PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

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Two-Way Trade: Slow but Steady
Key Findings:
• U.S.-India merchandise trade is small, but growing.
• Bay Area merchandise trade with India is mainly in low-end manufactured imports,
technology, and agriculture exports.
• Indian IT and software exports dominate, tied to financial, health care, tech sectors.
• California agricultural exporters face tariff, phytosanitary and fumigation barriers.
• Outside of hotels and airport duty-free shops, high duties protect Indian wineries.
• Dockers are the IT uniform in India; Cost Plus profits from Indian fashions.
• Direct flights and budget hotels are a key to unlock India tourist growth.
T
rade relationships are inherently difficult to measure. Merchandise is tracked as it passes
through harbor or airport gateways, typically using a combination of vessel or cargo jet
manifest data, shipper’s export declarations, automated inbound customs filings, and so on.
Ultimately, merchandise trade data is viewed as a measure of overall economic and employment
activity. But it is often impossible to tell from that data whether the point of origin or the destination
was actually local to the gateway area, or whether goods were simply passing through the
gateway en route to or from another part of the U.S., or whether a local origin or destination
point was simply a distribution center or other storage facility where little or no value added
work was done.
Services trade is far more nebulous. Clients worldwide may access customer relations management
software on a company’s servers on a subscription basis. An advertising agency may send
artwork to a magazine across the globe by email and receive payment from the client in a third
country by wire transfer. Banks process thousands of foreign exchange and letter of credit transactions
daily, and collect both monthly and per transaction client fees in addition. Engineering
and architecture teams in multiple countries may similarly exchange design drawings relating to a
high-rise office building and a developer located in completely different parts of the world.
Teenagers in India may pay a monthly fee to access multiplayer online games over lines provided
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