US BECOMES INDIA’S TOP TRADING PARTNER
Recently, the Ministry of Commerce and Industry has released the data, which showed that the US has surpassed China becoming India's top trading partner in 2021-22. Major export items from India to the US include petroleum, polished diamonds, pharmaceutical products, jewellery, frozen shrimp, whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds and so on. The data showed that China was India’s top trading partner from 2013-14 till 2017-18 and also in 202021. Before China, the UAE was the country’s largest trading partner
BILATERAL TRADE WITH THE US
Bilateral trade between the US and India stood at USD 119.42 billion (2021-2022) as against USD 80.51 billion in 2020-21. Exports to the US increased to USD 76.11 billion in 2021-22 from USD 51.62 billion in the previous fiscal year, while imports rose to USD 43.31 billion as compared to about USD 29 billion in 2020-21. America is one of the few countries with which India has a trade surplus. In 2021-22, India had a trade surplus of USD 32.8 billion with the US.
WHAT FACTORS MADE THE US LARGEST TRADING PARTNER?
India is emerging as a trusted trading partner and global firms are reducing their dependence on China for their supplies and are diversifying business into other countries like India. India has joined a US-led initiative to set up an Indo-Pacific Economic Framework (IPEF) and this move would help boost economic ties further.
INDO-PACIFIC ECONOMIC FRAMEWORK (IPEF)
Recently, India’s Prime Minister participated in an event in Tokyo to launch the Indo-Pacific Economic Framework (IPEF). This economic initiative came a day before the second in-person summit of the Quad leaders (India, the US, Australia and Japan) in Tokyo.
WHAT IS QUAD?
It is the grouping of four democracies –India, Australia, the US, and Japan. All four nations find a common ground of being democratic nations and also support the common interest of unhindered maritime trade and security. The Quad is billed as four democracies with a shared objective to ensure and support a “free, open and prosperous” Indo-Pacific region. The idea of Quad was first mooted by Japanese Prime Minister Shinzo Abe in 2007. However, the idea couldn’t move ahead with Australia pulling out of it, apparently due to Chinese pressure.
WHAT IS THE SIGNIFICANCE OF IPEF?
- It is a US-led initiative that aims to strengthen economic partnership among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region. The IPEF was launched with a dozen initial partners who together represent 40% of the world GDP.
- Opportunity for Indo-Pacific Region: It is a declaration of a collective desire to make the Indo-Pacific region an engine of global economic growth.
- An Economic Vision: The Indo-Pacific covers half the population of the world and more than 60% of the global GDP and the nations who will join this framework in the future, are signing up to work toward an economic vision that will deliver for all people.
WHAT IS INDIA'S VISION FOR THE INDO-PACIFIC REGION?
India’s trade in this region is growing rapidly, with overseas investments being directed towards the East, e.g., the Comprehensive Economic Partnership Agreements with Japan, South Korea, and Singapore, and the Free Trade Agreements with ASEAN (Association of Southeast Asian Nations) and Thailand. India has been active in championing a Free and Open Indo-Pacific. The US, Australia, and the members of the ASEAN have all expressed a common view that India plays a greater role in the region. India, along with its Quad partners, is upping its game in the Indo-Pacific. India’s view is to work with other like-minded countries in the Indo-Pacific region to cooperatively manage a rules-based multipolar regional order and prevent any single power from dominating the region or its waterways.
US ANNOUNCED INDO-PACIFIC STRATEGY
Recently, the US administration has announced its long-awaited Indo-Pacific strategy. The document focuses on building collective capacity to deal with challenges in the region. These include a focus on challenges from China, advancing the US relationship, a ‘Major Defense Partnership’ with India and supporting its role as a net security provider in the region.
WHAT ARE THE KEY POINTS OF US’ INDO-PACIFIC STRATEGY?
- Vision of Indo-Pacific: The US will seek an Indo-Pacific that is free and open, connected, prosperous, secure and resilient.
- Free: One of the strategic actions outlined is investing in civil society, a free press and democratic institutions. AUKUS, a security alliance between Australia, the UK and the US has also been recently launched.
TEST YOURSELF
Q.1 Which of the following countries has recently surpassed China to become India's Top Trading Partner?
- United States of America: ANSWER
- Saudi Arabia
- Russia
- None of the above mentioned
Q.2 The Indo-Pacific Economic Framework (IPEF), an economic initiative that came a day before the second in-person summit of the Quad leaders, is an initiative led by ________?
- India
- Australia
- United States of America: ANSWER
- Japan
Q.3 International trade and domestic trade differ because of:
- Different government policies
- Immobility of factors
- Trade restrictions
- All of the above: ANSWER
Q.4 Consider the following statements and state which of the following is/are incorrect in the reference to the above mentioned passage?
- Emergence of China as the top trading partner is due to increased import of Chinese medical supplies during the COVID-19 pandemic.
- The trade relations between India & China remain to flourish despite the ban on more than 100 Chinese apps citing national security reasons.
- There is a move from the Indian Govt. and weighing a decision to keep out Chinese companies from 5G trials & rollout.
- Only I & II follows
- Only II & III follows
- All I, II & III follows
- None of the above: ANSWER
Q.5 The policies made by the government which is related to exports and imports of the country is known by which of the following terms?
- Commercial policy: ANSWER
- Fiscal policy
- Monetary policy
- Finance policy
