For First Time, India Is Top Buyer Of U.S. Oil, Plus $100 Billion Trade Partner

For the first time, India was the No. 1 purchaser of U.S. oil in 2021, one of the United States’ fastest-growing exports.

Also for the first time, India’s trade topped $100 billion as it re-entered the list of the United States’ top 10 trade partners, finishing at No. 9 for the fifth time in the last six years.

Because India is the world’s largest democracy and because it has been one of the United States’ fastest-growing trade partners over the last two decades, some have been critical of India’s unwillingness to stand firmly with the West in condemnation of the Russian invasion of Ukraine.

This is the ninth in a series of columns focused on each of the United States’ top 10 trade partners. I previously wrote columns about Canada, Mexico, China, Japan, Germany, South Korea, the United Kingdom and Taiwan.

After this analysis of the India-U.S. trade relationship will come a post about No. 10 Vietnam. These 10 countries account for two-thirds of all U.S. trade, with just the top three at better than 43%.

I wrote a similar series of columns about the nation’s top 10 ports — Chicago’s O’Hare International Airport, Port of Los Angeles, Port Laredo in Texas, New York’s JFK International, the Port of Newark, the Port of Houston, Detroit’s Ambassador Bridge, Los Angeles International Airport and the Port of Savannah.

In 2021, India purchased $9.5 billion of oil from the United States, a 119.35% increase over the 2020 total, which is better than triple the U.S. growth rate. Its trade increased 44.29% over 2020, better than twice the overall U.S. average, and 23.15% over its 2019 record, which was also more than twice the national growth rate.

Overall U.S. exports to India performed so well, relative to other trade partners, that India entered the nation’s top 10 exporters in 2021 for the first time.

While U.S. oil exports to India is an important part of the trade relationship — it has been India’s top-ranked export from the United States for last three years — trade really revolves around diamonds.

Although oil replaced diamonds on the export side, diamonds are far and away the leading import. The value of those imports in 2021 was $10.8 billion — or $1.3 billion more than the oil exports.

In fact, diamonds are the first import from India to top $10 billion in a year. The total was a 35.17 % increase over 2020 and a 18.63% increase over the 2018 record total. the year also marked the sixth consecutive year that India was the No. 1 source for uncut diamonds. It replaced Israel in 2016.

India’s 2021 total of $10.8 billion topped the record set by Israel in 2007 of $9.49 billion. That year, U.S. imports from India totaled $3.69 billion.

With that shift in U.S. imports, from Israel to India, has come a slight shift in the entry point for the diamonds.

In Israel’s record-setting year for U.S diamond imports, New York’s JFK International Airport accounted for 87.21% of the total while second-ranked Los Angeles International Airport accounted for 8.87 %.

That was LAX’s last year in single digits and JFK’s last year above 85%. In 2021, JFK still accounted for a dominant 77.45% of the total but for the third time in four years, LAX topped 20% of the total.