A Look At India-US Trade Dynamics Ahead Of PM Modi's High-Stakes Visit To Washington
PM Modi's two-day visit to the US includes a bilateral meeting with President Trump. India and the US seek to enhance their partnership, particularly in trade and investment.
Prime Minister Narendra Modi will start his two-day working visit to the US on Wednesday, during which he will hold a bilateral meeting with President Donald Trump, their first since the latter returned to power. Both countries have said this visit will provide further direction and momentum to the "important partnership" between them.
The visit will offer a "valuable opportunity" to engage with the new administration on various areas of mutual interest, Foreign Secretary Vikram Misri said in a press briefing Wednesday. PM Modi will also engage with business leaders and the Indian community in the US.
During his meeting with President Trump, Modi is set to discuss a range of bilateral issues, besides those on regional and international matters.
"There is an obvious convergence of interests between the two countries in a number of areas -- trade, investment, technology, defence cooperation, counterterrorism, Indo-Pacific security, and of course, people-to-people relations," Misri said during the briefing.
Trump has announced plans to implement tariffs on the country’s three largest trading partners, with more expansive tariffs expected in the coming days. While India has avoided tariffs from the Trump administration so far, the president recently warned of reciprocal tariffs on countries, including India.
In response, India is reportedly reviewing its trade policies to encourage more trade with the US and potentially avoid such tariffs, according to a Reuters report.
US-India Trade Partnership
As per a CNN report, the US is India’s largest trading partner (as of 2024), with nearly $120 billion in trade, while India ranks 10th on the list of US trading partners. Mexico, Canada, and China hold the top three positions, with a combined trade total of over $2 trillion. Bilateral trade between the US and India reached a record $129.2 billion in 2024.
As President Trump plans to impose 25 per cent tariffs on the US’s top two trade partners, Mexico and Canada, and with a 10 per cent tariff already in place on Chinese goods, experts suggest India could capitalise on these strained trade relations by increasing exports of technology, electronics, and jewellery to the US.
"The United States and India both want to enhance their economic influence in the Indo-Pacific region and blunt China’s economic primacy. The time is ripe and the incentives are in place for these two leaders to beat the odds and make a major deal," the CNN report quoted Kenneth I. Juster, former US ambassador to India, and Mark Linscott, former assistant US trade representative for South and Central Asia, from a January 21 Foreign Policy article.
Also Read: India Energy Week 2025: India First Country To Achieve Paris Agreement Target, Says PM Modi
Trade Deficit
The United States has consistently run a trade deficit with India, which has grown since Trump’s first term in office. In 2024, the trade deficit widened further, with the US importing $45.7 billion more from India than it exported there. US imports from India made up around 2.7 per cent of all imported goods last year, according to the CNN report.
Trump has frequently criticised Modi's approach to tariffs, but recent developments suggest India may be open to reducing levies. Earlier this month, India cut the import duty on motorcycles, benefiting US-based Harley Davidson. The US imports a variety of goods from India, including pearls, semi-precious stones, pharmaceutical products, and electrical equipment. In 2023, imports of the top five products from India to the US accounted for over $ 47 billion, reveals the report.
The top items India imported from the US between April 2023 and March 2024 were mineral fuels and oils, pearls and stones, nuclear reactors, electrical machinery and equipment, and lenses, microscopes, medical instruments.
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