The Profit the US Makes from India Greatly Surpasses Its Trade Deficit, According to GTRI
A New Perspective on US-India Trade Relations
A recent study led by the Global Trade Research Initiative (GTRI) challenges the common belief of a US trade deficit with India, suggesting that the United States actually benefits from a significant economic surplus in its trade with the country.
Despite US President Donald Trump’s focus on addressing the trade deficit with India and the imposition of reciprocal tariffs, the study reveals that when considering all commercial transactions between the two nations, the United States enjoys a substantial surplus from its dealings with India. While the US trade deficit with India amounts to approximately $45 billion annually, the US gains $80-85 billion each year from various sectors such as education, digital services, financial activities, intellectual property royalties, and arms sales, resulting in a surplus of $35-40 billion.
According to the founder of GTRI, Ajay Srivastava, “Even as Washington urges India to reduce tariffs and open up its markets, the United States is already reaping significant economic benefits from its trade relations with India. India has the capacity to negotiate a free trade agreement from a position of strength by challenging the deficit arguments and advocating for fair, balanced, and reciprocal terms.”
Trade between India and the US soared to $186 billion in 2024-25, with India exporting $86.5 billion worth of goods to the US and importing $45.3 billion, resulting in a goods trade surplus of $41 billion. Additionally, India’s services sector contributed to the surplus by exporting $28.7 billion to the US, surpassing imports which amounted to $25.5 billion, thereby adding $3.2 billion to the surplus.
Moreover, Indian students studying in the US contribute over $25 billion annually to the American economy, predominantly through tuition fees and living expenses. Major US tech companies such as Google, Meta, Amazon, Apple, and Microsoft generate an estimated $15-20 billion in sales revenue from the Indian market each year. American financial institutions and consulting firms, including Citibank, JPMorgan, Goldman Sachs, McKinsey, BCG, Deloitte, PwC, and KPMG, earn around $10-15 billion annually from their operations in India’s financial sector.
Furthermore, Global Capability Centers (GCCs) operate largely in India, but the economic value derived from their activities is predominantly registered in the US, generating $15-20 billion in revenue annually. US pharmaceutical companies like Pfizer, Johnson & Johnson, and Merck earn approximately $1.5-2 billion per year through patents, drug licensing, and technology transfer.
US automotive companies such as Ford, GM, and component suppliers earn between $0.8-1.2 billion annually from licensing agreements and technical services provided to the Indian market. Hollywood productions and US streaming platforms contribute an additional $1-1.5 billion through Indian box office sales, subscriptions, and content licensing.
Lastly, US defense sales to India comprise a significant portion of the trade relations between the two nations, contributing billions to the economy, although specific figures are often undisclosed.
