India is expected to see a significant increase in its trade surplus with the US, potentially exceeding $90 billion annually following a trade deal. This deal could lead to an additional $45 billion in annual trade surplus with the US, equivalent to 1.1% of India’s GDP, and result in savings of $3 billion in forex reserves, according to a report by SBI Research. The report highlights that Indian exporters stand to benefit substantially without compromising on sensitive issues.
Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India, projects that Indian exporters may boost their exports of the top 15 items to the US by $97 billion annually. Taking into account other items, this figure could easily surpass the $100 billion mark. Additionally, the US has the potential for over $50 billion in yearly imports from India, excluding services.
India’s trade surplus with the US stood at $40.9 billion in FY25 and $26 billion in FY26 (April-December). The report anticipates this surplus to escalate and potentially cross $90 billion annually. Furthermore, the recent trade agreement between the US and Bangladesh has implications for India. While the deal reduces tariffs on Bangladeshi goods to 19%, concerns arise regarding the competitiveness of Indian textile exporters due to certain clauses favoring Bangladesh.
The report suggests that despite the advantages offered to Bangladesh, importing from the US would be more costly than importing from India, maintaining India’s competitive edge. If US cotton were to replace a portion of India’s cotton and man-made fiber exports to Bangladesh, India might face a marginal loss of $1 billion. Moreover, a trade deal with the EU has opened up a $260 billion textile market for India with zero duty on textile imports.
