US trade policies are under scrutiny as President Donald Trump has implemented—or plans to implement—tariffs on the country's three largest trading partners, with the possibility of broader tariffs in the near future. With Indian Prime Minister Narendra Modi set to visit the White House later this week, examines the trade dynamics between the two nations.

So far, India has not been directly impacted by the new US tariffs, but Trump recently stated that reciprocal tariffs would be imposed on any country that levies duties on American goods—including India. In response, India has been reviewing its trade policies, possibly to encourage increased trade with the US, according to reports from Reuters.

Current Trade Relations

As of 2024, the US is India’s largest trading partner, while India ranks tenth among America’s trade partners. Bilateral trade between the two countries reached a record $129.2 billion in 2024.

With the US imposing a 25% tariff on its top trading partners, Mexico and Canada, and a 10% tariff on Chinese imports, experts believe India could capitalize on these strained relationships by increasing exports of technology, electronics, and jewelry to the US.

“The United States and India both aim to strengthen their economic presence in the Indo-Pacific and counter China’s dominance. The timing is right for both leaders to strike a major deal,” wrote Kenneth I. Juster, former US ambassador to India, and Mark Linscott, former assistant US trade representative, in a January 21 article for Foreign Policy.

The US trade deficit with India has been growing, with the US importing $45.7 billion more from India than it exported there in 2024. Indian goods accounted for approximately 2.7% of total US imports last year.

While Trump has criticized Modi’s protectionist trade policies, there are indications that India may be softening its stance. Earlier this month, India’s finance minister reduced import duties on motorcycles—a move that benefits American motorcycle manufacturer Harley-Davidson.

Major Imports and Exports

The US imports a range of goods from India, including pearls, semi-precious stones, pharmaceuticals, and electrical equipment. In 2023, the top five Indian exports to the US amounted to over $47 billion.

Modi is set to visit Washington on February 12–13. The two leaders last spoke on January 27, shortly after Trump’s inauguration, discussing trade expansion, security in the Indo-Pacific, and increased Indian purchases of US-made defense equipment.