also some challenges and barriers that need to be addressed, such as tariff and non-tariff barriers, trade disputes, regulatory uncertainties, market access issues, and geopolitical tensions. Both countries have expressed their interest and commitment to resolve their trade differences and negotiate a comprehensive trade agreement that would cover various sectors and issues. Both countries have also recognized the importance of cooperating on global challenges such as climate change, health security, counter-terrorism, and regional stability. Furthermore, both countries have enormous potential to expand their trade in emerging areas such as e-commerce, digital services, clean energy, biotechnology, and space exploration.

References:

http://hdr.undp.org/sites/default/files/2018_human_development_report.pdf

http://www.eximatlasindia.com/

https://tradingeconomics.com/united-states/imports/india
https://ustr.gov/countries-regions/south-central-asia/india
https://www.ibef.org/exports/pharmaceutical-industry-india.aspx
https://www.eia.gov/todayinenergy/detail.php?id=46216
https://www.cii.in/USIndiaBusiness.aspx
https://www.state.gov/u-s-relations-with-india/
https://www.cfr.org/backgrounder/us-india-trade-relations
https://www.bbc.com/news/world-asia-india-48442934