New Delhi: India will have no difficulty in purchasing goods worth USD 500 billion from the US over the next five years, as envisaged under the bilateral trade pact, and in fact, this is an “extremely” conservative number for a country which aspires to become a USD 30 trillion economy, Commerce Minister Piyush Goyal said on Sunday.
“My sense is we need at least a 100 billion dollar plus only for the aviation sector, in addition to oil, LNG, LPG, and crude oil,” Goyal said in an interview with PTI Videos.
According to a joint statement issued by both sides on Saturday on the framework for the first phase of the bilateral trade agreement, India has expressed its intention to purchase USD 500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.
The Commerce and Industry Minister said that Indian goods facing 18 per cent tariffs will still have a competitive advantage in US markets compared to products from China and other competitor countries, which face higher levies. China has been slapped with 35 per cent tariffs, and other countries in Asia face 19 per cent and up.
At present, he said, India could source imports worth about USD 300 billion from the US that it currently buys from other countries.
“We are even today importing 300 billion dollars of goods that can be imported from the US. We are importing from all over the world,” he said.
Goyal said that as the country’s economy is growing at a faster pace, demand for a variety of goods ranging from semiconductor chips, high-end machinery and data centre equipment to aircraft, aircraft parts and energy goods is also increasing.
He said at present, India is importing goods worth about USD 40-50 billion from the US every year.
Citing examples where purchases from the US can be enhanced, he said big tech firms have announced large investments in India and, therefore, “my sense is that we will see 10 gigawatts of data centres” in the country, and for that India will need equipment, which the US can supply.
“We are going to need aircraft. We are going to need engines for aircraft. We are going to need spare parts. We already have USD 50 billion worth of orders on Boeing alone for aircraft. We have orders for engines,” he added.
“So, almost 80-90 billion (dollars) is already on order for the next five years. We will actually need more than that. I read the other day that Tata plans to place some more orders,” Goyal said.
Further, the country requires cooking coal for the steel industries. India is already importing about 17-18 billion tonnes of coking coal.
“When we reach 300 billion (dollars), which is a stated target, expansion is going on at breakneck speed in the steel industry. We’ll need 30 billion dollars per year for cooking coal alone. And all of these products I’m mentioning are already being imported since the Congress time, since the UPA was in power. Nothing new,” he said.
“There’s a growth in demand and consumption of all of these products. In addition, we announced in the budget that we want to promote data centres, we want to promote the AI mission, and we want to promote critical manufacturing and critical minerals processing in India. All of this will require high-quality machinery, ICT products, and Nvidia chips, as well as machinery for AI for quantum computing. Where is all of that going to come from?” he said.
