US President Donald Trump believes that America’s trade relationship with India is a ‘one-sided disaster’. The reality actually presents a completely different picture! The US actually enjoys a $35–40 billion surplus once all earnings are counted, according to an analysis by the Global Trade Research Initiative (GTRI).On Monday, Trump expressed criticism on Truth Social regarding India-US trade relations, asserting that whilst India conducts substantial business with the United States, America’s commercial dealings with India are limited.
He described the trade dynamics as unbalanced, highlighted India’s allegedly high tariff rates, suggested this pattern has continued for years, and disapproved of India’s decisions to procure oil and military hardware from Russia rather than the United States.Also Read | Reality check for Trump! Why blame India for Russian crude trade? US, EU trade with Russia runs in billions“What few people understand is that we do very little business with India, but they do a tremendous amount of business with us. In other words, they sell us massive amounts of goods, their biggest “client,” but we sell them very little – Until now a totally one sided relationship, and it has been for many decades. The reason is that India has charged us, until now, such high Tariffs, the most of any country, that our businesses are unable to sell into India. It has been a totally one sided disaster! Also, India buys most of its oil and military products from Russia, very little from the U.S. They have now offered to cut their Tariffs to nothing, but it’s getting late. They should have done so years ago. Just some simple facts for people to ponder!!!,” Trump posted on Truth Social.
Dear Trump – check your facts, please
A GTRI analysis reveals that the United States generates significantly higher earnings from India compared to India’s earnings from America. Although the US faces a $45 billion trade deficit with India, the overall commercial balance shows America maintaining a positive surplus of $35-40 billion with India!This substantial income stems from various sources:
- American tech companies like Google, Meta, Amazon, Apple, and Microsoft generate $15-20 billion yearly from India’s digital sector
- McDonalds, Coca cola and several US companies earn over $15 billion from Indian ventures
- Wall Street financial institutions and consulting firms collect $10-15 billion in fees
- Global Capability Centers of Walmart, IBM, Dell, and others produce $15-20 billion recorded in the US
- Additional revenue comes through pharmaceutical patents, Hollywood films, streaming services, and defence agreements.
- Additionally, Indian students attending US universities contribute more than $25 billion annually towards education fees and local economies.
The evidence indicates that America benefits considerably from its economic relationship with India.
Trump blind to economic links beyond trade
US tariffs on India – Trump’s charge misses the mark!
GTRI is of the view that India’s proposed tariff concessions are far more generous than Trump suggests. Though both sides remain tight-lipped about ongoing trade talks, India has reportedly offered to remove duties on industrial products and certain agricultural items including almonds and apples.This would give the US nearly complete duty-free access to Indian markets, as these categories represent over 95% of American exports to India.The notion of persistent unfairness in trade relations is unfounded, as India has progressively liberalised its economy through the years. Previous arrangements cannot be reversed.Also Read | India’s holdings of US Treasury bill down! Gold finds favour in forex reserves; still among top 20 T-bills investorsRegarding Russia, India’s decisions on oil procurement and defence acquisitions stem from its sovereign prerogative to protect national interests. India maintains its status as an autonomous power implementing a multi-aligned foreign policy, not subordinate to Washington, says GTRI.“Many observers believe Trump’s frequent outburst against India is less about trade and more about his wounded ego. They recall that India’s clear rebuttal of his exaggerated claims of having played a role in peace between India and Pakistan may have stung his ego, particularly when he was hoping such claims could bolster his case for a Nobel Peace Prize,” concludes GTRI.
