India's trade relationship with the United States has shown robust growth over the past two decades, with India's exports to the US growing at a compounded annual growth rate (CAGR) of 10.48% between 2001 and 2023. In comparison, the US's total imports from the world grew at a CAGR of 4.76% during the same period. This upward trajectory in bilateral trade has continued irrespective of changes in political leadership in either country.

Sustained Growth Across Administrations

Speaking about the steady trade growth, Commerce Secretary Sunil Barthwal highlighted that India's trade engagement with the US has remained resilient across four different US presidencies from 2001 to 2023.

“Regardless of who has been in power, the trade relationship between India and the US has consistently grown,” Barthwal stated. “We are now deeply integrating our value chains with the US through frameworks such as the Indo-Pacific Economic Framework for Prosperity (IPEF) and other bilateral agreements.”

Strengthening Trade Ties and Integration

India’s share of US imports has increased significantly, rising from 0.9% in 2001 to 2.8% in 2023. Alongside this, US exports to India have also seen steady growth, reflecting a deepening economic integration between the two nations. Services trade has played a significant role in this growth, with services exports from India to the US reaching $36.3 billion in 2023, while imports from the US stood at $25.9 billion.

“The US has been a large exporter of services, but India’s services exports to the US have also grown steadily over the last decade. In terms of services trade, the balance between the two countries is now nearly equal,” noted Rajesh Agrawal, Additional Secretary in the Department of Commerce.

Recent Trade Figures and Outlook

In the fiscal year 2023-24, bilateral merchandise trade between India and the US reached $119 billion, comprising $77.5 billion in Indian exports and $42.1 billion in imports. For the period of April to October 2023 alone, India’s goods exports to the US rose by 6% year-on-year, amounting to $47.2 billion.

The growing economic engagement is underpinned by mutual efforts to expand trade mechanisms and address policy gaps. While India awaits specific trade policy directions from the incoming US administration, it remains poised to build on the existing strong foundation.

Future Prospects Amid Policy Shifts

With Donald Trump’s previous presidency, there were discussions around a potential mini-trade deal. Commenting on whether this would be revisited, Commerce Secretary Barthwal noted that India’s approach would depend on the policy pronouncements of the new US administration once it is fully operational.

During his campaign, Trump mentioned plans to increase import duties significantly—up to 20% across the board, with a 60% tariff on Chinese imports and 100% duties on certain products like electric vehicles. He also pointed out India’s high tariff rates on goods, which could become a focal point in future trade negotiations.

India’s trade relationship with the US has demonstrated remarkable resilience and consistent growth over the years. As the largest trading partner for India, the US has played a pivotal role in boosting both goods and services trade. While the global trade landscape continues to evolve, the strong economic integration between India and the US positions both countries for continued mutual benefits.