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US Exporters Could Increase Trade with India By USD5.7 Billion

on 23 Oct 2020

Standard Chartered research reveals new trade opportunities between the US and India as a possible route to post COVID-19 growth

NEW YORK, October 21, 2020 – US businesses could increase exports to India by up to USD5.7 billion annually, the Standard Chartered Trade Opportunity Report has revealed. The study also found that Indian exporters could boost trade with the US by an estimated USD818 million, bringing the bilateral trade opportunity to USD6.5 billion.

The research tracks high-potential exports, defined as goods or services to which businesses have added value within the borders of their home market. As markets look to recover from the impact of COVID-19, the study champions global trade as a key lever of prosperity, highlighting the sectors with the greatest opportunities for growth.

The US financial services sector has the most to gain, with a USD3.5 billion trade opportunity, or an increase of 56 per cent from actual exports. India is predicted to be the fourth-largest private wealth market globally by 2028, with banking and insurance the most prominent sectors, presenting US exporters with avenues for growth.

To extend the reach of these services, the Government of India is introducing measures to facilitate access for small and medium-sized businesses, and access to insurance services is also increasing in rural areas.

The other US sectors with significant opportunities in India are office admin and business support services (USD870 million), IT services (USD452 million), cotton, including sewing thread, yarn and fabric (USD186 million), and vehicles, vehicle parts and accessories (USD122 million).

Top 5 high-potential export opportunities from the US to India:

SectorActual exports (USD millions)Opportunity to increase exports (USD millions)
Financial services6,2153,467
Office admin and other business support services7,457870
IT services1,043452
Cotton (including sewing thread, yarn and fabric)336186
Vehicles, vehicle parts and accessories363122

Jeremy Amias, Vice Chairman, Americas said:  “Trade between the US and India – the largest partnership in our study – has grown steadily since the mid-1990s. With its large consumer market, increasingly digitally-savvy population and developing infrastructure, India is a market that deserves strong consideration for US companies seeking international growth. This report reiterates how India is extremely important for US exporters — in particular, US Financial Services and US Technology services companies as the country is likely to be one of the main beneficiaries of supply chain diversification in the wake of COVID-19 disruption.”

 “With its large consumer market, India is extremely important for US exporters and an obvious choice as companies diversify their supply chains. In particular, US financial services companies should take heed of the export opportunity revealed by the study. As business leaders navigate an uncertain global trading environment, this study will help them to focus their growth strategies and reach new markets.”

The Standard Chartered Trade Opportunity Report identifies opportunities at a sectoral level, across both goods and services, between India and 10 of its key trading partners. The study contrasts actual export values with potential export values – calculated by an economic model – to uncover medium-term opportunities, looking to a post-COVID-19 world as economies begin to reopen.

Overall, the study reveals opportunities totalling an estimated USD38 billion annually: a USD21 billion opportunity for the 12 markets to increase exports to India, and a USD17 billion opportunity for India to increase exports in the other direction.

To download The Standard Chartered Trade Opportunity Report and find out more about the potential export opportunities between India and 10 key trading partners, including the US, visit: https://www.sc.com/tradeopportunityreport

NOTES TO EDITORS:

About the study

The Standard Chartered Trade Opportunity Report reveals the size of the export opportunities between India and 10 of its most economically diverse trading partners: Indonesia, Malaysia, Singapore, South Korea, Thailand, Vietnam, France, Germany, the UK and the US. Export opportunities are calculated by subtracting potential exports from actual exports. Potential exports are calculated using a gravity trade model, which takes into account GDP, geographic distance, and other relevant variables. Actual export figures are drawn from the IMF’s Direction of Trade Statistics (for goods) and the OECD’s Trade in Value Added database (for services). Both are time-averaged for 2016-2018. The study excludes commodity or commodity-like sectors, focusing on ‘high potential’ exports only (i.e. sectors where there is a meaningful opportunity to add value). These high-potential sectors play a critical role in export performance, collectively representing 82 per cent of total trade on these routes.

About Standard Chartered

We are a leading international banking group, with a presence in 60 of the world’s most dynamic markets and serving clients in a further 85. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, Here for good.

Our history in the US dates back to 1902, and we are currently present in eight locations throughout the Americas. Our Americas franchise focuses on financial institutions and select corporates and plays a key role in facilitating trade and investment flows between the Americas and Asia, Africa, and the Middle East.

Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges.

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