India's Trade Surplus with United States Poised to Exceed $90 Billion Annually
A comprehensive new report from the State Bank of India reveals that India's trade surplus with the United States could potentially surpass $90 billion annually. This significant projection highlights the strengthening economic relationship between the two nations, driven primarily by rising export volumes and enhanced import potential following recent tariff adjustments.
Export Expansion and Market Opportunities
According to preliminary estimates detailed in the SBI analysis, Indian exporters have the capacity to increase their exports of the top 15 items to the United States by approximately $97 billion per year. This substantial boost could elevate total exports to the US market beyond the $100 billion annual threshold, creating unprecedented opportunities for Indian businesses.
The report emphasizes that recent tariff reductions have opened new avenues for Indian exporters to capture a larger share of the lucrative US market. This strategic advantage comes at a time when the trade surplus is already demonstrating robust growth momentum.
Current Trade Dynamics and Growth Trajectory
Recent data illustrates the accelerating pace of this economic relationship:
- The trade surplus reached $40.9 billion during FY25
- It stood at $26 billion for the April-December period of FY26
- The additional export push could propel the surplus beyond $90 billion annually
This expansion could contribute approximately 1.1 percent to India's GDP, representing a significant economic boost. Currently, the United States accounts for about 20 percent of India's total exports but only 7 percent of its imports, indicating substantial room for growth in bilateral trade.
Import Commitments and Market Potential
On the import side, India has made a substantial commitment to purchase $500 billion worth of US goods over the next five years. The United States could potentially export more than $50 billion worth of goods to India annually, with this figure excluding services trade.
Import values could increase by $55 billion as India agrees to reduce or eliminate tariffs on various US industrial goods and agricultural products. This development comes as some US products already maintain strong positions in Indian imports, with market shares ranging between 20-40 percent.
Specific Examples and Economic Benefits
The report provides concrete examples of existing trade relationships:
- The United States supplies 90 percent of India's almond imports
- Tariff reductions could help India save $100-150 million in foreign exchange on these items alone
- Total foreign exchange savings from reduced or zero import duties could reach $3 billion
- Additional savings are possible through import substitution strategies
In services imports, the US share remains relatively modest at just 15 percent, suggesting that India represents an untapped market for American goods and services. This gap presents mutual opportunities for both nations to deepen their economic partnership.
The SBI report concludes that the combination of expanding exports, strategic tariff reductions, and long-term import commitments creates a favorable environment for sustained growth in India-US trade relations, with the potential to reshape bilateral economic dynamics for years to come.
