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India Can Leverage the Economic Collaboration with the US If It Addresses the Domestic Bottleneck

    28 April , 2021         Fdiindia

India Can Leverage the Economic Collaboration with the US If It Addresses the Domestic Bottleneck

The US in India is the critical partner. In 2019-2020, It was India’s single largest trade partner accounting for almost US$ 89 billion in two ways goods trade. It is the fifth-largest source of FDI. However, these figures reduce the importance of economic collaboration. Service Trade is an essential component of bilateral commerce, accounting for one-third of total trade. Over 2,000 US organizations have a presence in India. Some consist of influential organizations such as GE, Cisco, Microsoft, and Amazon-being crucial employers. In 2018-2019, over 200,000 Indian students studied in the US, and a number has decreased due to the Covid-19 pandemic. India offers a vast user base for US technology organizations. It is also a home for the most significant Facebook users and other technology giants, many restrained from entering the China market and observing immense potential in India. Indians found one out of seven Silicon Valley-with the impact of Indian-born entrepreneur in the US watches equally in such areas such as the biological sciences. While India’s other economic relationship with Europe, China, Japan, Southeast Asia, and the Gulf consolidate the US, for now, holds particular importance for India’s economic diplomacy.

There are also places where the US and India do not hold much value for each other. Both consumer-driven economies and net importers. Regardless of the political parties in both nations safeguarding employment for the middle class will be necessary and challenging to provide concessions on trade and manufacturing. Except for select sectors, neither is a significantly exporting powerhouse of manufactured goods and China, Germany, Japan, or South Korea. In the US scenario, this is an outcome of its economic trajectory in India’s case as a developing economy, and it is often inadequate competitiveness. It is not always the strong suit for two nations, nor is a government-subsidized institutional investment.