State by State: India and Rhode Island Trade

May 22, 2015 Posted by India Briefing Reading Time: 4 minutes

Located along the Northeast corridor of the United States, Rhode Island is a mere 180 miles from New York City. The small coastal state is known for its knowledge economy based on its elite universities and hospitals. In 2013, Rhode Island’s GDP was US$53.2 billion. The largest contributor to the state’s GDP growth was professional and business services sector. Today, Rhode Island’s industry base is dominated by healthcare, education, financial services, defense and advanced manufacturing.

Trade and Exports

Trade between Rhode Island and India began in 1792 and boomed in 2014. Last year, Rhode Island’s exports to India reached US $26 million, a 101.5 percent increase over the previous year. Imports from India during the same period reached US $55 million. The biggest exports from Rhode Island include ferrous waste & scrap, silver powder, blood fractions and gold compounds. Rhode Island exporters also have access to an advanced export infrastructure and services, including freight logistics, air cargo, port services and shipping.

Investment Opportunities

Medical Devices

India has just opened up its medical devices industry, presenting abundant investment opportunities for the many Rhode Island businesses that specialize in the healthcare sector. India’s cheap yet skilled labor force make it an ideal location for manufacturers to set up their factories.

Finance

In the finance sector, Prime Minister Narendra Modi’s plan to establish Gujarat as a global financial hub is supported by the government’s regulatory framework for the sector. Incentives exist for the establishment of financial facilities such as offshore banking, currency convertibility and international exchange at the Gujarat International Finance Tec City.

Defense

India is one of the largest defense importers in the world. The government has recently extended the validity of industrial licenses for the defense industry from three to seven years. The reform means that defense companies now effectively have ten years to begin manufacturing in India – a significant development given the long gestation period for large defense contracts.

Though the country has been making efforts to protect and encourage domestic defense manufacturers, the lack of supporting technology has made it difficult for domestic firms to sate India’s defense requirements. This presents an opportunity for businesses in Rhode Island, as the small state has a long running tradition of innovating underwater defense technology.

RELATED: Pre-Investment and Entry Strategy Advisory

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 India legal establishment. Please seek professional advice for specific India investment requirements.

Further Support from Dezan Shira & Associates

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

For further Rhode Island-Asia trade data, please see our related articles on trade with ASEAN, China and Vietnam.

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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