State by State: India and Pennsylvania Trade
Pennsylvania ranks as the sixth largest economy in the U.S. with a GDP of US$ 609 billion in 2014. If Pennsylvania were an independent country, it would be included in the top 20 largest economies in the world. The largest industries in the state, by way of employment, are industrial machinery and equipment, fabricated metal products, agribusiness, chemicals and allied products, and printing and publishing. In 2014, Pennsylvania’s real GDP grew by 1.8 percent, while the 2013-2014 national change was 2.2 percent. The 2004-2014 compound annual growth rate (CAGR) for Pennsylvania’s real GDP was 1 percent, while the CAGR for the country was 1.4 percent.
Imports and Exports
Trade and investment between Pennsylvania and India have progressed from strength to strength. Indian companies have 51 locations in Pennsylvania, ranking 18th among countries with the highest number of firms in Pennsylvania. The Indian businesses in Pennsylvania create 1,323 local jobs.
Exports from Pennsylvania to India in the areas of machinery, computer and electronic goods, metal manufacturing, chemicals and minerals was pegged at US$ 275 million in 2006-07 before the recession. These exports increased to US$ 482.6 million in 2014. The biggest contributors to India-Pennsylvania trade relations are mineral fuel and oil, industrial machinery and medical instruments.
The Indian market has been growing consistently, and there are great opportunities to expand trade and investment between India and Pennsylvania, particularly in the energy and manufacturing sectors. Through Make in India, the Modi government has been aggressively promoting FDI in select manufacturing sectors in India, and improving India’s ease of doing business. Pennsylvanian firms can take advantage of this business friendly climate, and given the Pennsylvania’s key industries – tap into India’s rising energy needs, and its expanding market for machinery goods and medical instruments.
Mineral Fuel And Oil
Pennsylvania’s energy sector has benefited from the shale gas boom, made possible by new fracking technology that has enabled the exploitation of deep deposits of natural gas. The state can become an important source of energy requirements for the fast-developing, energy sparse Indian economy that seeks to move away from excessive energy dependence on the Persian Gulf.
This sector provides the fifth highest exports from Pennsylvania to India annually, which was US$ 33.4 million in 2014. The sector has great scope for improvement, especially as the Make in India campaign has allowed for 100 percent FDI into the sector. The electrical machinery industry has been delicensed, facilitating the entry of global companies.
Medical tourism is booming in India with the rise of super-speciality and single-speciality hospitals, providing access to world-class healthcare facilities at affordable costs when compared to many Western countries. The Indian medical tourism sector is projected to grow at an annual rate of 30 percent, which will make it a US$ 2 billion industry by 2015. This should be a great incentive for Pennsylvanian manufacturers of medical instruments (optical, photographical, medical and surgical instruments and equipment) as India offers a fast-growing and well-established market.
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 Pennsylvania-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 firstname.lastname@example.org.
For further Pennsylvania-Asia trade data, please see our related article on trade with China.
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 email@example.com or visit www.dezshira.com.
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