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US Enjoys $35-40 Billion Surplus With India If Services, Arms, Royalties Included: GTRI
- US runs a $35-40 billion surplus with India when considering revenues from education, digital services, financial activities, royalties, and arms trade on top of the reported $44.4 billion trade deficit.
- The Global Trade Research Initiative states that this surplus should give India confidence in free trade negotiations, countering inflated deficit claims and advocating for fair terms.
- US President Donald Trump has raised concerns about the trade gap, using deficit figures to urge India to reduce tariffs and open its market further.
- The US earns $80-85 billion annually from India through various sources like education, digital services, financial operations, intellectual property royalties, and arms sales.
- In FY2025, total trade between India and the US amounted to $186 billion with India holding a goods trade surplus of $41 billion and a total trade surplus of about $44.4 billion.
- Significant revenue sources for the US from India include higher education, digital services by tech giants, financial sector services, and Global Capability Centers in tech hubs like Bengaluru and Hyderabad.
- American pharma firms earn $1.5-2 billion yearly through patents, while auto companies and Hollywood contribute to US income through licensing, box office sales, and content.
- US defense sales to India also generate substantial income, bolstering the argument for India to negotiate trade agreements from a position of strength.
- The think tank highlights that India should reject one-sided trade concessions and insist on fair, balanced, and reciprocal terms in negotiations.
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