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U.S.-India bilateral trade projected to grow to $238 billion by 2025

September 2018 marked the inaugural 2+2 Dialogue between the United States and India, formalizing the strategic relationship, but signs of a positive trajectory between the two partners started appearing earlier on, with burgeoning bilateral trade over the last few years. The U.S.-India trade relationship is currently at its highest point, with both economies witnessing positive growth in their bilateral trade volumes.
USISPF estimates that U.S.-India bilateral trade is likely to grow from $143 billion to $238 billion by 2025. This growth will occur if trade grows by 7.5% each year, as has been the trend for the last 7 years. The estimate also projects that, by 2025, bilateral trade could range between $283 billion to $327 billion, at an annual average growth rate of 10%-12.5% (as witnessed in 2017 and 2018). The assessment underscores pathways for growth and economic opportunity in our bilateral ties by highlighting current trends. Sectors such as defense trade, commercial aircrafts, oil and LNG, coal, machinery and electronics are areas of potential growth in U.S. investments and commerce into India. Similarly, Indian industry has an opportunity to promote the automotive, pharmaceuticals, seafood, IT and travel services to the U.S. market.


Highlights

  • The U.S.-India trade relationship is at its highest point currently, with both economies witnessing positive growths in their bilateral trade volumes. The trade numbers appear to be moving on a relatively balanced trade trajectory.
  • A significant growth rate in U.S. exports of goods and services to India in 2018, coupled with a relatively lower growth rate in U.S. imports from India, has resulted in an 8%-reduction in U.S. trade deficit (to $25.3 billion) from the 2017 level of approximately $27.5 billion.