The United States continues to be a crucial destination for Indian exports, with textiles and ready-made garments playing a significant role in this trade relationship. A recent Bank of Baroda report highlights the consistent growth of Indian exports to the US, reaching $77.5 billion in the financial year 2024. This represents 18% of India’s total exports, underscoring the importance of the US market.
While the overall export figures are noteworthy, a closer look at the composition reveals the enduring significance of the textile sector. Readymade garments feature prominently among the top five export categories to the US in FY24, alongside pharmaceuticals, precious stones, petrochemicals, and telecom equipment. These five categories collectively account for 40% of India’s total exports, demonstrating the substantial contribution of textiles to the overall trade volume.
This robust trade relationship has a long history, with Indian exports to the US growing at a compound annual growth rate (CAGR) of 10.3% over the past three decades. While the US share of India’s total exports peaked at 22.8% in FY2000, the current 18% in FY24, compared to 16.4% in FY92, still signifies a strong and enduring connection. The report notes fluctuations in growth, with periods of higher growth compared to overall exports, interspersed with a slowdown following the 2008 financial crisis. However, since FY10, exports to the US have once again outpaced overall export growth, reinforcing the US market’s importance.
For the Indian textile industry, the US market provides a vital outlet for its production, particularly in the ready-made garment sector. This stable demand allows for continued growth and investment within the industry. However, the report also advises caution against over-reliance on a single market. Diversification of export destinations is crucial for long-term stability and resilience against potential economic fluctuations in any one region.
In conclusion, the US market remains a significant thread in the fabric of India’s export economy, with textiles and ready-made garments playing a key role. While the current trade relationship is strong, the report’s recommendation for export diversification provides valuable guidance for the future growth and stability of the Indian textile industry.
