Trump's claim of trade deficit with India is not true, America is in surplus, know how

The goods and services cited by US President Donald Trump in the trade figures with India do not include the business of 80 to 85 billion dollars. If those figures are included, then America will not have a trade deficit with India but it will be in surplus. Still, Trump is pressuring India to reduce tariffs by accusing it of being a tariff king

US President Donald Trump has repeatedly raised the issue of trade deficit and accused India of being a 'tariff king'. He is pressuring India to reduce tariffs on imports from America. But his claim of trade deficit is based on incomplete facts. Let's know how.

According to the think tank Global Trade Research Initiative (GTRI), America gets 80 to 85 billion dollars every year from education, digital services, financial operations and intellectual property royalties etc. If these figures are included, then America is not in a trade deficit with India, but in a surplus of 35 to 40 billion dollars.

What is the reality of Trump's claim

Trump had claimed on 13 February 2025 that America's trade deficit with India is $100 billion. This figure was wrong. According to the data of the Government of India (DGCI&S), in 2024-25, there was a trade of $186 billion between the two countries. India exported goods worth $86.5 billion to America and imported $45.3 billion from America. In this way, India was in a surplus of $41 billion in goods exports. In the case of services, India exported $28.7 billion while imports were $25.5 billion. In this, India was in a surplus of $3.2 billion. In this way, the total surplus comes out to be $44.4 billion in favor of India.

These businesses are not included in the figures

But these figures do not include many important businesses. America earns a lot of income from India in the higher education sector. Indian students studying in America spend about $25 billion every year - $15 billion as tuition fees and the remaining $10 billion is spent on living there. The annual expenditure of Indian students ranges from $87,000 to $142,000. In this way, education is one of the biggest exports from America to India.

American giants like Google, Meta, Amazon, Apple and Microsoft earn $15 to $20 billion every year from India's digital market. This revenue comes to them from digital advertising, cloud services, app stores, software and device sales and streaming subscriptions. A large part of it goes back to America. American banks and consulting firms like Citibank, JP Morgan, Goldman Sachs, McKenzie, BCG, Deloitte, PWC and KPMG earn revenue of $10 to $15 billion from India every year.

Another big source of income for America is the Global Capability Center (GCC). Companies like Walmart, Dell, IBM, Wells Fargo, Cisco and Morgan Stanley are running GCCs in Bengaluru and Hyderabad. Most of their work is done in India but their economic value goes to America which is $15 to $20 billion annually.

American pharmaceutical companies like Pfizer, Johnson & Johnson, Merck get one and a half to two billion dollars every year from patents, drug licensing and technology transfer. Automobile companies like Ford and GM and component suppliers earn $0.8 to $1.2 billion from licensing and technical services. Hollywood and US streaming platforms get one to one and a half billion dollars every year from box office, subscription and content licensing in India. America also sells billions of dollars to India in the defense sector, the figures of which are often confidential.

India should tell the reality of the figures in trade talks: GTRI

Ajay Srivastava, founder of Global Trade Research Initiative, says that India should go into the talks of free trade agreement with America with full confidence and should oppose the exaggerated claim of deficit made by America.

If America still focuses on the trade deficit, then India should also limit the talks to tariffs. Negotiations should be refused in government procurement, digital trade, intellectual property and other matters. According to Srivastava, there is no point in giving big concessions to America in sectors which have nothing to do with the trade balance because this will increase America's trade surplus further.