India’s domestic trade has been on a tear in the last year, with global manufacturers, auto makers and retail players keen to secure export markets in India.
However, the government has yet to finalise its external trade agreements, or the finalised agreements with its largest trading partners, and the two sides are still locked in disputes over the Trans-Pacific Partnership (TPP).
The Indo-US trade relationship is also in a state of limbo, with the US Congress refusing to endorse a trade deal with India and India refusing to sign the TPP.
Despite the political hurdles, India’s exports have grown, with exports of textiles and apparel growing to $2.8bn in FY17 from $1.7bn in the previous year, according to the Ministry of Commerce and Industry (MoCIE).
The country also exports coal and other fuel and raw materials to the US, which account for nearly 20% of its trade with the country.
Indian companies are also active in other markets.
The Indo-American Investment Fund (IAIF) is investing in over 200 Indian start-ups, including online platform Ola, and Indian start up Bollywood film production company Viacom, which has signed a memorandum of understanding with the entertainment giant.
The government is also building infrastructure projects in India, with Prime Minister Narendra Modi’s vision of building a $400bn infrastructure package including highways, airports, ports and roads.
India is also a major exporter of pharmaceuticals and medical devices, with pharmaceuticals imports accounting for nearly 40% of the country’s GDP in FY18.
The country exports more than $1bn worth of pharmaceutical products to the United States each year.
India has also been an important destination for American companies seeking to invest in India because of the low cost of doing business in India and the relatively favourable corporate tax rates.
However the US has been less successful in opening up its markets to Indian companies, and India has been more reluctant to enter the US.
The International Monetary Fund (IMF) said in September that India’s economy was expected to grow at 3.2% in 2021.
However in October the IMF said India’s growth could reach 6% if current trends continue.
In September, India signed a $500m bilateral trade deal for goods with the European Union (EU), but it was not officially ratified at the time.
In February the Indian government announced that it would allow foreign direct investment in the country, but it has not yet taken the steps necessary to allow foreign investors to invest.