Countertrade in India

Countertrade experts regularly consult with high-level private and Indian government bodies, such as the Confederation of Indian Industries and the Ministry of Defense. Boeing recently sold sixty-eight commercial aircraft (twenty-three Boeing 777s, twenty-seven Boeing 787s, and eighteen Boeing 737s) to Air India (the national, and government-owned, carrier) for delivery through 2011. For the sale price of nearly $8 billion, Boeing agreed to spend over $2 billion of the receipts in unspecified offset countertrade deals.

For many years finance experts attributed 40 to 50 percent of all world trade to some form of countertrade. In 2003, Foreign Direct Investment magazine quoted the United Kingdom’s minister for international trade, Baroness Symons, as claiming that this ratio was more like 10 to 15 percent of world trade. The Boeing deal falls in between these estimates, which suggests that the estimate of 40 to 50 percent is not unreasonable. It seems, then, that the use of countertrade as a primary marketing tool rather than as a financing technique is becoming more popular every year, especially as constraints on currency convertibility between the United States and India continue to diminish.