The two largest democracies in the world, India and the United Stated had their economies buffeted by the impact of the Covid-19 pandemic so it is no surprise that bilateral trade dipped as well. The bright spot was American FDI, Foreign Direct Investment, into India but that was driven largely by over $20 billon from Facebook, Google and a number of other companies invested into Reliance Jio, the largest mobile carrier in India as it seeks to become a retail e-ecommerce player.
But there is good news now, reported my my friend Rick Rossow at the Center of Strategic and Industrial Studies where he is the Wadhwani India Chair. Both exports and imports have already recovered to pre-pandemic levels, see chart below. With India’s economy expected to grow over 11 percent this year, we might get the highest ever bilateral trade numbers in 2021.
In the meantime bilateral services trade held relatively steady. Yes India buys a LOT of services from the United States, it is not just Raj at Amazon India answering questions about what happened to your return credit. See below
