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Driven by liberalization in the past two decades and the start of a march toward a functioning market economy, India’s report card has been exciting both in terms of growth and stability. India became the fastest growing economy in the world by clocking a growth rate of 8.2 percent in the GDP for the year ended March31, 2004. The economy grew on the back of a robust growth in all the sectors – Agriculture, Manufacturing and Services.

India outperformed the IMF’s predictions about its growth. The September 2004 World Economic Outlook report had projected a likely growth of 6.5 per cent whereas India scored 6.7 per cent. In its April 2005 report, the IMF says India’s growth figures will continue to remain robust in 2005-06 as the impact of uneven monsoons and higher oil prices is being offset by buoyant industrial activity and strong investment.

A Goldman Sachs report ('Dreaming with BRICs: The Path to 2050') states that among Brazil, Russia, India and China, India will grow the fastest over the next 30 to 50 years by leveraging its demographic advantages and through continued development. A new breed of entrepreneurs supported by newly developed Agri Export Zones is helping India become the food basket to the world. India is fast establishing itself as a global manufacturing hub.

India has grown into a global manufacturing hub. World corporations are leveraging India's proven skills in product design, reconfiguration and customization with creativity, assured quality and value addition. Contributing close to a fourth of the GDP, India's manufacturing sector has a diversified base of world class capabilities using state of the art technology. The services sector currently accounts for almost half of India's GDP. Global investment banks, brokerages and accounting firms have set up large research establishments in India.

Indian Multinationals are on a global shopping spree for companies. Between 2001 and 2003, 120 foreign firms worth USD 1.6 billion were acquired by India companies. India is likely to emerge as one of the largest consumer markets in the world. On an average 30-40 million join the consuming class every year. Political empowerment and economic trickle down have now fuelled ambitions and aspirations in more Indians than in any other period of history. Indian consumption patterns are converging into global norms and the Indian consumer is spending more on consumer durables, apparel, entertainment, vacations and lifestyle-related activities.

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Indo-US Trade Relations

Trade and commerce have always played a significant part in the rapidly expanding multi-faceted bilateral relations between India and US. New Indian business houses are opening shop in the US or vice versa.

The two way bilateral trade in merchandise goods and commodities has increased from USD 5.6 billion in 1990 to US$21.6 billion in 2004 in a span of 14 years. It grew by 20 per cent in 2004 (as against 13 per cent in 2003) to reach a new high of USD21.65 billion in calendar 2004.

India's merchandise exports to the US grew by 19.2 per cent from USD13.05 billion in 2003 to USD15.56 billion in 2004. This is the second highest growth rate amongst the top 20 non-oil exporting countries to the US. American exports to India exhibited an even higher rate of growth at 22.4 per cent, totaling US$6.1 billion. This is the second year in succession when US exports recorded a 20 per cent plus growth (21.6 per cent in 2003). India continued to remain the 24th largest export destination for the United States accounting for 0.75 per cent of the US' total exports.