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(CNN) — US trade policies are under the microscope after President Donald Trump enacted tariffs on top trading partner China and teased more, broader tariffs in the coming days. With Narendra Modi, prime minister of India, expected at the White House on Thursday, CNN takes a look at the trade relationship between the two countries.
While India has been spared any tariffs from the new Trump administration so far, Trump said recently that reciprocal tariffs will be announced on any countries with tariffs on US goods, which would include India. Meanwhile, India could be mounting a case to avoid such tariffs, as the country has recently reviewed its trade policies in a move believed to entice additional trade with the US, according to several Reuters reports.
Here is what you need to know about US-India trade:
Where things stand
The US is India’s largest trade partner as of 2024, yet India ranks tenth in the list of US trading partners for the same year. The bilateral trade between the US and the world’s most populous nation stands at $129.2 billion in 2024, a record for the partnership.
With Trump planning to impose 25% tariffs on the US’s two top trade partners, Mexico and Canada, and a 10% tariff already in effect on Chinese goods, experts say India could benefit from these strained trade relationships by exporting more technology, electronics and jewelry to America.
“The United States and India both want to enhance their economic influence in the Indo-Pacific region and blunt China’s economic primacy. The time is ripe and the incentives are in place for these two leaders to beat the odds and make a major deal,” wrote Kenneth I. Juster, US ambassador to India from 2017 to 2021, and Mark Linscott, assistant US trade representative for South and Central Asian affairs from 2016 to 2018, in a January 21 Foreign Policy article.
The trade deficit between the US and India has been widening, with the United States importing $45.7 billion more from India than it exported there in 2024. And US imports from India accounted for about 2.7% of all imported goods last year.
Trump has been vocal about Modi’s own penchant for tariffs, but there have been signs that the South Asian country is open to cooling on levies. Earlier this month, India’s finance minister slashed the import duty on motorcycles, a move benefiting American bike company Harley Davidson.
What comes in and what goes out
The US counts pearls, semi-precious stones, pharmaceutical products and electrical equipment among their top imports from India. In 2023, imports of the top five products going from India to the US totaled more than $47 billion.
Modi is visiting Washington this week. The two leaders spoke on the phone on January 27, seven days after Trump’s inauguration, where they discussed expanding cooperation, security in the Indo-Pacific and the importance of India buying more US-made security equipment.
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