Mumbai: As President Trump met Prime Minister Narendra Modi the centre of the talk were diamonds.
In 2016, for the first time, the United States did more diamond trade with India than any country in the world, topping Israel, which had been atop the list for more than two decades.
One thing is clear: India is becoming an increasingly important U.S. trade partner. And it's not just diamonds.
Over the last two decades, U.S. trade with India has grown more rapidly than with all but two other major nations, up 612.64%. By way of comparison, U.S. trade with the world is up 156.19% over that same time period.
Consequently, India has advanced from being the United States' 27th most important trade partner in 1996, with total trade just under $9.5 billion, to the ninth most important, with 2016 trade at $67.68 billion.
Importantly for some, including many in the key trade-related positions in the Trump administration, India also ranks No. 3 among fastest-growing U.S. markets for its exports. Nevertheless, the United States also has a large trade deficit with India.
Taking a closer look at Us exports to India, the top outbound shipment is diamonds. On the other side of the ledger, it is the same: The top import from India is diamonds. Combined, the two account for almost 20 % of the value of the trading relationship.
On the import side, in addition to diamonds, leading imports include medicine in dosage form, gasoline, jewellery, linens, shrimp and other crustaceans, motor vehicle parts, and a host of apparel items. While the value of diamonds has increased $2.36 billion over just the last five years, the value of medicine is up $4.12 billion. Nothing else comes close.
With regard to diamond trade, as recently as 2012, Israel accounted for more than 40% of all imports into the United States. Since then, Israel's share of those imports has decreased while India's has increased -- from 26.69% to 36.07%. Israel's total fell below 30% for the first time.
On the export side, the story line is similar. In 2012, Israel accounted for 31.29% of all U.S. exports while India accounted for 15.28%. Four years later, in 2016, Israel still ranks ahead of India but the percentages are 25.52% and 24.69%, respectively.
India's total diamond exports and imports eclipsed those of Israel because the value of the imports is slightly larger than those of exports. The total value of U.S.-India diamond trade in 2016 was $13.44 billion while the value with Israel was $12,05 billion.
