As India and the United States forge a new chapter in their relationship, several key economic indicators highlight the deepening ties between the two nations. The U.S. has become one of India's most significant trade partners, and recent agreements signal a move towards even greater cooperation.
Bilateral Trade: The total value of goods and services traded between India and the U.S. reached an estimated $212.3 billion in 2024, marking an 8.3 percent increase from $196 billion in 2023. This growth underscores the expanding economic partnership. In the fiscal year 2025, total bilateral trade between India and the U.S. reached a record of $132.2 billion.
Goods Trade: In 2024, the total trade in goods between the two countries amounted to an estimated $128.9 billion. U.S. exports to India were valued at $41.5 billion, a 3.0 percent increase from the previous year, while imports from India totaled $87.3 billion, up by 4.5 percent. The trade deficit in goods stood at $45.8 billion in 2024, a 5.9 percent increase over 2023.
Services Trade: The services sector also witnessed substantial growth, with total trade reaching an estimated $83.4 billion in 2024. U.S. services exports to India amounted to $41.8 billion, an increase of 15.9 percent, and services imports from India totaled $41.6 billion, up by 15.4 percent.
Recent Trade Agreement: A new interim trade framework has been established, signaling a commitment to further reduce import duties and boost two-way trade. Under this framework, tariffs on Indian exports to the U.S. have been reduced to 18%. Previously, tariffs were at 50%. The U.S. will eliminate tariffs on some Indian exports, including generic pharmaceuticals, gems and diamonds, and aircraft parts, pending the agreement's finalization. India will also eliminate or reduce import duties on U.S. industrial goods and a range of food and agricultural products such as dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, soybean oil, wine, and spirits. This selective opening of the Indian market aims to balance trade benefits while protecting domestic farmers and MSMEs.
Impact of Reduced Tariffs: The tariff reductions are expected to make premium nuts, fruits, wines, and soybean oil more accessible to middle-class households in India, potentially easing input costs for food processors and the livestock sector. Moreover, the U.S. market's opening to processed food items from India could create new growth opportunities for Indian FMCG and food brands.
Broader Economic Cooperation: India has expressed its intent to purchase $500 billion worth of U.S. energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next five years. Both countries aim to significantly increase trade in technology products, including GPUs and other goods used in data centers, while expanding joint technology cooperation.
Indian Diaspora: The significant Indian diaspora in the United States serves as a crucial link between the two countries, contributing significantly to the U.S. economy and fostering stronger cultural and economic ties. Indian Americans, who constitute approximately 1 percent of the U.S. population, have an average household income almost double the national average and are highly educated. This community not only provides a cultural bridge but also a source of revenue for India.
Looking Ahead: As India and the U.S. continue to strengthen their strategic partnership, the economic numbers paint a clear picture of growing collaboration and mutual benefit. While challenges remain, the commitment to a broader Bilateral Trade Agreement (BTA) signals a promising path toward even greater economic integration and cooperation in the years to come. Industry bodies predict that India-USA trade will likely touch $300 billion in 2026-27.