State by State: India and Ohio Trade

October 30, 2015 Posted by India Briefing Reading Time: 5 minutes

With the seventh highest GDP in the nation, the state of Ohio is a significant player within the United States’ agricultural, manufacturing, and service sectors. Ohio’s GDP totaled US $583.4 billion in 2014, an increase of over US$130 billion in the past decade. The state’s primary industries include finance, insurance, and real estate, which together account for nearly 20 percent of Ohio’s gross domestic product (GDP). Product manufacturing of non-durable goods serve as the state’s second largest contributor to its GDP, accounting for 0.44 percent of its growth in 2014. In addition, the state has the largest bioscience sector in the Midwest. It is also a major producer of plastics, rubber, fabricated metals, electrical equipment and appliances.

Imports and Exports

The total export values for Ohio in 2014 was US $52.24 billion, an increase of 2.6 percent from the previous year. The top exports were:

Civilian aircraft engines and parts – US $4.3 billion
Vehicle parts and engines – US $2.12 billion
Soybeans and NESOI – US $1.7 billion

Leading destinations for exports included Canada, Mexico and China – India was Ohio 22^nd largest market. Ohio’s exports from India in 2014 were valued at US $388 million, marking an increase from the previous year. India was Ohio’s eighth largest import partner with a value of US $1.3 billion in 2014, a 33 percent increase from the previous year

Investment Opportunities

Airline industry

The Indian airline industry is expected to grow and become the third-largest aviation market by 2020, and the largest by 2030. Domestic and international passenger traffic from India is expected to increase at an annual average rate of 12 percent and 8 percent, respectively, over the next five years, which will continue to fuel demand for aircraft and aircraft parts. Domestic low-cost carrier SpiceJet is expected to place an order for 80 to 100 airplanes to expand their fleet, while IndiGo, another domestic carrier, has ordered 100 new planes.

However, these airlines have struggled to meet the demand for engines and other spare parts.The country’s national carrier Air India, for example, currently has a fleet of 21 Boeing 787 Dreamliners. However, one of the planes has been grounded so that the airline can strip the plane for spare parts because it can’t obtain parts for repairs at the rate required. Businesses in Ohio that produce aircraft parts are well-positioned to service India’s growing airline industry.

RELATED: Pre-Investment and Entry Strategy Advisory

Automobile industry

The Indian auto industry is one of the country’s largest, accounting for 7.1 percent of the country’s GDP. The auto industry has attracted foreign direct investment worth US$ 13.48 billion between April to June 2015, according to the Department of Industrial Policy and Promotion (DIPP). Several foreign auto companies have invested in India, including General Motors, Ford, BMW, DiamlerChrysler AG, Renault, Suzuki, Toyota, Honda and Hyundai.

The government wants to make India a global automobile hub. While India remains Asia’s fourth largest exporter of passenger cars, demand for manufacturing expertise and technology continues to grow, and auto companies in Ohio can service these requirements. India’s cheap yet skilled workforce make it an ideal location for automobile and part manufacturers to set up their factories. Most major manufacturing hubs are located around Chennai, Tamil Nadu state, which accounts for 60 percent of the country’s exports, followed by hubs around the national capital Delhi, Mumbai, Maharashtra state and several areas in Gujarat state.

Tax Treaty – U.S. Trade with India

The U.S. has signed a Double Tax Treaty with India. This can reduce tax burdens under certain circumstances in both trade and any legal establishment. Please seek professional advice for specific India investment requirements.

Further Support from Dezan Shira & Associates

Dezan Shira & Associates can service Arizona-based companies that are looking to develop their Asia operations. The firm can help companies establish a direct office in the region and guide them through the affiliated tax, legal and HR procedures. To arrange a free consultation, please contact our U.S. office at usa@dezshira.com.

For further Ohio-Asia trade data, please see our related article on trade with ASEAN and China.

About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email india@dezshira.com or visit www.dezshira.com.

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