India will face no difficulty in purchasing goods worth $500 billion from the United States over the next five years, with Commerce and industry minister
Piyush Goyal calling the number “very conservative” given the scale of demand expected from the country’s expanding economy.
Speaking to PTI Videos in an interview on Sunday, Goyal said India’s import demand is projected to touch about $2 trillion over the next five years, creating significant scope to increase sourcing from the US.
“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. That is going to grow up to two trillion in the next five years...I told my counterparts that look, I can assure you that there is demand in India, but you have to be competitive,” he said.
Trade pact framework and import roadmap
India and the US on Saturday announced that they have finalised the framework for the first phase of the bilateral trade agreement. According to a joint statement issued by both sides, India has expressed its intention to purchase $500 billion of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years.
Goyal said rising investments by global technology firms in India are expected to significantly increase demand for equipment imports. He said large data centre expansion is likely to drive demand for US-origin technology and equipment.
“My sense is that we will see 10 gigawatts of data centres” in India, he said, adding that the US can supply key equipment required for such infrastructure.
Aviation demand and existing order pipeline
Responding to a query on whether the $500 billion purchase plan includes existing aircraft orders, including Boeing deals, Goyal said current commitments are part of the overall figure.
“Everything that we are talking about is in continuation and includes what we already are purchasing,” he said.
He added that India currently imports about $45-50 billion worth of goods from the US, largely in categories where domestic production is limited.
“We are going to need aircraft. We are going to need engines for aircraft. We are going to need spare parts. We already have $50 billion worth of orders on Boeing alone for aircraft. We have orders for engines,” he said.
The minister said aviation sector demand alone could cross $100 billion over the next five years.
“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. 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,” he said.
Steel, energy and technology to drive future imports
Goyal also flagged strong demand for coking coal to support steel sector expansion.
India is already importing about 17-18 billion tonnes of coking coal, he said, adding that rising steel production could push import demand sharply higher.
“When we reach 300 billion, which is a stated target and 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.
The minister said rising consumption and industrial demand in the world’s fastest-growing major economy will continue to drive imports of high-end technology and industrial inputs.
“There's a growth of 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.
Goyal said the US remains the world’s leading provider of advanced technologies.
“So, 100 billion (dollars per year) is very conservative. I think it's extremely conservative for a country which wants to become a 30 trillion dollar economy, which India intends to,” he added.