According to the Bank of Baroda, India's exports to the US have grown at a compound annual growth rate (CAGR) of 10.3% over the previous 30 years, reaching USD 77.5 billion in FY24. It's interesting to note that up to FY00, India's export growth to the US exceeded that of all exports. But up until FY10, growth slowed due to the global financial crisis of 2008. India's export growth to the US has continuously outpaced overall export growth since FY10, underscoring the growing importance of the US market for Indian exports.
According to the notes, since 1991, when India's economic reforms were first implemented, the country's exports to the US have followed the general export growth trend. The United States now makes up 18% of India's total exports as of FY24, up from 16.4% in FY92 but still less than the peak of 22.8% in FY00. The United States' proportion of India's exports fell to 10.1% in FY11 during the financial crisis, but it has since gradually increased in the following years.
In light of shifting global political dynamics, the research highlights the necessity for India to diversify its export markets and reduce dependence on a single destination.
Despite this, some important Indian sectors still rely on the US market. Drugs and medicines, pearls and precious stones, petroleum products, telecom equipment, and ready-made clothing were the top five export commodities to the US in FY24, accounting for 40% of India's total exports to the US. Yarn, marine products, and computer items are among the other major exports to the US, though other Asian nations fiercely compete with them.
With more than 30% of their revenue attributed to US demand, industries like pharmaceuticals and medications, pearls and precious stones, telecom equipment, and ready-made clothing are especially reliant on the US market. On the other hand, despite their relatively low total export value, industries such as carpets, electronics, yarn products, and marine products show a significant share of exports to the US.
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