Introduction

The economic reforms introduced in India since 1991 have integrated the Indian economy with the global economy, opening up a vast opportunity for foreign investment and trade. In recent years, trade between India and the US has been rising, for example, US exports to India rose from US$ 7,989 million in 2005 to US$ 10,091 million in 2006, and India's exports to the US also increased from US$ 18,804 million in 2005 to US$ 21,826 million in 2006. The stock of actual FDI increased from US$ 11.3 million in 1991 to US$ 6.2 billion as on July 2007. The US is the second largest investing country in India in terms of FDI approvals, actual inflows and portfolio investment. FDI inflows from the US constitute about 12 per cent of the total actual FDI inflows into India. US investments cover almost every sector in India, that is open to private participants. India continues to remain the 24th largest export destination for the US. In terms of exports to the US, India now ranks 18th. India's investments in the US are picking up. Indian companies invested over US$ 2 billion in the US in 2006–07. These investments were made largely in manufacturing and non-financial services.

India and the US, the two great pluralistic democracies, are now positioned for a partnership that will be crucial in shaping the international landscape of the twenty-first century. Since 2000, the two countries have been making efforts to strengthen the institutional structure of their bilateral economic relations by means of the India-US Economic Dialogue, aimed at deepening Indo-US collaboration through regular dialogue and engagement. Indo-US collaboration in agri-business holds great promise against this backdrop.