India-US trade deal could lift exports to $100B, surplus beyond $90B
India-US trade deal could lift exports to $100B, surplus beyond $90B
SBI Research sees exports to the US surging to $100B annually, widening the trade surplus beyond $90B as tariffs fall to 18%, with GDP gains and forex savings.
India’s trade relationship with the United States is poised for a major shift, with SBI Research projecting a rise in the annual goods trade surplus by about $45 billion and exports potentially surpassing $100 billion a year following the new bilateral agreement. The tariff cuts bring Indian shipments to the US to 18%, making them more price-competitive and positioning India among the most competitive Asian exporters in the American market. Even after accounting for an estimated $55 billion rise in imports from the US, the net surplus could exceed $90 billion annually, with an estimated GDP boost of around 1.1% and foreign exchange savings of roughly $3 billion from lower duties.
There is a substantial demand–supply gap in the US market. While total US imports across key categories exceed $3 trillion, India currently accounts for only about 3% of that demand. Sectors such as electrical machinery, pharmaceuticals, engineering goods, gems and jewellery, textiles, chemicals, vehicles and seafood show particularly large gaps that Indian exporters can bridge, given the new tariff environment.
However, the deal faces a nuanced landscape for textiles. A parallel agreement with Bangladesh offers select Bangladeshi garments zero-duty access if they use American cotton, which could alter the competitive balance in the US apparel market. This development raises questions about how Indian textile exporters will respond and adapt to shifts in tariff policy and sourcing rules. The overall trajectory suggests a reset in India–US trade dynamics, with potential broad-based gains for exporters and a stronger role for India in global supply chains.
