A Look At India-US Trade Reliance Ahead Of PM Modi's Washington Visit

Prime Minister Narendra Modi is set to reach Washington on Wednesday for a two-day visit to meet US President Donald Trump, marking his first bilateral visit to the US since the Republican leader began his second term in the White House. Amid uncertainty looming over the future of US immigration and tariff policies, the meeting between the two leaders is expected to focus on bolstering India-US strategic ties, especially in areas of trade cooperation.

Notably, this is the earliest in an American President's term that an Indian Prime Minister is visiting him. PM Modi and Mr Trump enjoyed certain personal rapport during the American President's first term, and from New Delhi's perspective, a face-to-face meeting between the two leaders is important.

Despite certain pushback on immigration, India has, so far, been largely spared any tariffs from the new Trump administration. 

India-US Trade Relationship 

As of 2024, the US was India's largest trade partner accounting for almost $120 billion in trade. However, India ranked tenth in the list of US trading partners. The bilateral trade between Washington and New Delhi stands at $129.2 billion in 2024, a record for the partnership, according to a report by CNN.

Pearls, semi-precious stones, pharmaceutical products, and electrical equipment are among the products the US imports from India. Meanwhile, New Delhi gets crude oil and related products, gems and stones, nuclear reactors and electrical and medical equipment from the US. 

Mr Trump planning to impose 25 per cent tariffs on America's two biggest trade partners--Mexico and Canada-- and a 10 per cent tariff already imposed on Chinese goods. Amid such strained trade relationships, India could benefit by exporting more technology, electronics and jewellery to the US. 

In a January Foreign Policy article, Kenneth I Juster, former US ambassador to India from 2017 to 2021, and Mark Linscott, former assistant US trade representative for South and Central Asian affairs from 2016 to 2018, wrote that both the United States and India 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 article said.

India-US Trade Deficit

Per the CNN report, the trade deficit between the US and India has been widening, with India exporting $45.7 billion more to the United States than it imported from there in 2024. Imports from India accounted for about 2.7 per cent of all imported goods in the US last year. 

Amid this, Trump recently announced the imposition of reciprocal tariffs on any countries with tariffs on US goods, which would include India as well. But experts believe India could be mounting a case to avoid such taxes, as New Delhi recently reviewed its trade policies in a move believed to entice additional trade with the US.

Trump has also been vocal about Prime Minister Modi's own penchant for tariffs, but New Delhi has signalled that it was open to cooling on levies. Earlier this month, Indian Finance Minister Nirlama Sitharaman slashed the import duty on motorcycles, and electric vehicles, a move set to benefit American companies like Harley-Davidson and Tesla.