US–India Trade

What it is

The US-India trade relationship covers the two-way exchange of goods and services between the United States and India. In 2025, goods trade totaled US$149.4 billion, with US goods exports of US$45.6 billion and US goods imports from India of US$103.8 billion. Services trade added an estimated US$83 billion (2024 figures), and the two-way services total is nearly balanced. The US runs a persistent goods trade deficit with India: US$58.2 billion in 2025, a 27% year-on-year rise. Key Indian exports to the US include generic pharmaceuticals, smartphones, refined petroleum and cut diamonds; key US exports to India include crude petroleum, petroleum gas, civil aircraft and gold. The two governments aim to more than double combined trade to US$500 billion by 2030 under what Indian officials call "Mission 500."

History

Modern US-India commercial ties accelerated after India's 1991 economic liberalization. Washington extended Generalized System of Preferences (GSP) benefits giving thousands of Indian product lines duty-free access to the US market, a status India held for decades. In June 2019, the first Trump administration revoked India's GSP eligibility, citing market barriers on medical devices, dairy and e-commerce. Those benefits were never restored. In February 2025, Donald Trump and Narendra Modi jointly declared a goal of negotiating a comprehensive Bilateral Trade Agreement and reaching US$500 billion in bilateral trade by 2030. In April 2025, the US administration declared a national emergency over its trade deficit and imposed a 25% "reciprocal" tariff on Indian goods, followed by a 25% penalty tied to India's purchases of Russian crude oil. Combined duties peaked near 50%.

Current state

In February 2026, Modi and Trump agreed to an interim framework: US tariffs on Indian goods were cut to 18%, the Russian-oil penalty was removed, and India pledged to purchase approximately US$500 billion of US energy, aircraft parts, information-and-communication-technology products and coking coal over five years. India also committed to reducing non-tariff barriers on US medical devices, agricultural goods and ICT products. The US Supreme Court subsequently struck down Trump's original tariff authority, leaving a flat 10% universal duty in force that expires July 24, 2026. As of late June 2026, USTR Jamieson Greer had completed two rounds of talks in New Delhi with Commerce Minister Piyush Goyal and Finance Minister Nirmala Sitharaman. Foreign Secretary Vikram Misri described the interim deal as in its "final stages," yet no agreement was signed before the June round closed. A Modi-Trump meeting at the G7 in Évian on June 17 had restored momentum to talks that had stalled, as detailed in 莫迪与特朗普在G7上加快推进印美贸易协定，7月24日关税悬崖临近, but agriculture market access and dairy imports remain India's principal red lines. The US has sought reductions in India's average agricultural tariff of roughly 37% and specific automobile duties above 100%.

Relationships

The trade track sits inside a broader US-India strategic relationship that includes defense partnership, Quad security cooperation and joint supply-chain resilience initiatives. India is the US's ninth-largest goods trading partner and its largest single source of imported generic medicines. Services trade is nearly balanced: US$41.8 billion in US exports to India versus US$41.6 billion in US imports from India in 2024, driven by India's large information-technology and business-process sector. India's goods surplus with the US is politically sensitive in Washington; India's agricultural sector, which employs roughly 42% of the Indian workforce, constrains what New Delhi can concede on farm imports. The Russian crude dimension adds a strategic overlay: India imports roughly 90% of its oil needs, Russian crude at a discount became a significant share of that after 2022 sanctions, and Washington treated continued purchases as leverage in tariff negotiations.

What to watch

• Whether a signed interim agreement lands before the US July 24, 2026 duty expiry and at what headline tariff rate, given the Supreme Court's invalidation of Trump's original tariff authority.
• Whether India materially reduces Russian crude imports following the February 2026 pledge, or preserves what Indian officials call "strategic autonomy" on energy sourcing.
• Agriculture and dairy carve-outs: any US demand for formal market access will encounter India's farm-sector politics in states critical to the ruling coalition.
• Progress toward a comprehensive Bilateral Trade Agreement covering intellectual property, digital trade and labor standards beyond the interim deal's tariff framework, and when formal negotiations on those chapters begin.