| Country | Impact on real GDP growth | Impact on CPI inflation |
| United States | -0.2% | 0.8% |
| Japan | 0 | 0 |
| India | -0.1% | 0 |
| Indonesia | -0.1% | -0.1% |
| Australia | -0.2% | -0.2% |
New Delhi’s $32-billion trade surplus as of 2023 with Washington D.C. is likely to irk the 47th President of the United States, and Narendra Modi has seen how he’s reacted.
During his first term, Trump imposed tariffs on Indian goods like steel and aluminium. India also lost its preferential trade status under the Generalized System of Preferences (GSP).
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India-US bilateral trade touched $118.3 billion in 2023-24 as the US became India’s top trading partner from 2021-22.
While exports to the US declined by 1.32% to $77.5 bn in 2023-24 vs $78.54 bn in 2022-23, imports dropped by nearly 20% to $40.8 bn.
India’s exports to the US increased 22% during the Trump regime between January 2017 and Jan 2021 whereas it jumped over 51% in the first three years of the Joe Biden administration up to 2023. The Trump 1.0 era would have seen a setback due to the pandemic too.
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18% of India’s merchandise exports are purchased by the United States including key items like electronics, pharmaceuticals, petroleum products, and precious stones. India is a major services exporter, particularly in IT and professional services, to the US.
The services trade between the two countries expanded to nearly $70.5 billion as of June-July 2024, from $54.1 billion in 2018, a 30.3% increase over six years.
The USD-INR exchange rate is likely to be another point of friction. Both India and the US under Trump would like to see their respective currencies weaken to boost exports. While the Reserve Bank of India (RBI) maintains that the value of the rupee is determined by the market, the Indian central bank reportedly spent over $10 billion in recent weeks to curb the volatility in the currency.
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(Edited by : Sriram Iyer)
