By Jennifer Chang      Photo：Lara Jameson

The COVID-19 epidemic has caused economic shocks around the world. Many multinational companies are facing a crisis of chain disruption in their production and supply chain.  When the trade war between the two sides deepened, companies that set up factories in China began to seek independent production resources other than China. At this time, India has become the first choice for many multinational companies to relocate their factories. As the world's fifth largest economy, economic development is taking off rapidly, coupled with low English labor costs. With a population of 1.39 billion, India is the third largest consumer market and the fastest growing market economy in the world. India's demographic dividend can bring huge opportunities for US and Indian companies in technology transfer, manufacturing, trade and investment.

According to the report, trade experts said that the growth trend of bilateral trade will continue in the future as the United States and India further strengthen their economic relations. An Indian expert pointed out that India is emerging as a trusted trading partner, while global companies are reducing their dependence on China for supplies and diversifying their operations to other countries such as India. India's major exports to the US include petroleum polished diamonds, pharmaceutical products, jewellery, light oil and petroleum, frozen shrimp, cosmetics, etc. India's imports from the United States are mainly oil, rough diamonds, liquefied natural gas, gold, coal, recycled products and scrap iron, large almonds, etc.  Major shipping lines have increased capacity between the U.S. and India in response to rising demand. Exports from India have grown over the past two years due to increased efforts to reship empty containers back to India and the introduction of additional capacity by shipping lines.

It is reported that the "China Plus One" strategy is a business strategy to avoid investing only in China and to diversify into other countries. Over the past 20 years, Western companies have invested in China because of low production costs and a huge domestic consumer market. But as the cost of doing business in China increases, the initial advantages of cheap labor and market demand in China are slowly overshadowed by the advantages that ASEAN countries can provide. After surging 23.5% in all of 2021, container traffic between India and the U.S. rose 8.3% year-on-year in the first half of 2022, according to data from S&P Global's PIERS. Much of the increase was driven by U.S. imports from India, which accounted for about two-thirds of the 1.16 million TEU of freight shipped between the two countries in the first half of the year. Import freight  from India rose 12.4% in the first half of this year after a 31.4% surge in 2021, while outbound freight  from the US to India rose 1.1% in the first half of the year after a 10.5% increase last year. In the first half of 2022, demand for goods from India to North America continued despite rising inflation concerns and implications for consumer behaviour in Western markets.

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