India US Trade Surplus Likely to Cross $90 Billion on Export Surge: SBI Research

KEY TAKEAWAYS:

India’s trade surplus with the US could exceed $90 billion annually.
Export potential to the US may cross $100 billion after tariff reductions.
Net impact on India’s GDP estimated at around 1.1 per cent.

NEW DELHI: India’s India US trade surplus is poised for a sharp expansion and may cross $90 billion annually, driven by a significant rise in exports and a calibrated increase in imports, according to a new report by SBI Research. The report highlights that recent tariff reductions present a “golden opportunity” for Indian exporters to rapidly scale their presence in the US market.

Based on preliminary estimates, Indian exporters could increase shipments of the top 15 export items to the United States by approximately $97 billion annually. When other product categories are included, total export potential could easily exceed the $100 billion mark each year.

India US Trade Surplus Set to Expand Sharply After Tariff Cuts

SBI Research noted that the expected surge in exports, combined with a structured rise in imports from the US, could significantly widen India’s trade surplus. The surplus stood at $40.9 billion in FY25 and $26 billion in FY26 during the April–December period.

“With tariffs coming down, India’s trade surplus with the US may thus cross $90 billion annually,” the report said, adding that the scale of export expansion could materially strengthen India’s external trade position. The net impact of this shift on India’s GDP is estimated at around 1.1 per cent.

Export Potential Driven by Top Products and Market Share Gains

The US currently accounts for nearly 20 per cent of India’s total exports, making it India’s single largest export destination. SBI Research pointed out that lower tariffs will allow Indian exporters to aggressively expand market share across high-performing product categories, including manufacturing and value-added goods.

The report suggests that Indian firms are well-positioned to capitalise on price competitiveness and scale advantages, particularly in sectors where tariff reductions directly improve margins and demand elasticity.

US Imports to India Also Set to Rise

While exports dominate the headline numbers, the report also underlined India’s role as a growing market for American goods and services. The US accounts for only about 7 per cent of India’s imports and around 15 per cent of services imports, indicating substantial headroom for growth.

On the import side, the US has an annual export potential of over $50 billion to India, excluding services. India has agreed to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural and food products. Over the next five years, India plans to purchase $500 billion worth of US goods, with imports potentially rising by $55 billion.

Also Read | India-US Bilateral Trade Agreement Unlocks Major Export Boost for Indian Industries

In several commodities, the US already commands a significant share of India’s imports—ranging from 20 to 40 per cent—which is expected to increase further. For example, the US supplies nearly 90 per cent of India’s almond imports.

Forex Savings and Long-Term Trade Impact

SBI Research estimates that tariff reductions on select items could help India save $100–150 million in foreign exchange reserves. Overall savings from zero or reduced import duties on US goods could reach around $3 billion, with additional gains possible through import substitution.

The report concludes that the combination of export growth, strategic import expansion and forex savings could reshape India–US trade dynamics, firmly positioning India for a sustained rise in trade surplus and long-term economic gains.