India plans to purchase $500 billion worth of goods from the United States over the next five years; however, economic experts have described this target as unrealistic and a potential threat to the country’s trade balance.
Reuters reported on Wednesday evening, February 11, that U.S. President Donald Trump announced last week that tariffs on Indian goods would be reduced from 50 percent to 18 percent. In return, India was asked to more than double its annual imports of American goods.
In the 2024–25 fiscal year, trade between the two countries totaled $132 billion, with India recording a trade surplus of approximately $41 billion in its favor.
Madhavi Arora, an economist at Emkay Global, said: “This target is more aspirational than realistic.”
A joint statement from the two countries said India intends to purchase $500 billion worth of American goods, but the commitment is not legally binding.
The two sides said India plans to increase purchases of U.S. oil, gas, coal, and aircraft.
Indian markets stabilized after an initial rally following the announcement, but economists say investors remain cautious about the $500 billion target.
The United States is India’s largest export destination, accounting for nearly one-fifth of the country’s total exports in the 2024–25 fiscal year.
If imports rise sharply, India’s trade surplus would shrink and the country’s overall trade deficit would widen.
