India–US trade deal seen lifting surplus by $45 bn, exports could top $100 bn annually: Report
India’s trade relationship with the United States is set for a significant reset, with the country’s annual trade surplus with the US projected to rise by $45 billion, while export potential could cross $100 billion a year, following the new bilateral trade agreement, according to an analysis by SBI Research.
The deal, which brings down the reciprocal tariff on Indian goods to 18%, places India among the most competitive Asian exporters in the US market. The tariff rate is now lower than several key Asian peers, including Vietnam and most ASEAN economies, sharply improving the relative pricing of Indian exports across a wide range of sectors.
SBI Research estimates that India’s goods exports to the US could increase by about $100 billion annually, driven by both tariff reductions and a large unmet demand in the American market. Even after accounting for a projected $55 billion rise in imports from the US, India’s net goods trade surplus could expand by $45 billion, taking the total surplus with the US beyond $90 billion a year. The net impact is estimated to add around 1.1% to India’s GDP, while also generating annual foreign exchange savings of about $3 billion due to lower import duties.
The export upside is supported by a substantial demand–supply gap in the US market. While total US imports across key product 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 between US demand and Indian supply, offering immediate headroom for expansion.
SBI Research estimates that exports of the top 15 product categories alone could rise by nearly $97 billion annually, with total export gains comfortably crossing the $100 billion mark when other commodities are included. Electrical machinery, nuclear reactors and mechanical appliances, pharmaceuticals, vehicles and gems and jewellery are expected to be among the largest contributors to incremental exports.
Agriculture is another major beneficiary of the agreement. Nearly 75% of India’s agri exports to the US will now face zero additional tariffs, covering products such as rice, spices, tea, coffee, oilseeds, nuts and seafood. India already runs an agricultural trade surplus of about $1.3 billion with the US, and lower duties are expected to directly benefit farmers, fisheries and plantation-linked sectors. The US accounts for nearly 25% of its rice imports from India, while seafood and spice exports are also expected to scale up meaningfully.
On the import side, India has agreed to eliminate or reduce tariffs on a wide range of US industrial and agricultural goods, and has indicated an intention to purchase $500 billion worth of US products over the next five years, including energy, aircraft, technology products and precious metals. While imports from the US could rise by around $55 billion annually, SBI Research notes that the overall balance remains decisively in India’s favour.
The agreement also opens the door for China+1 supply chain diversification, particularly in electronics and electrical equipment. SBI Research highlights the potential for US companies to invest in India for value addition, substituting Chinese imports and using India as an export base for global markets.
Overall, the trade deal positions India in a uniquely strong strategic and economic position. By improving export competitiveness without conceding sensitive domestic sectors, the agreement could accelerate manufacturing, boost exports, strengthen external balances and deepen India’s role in global supply chains—marking a decisive shift in India–US economic engagement.
