India-US Trade Explained: From shrimp and smartphones to oil and tariffs

As India negotiates a trade deal with the US, while facing one of the highest tariff rates imposed by the Donald Trump administration, the country’s trade surplus with the US has doubled in the last six years. As multiple sectors gear up for considerable disruptions and near-term price distortions, a number of developing Asian and European economies could benefit in sectors where India is one of the major exporters to the US.

As India faces one of the highest tariff rates in the world, trade surplus with the USA has doubled in the last six years

Government push in smartphone manufacturing has driven up India's electrical exports to the US by 90% in FY25 compared to the year before. Petroleum imports from the US have simultaneously risen.

India accounted for about 14% of the US' imports of gems and jewellery in 2024. Canada and South Africa follow closely with a 10% share.

Any disruption in India's shrimp exports to the US could mean significant gains for countries like Ecuador, Indonesia and Vietnam

Textile from Bangladesh pose a stiff competition to Indian textile exports to the USA 

India's reliance on cheaper Russian crude oil continues to grow. Russia made up less than 2% of India's total crude imports before the invasion of Ukraine, it now accounts for more than a third of it

Since the 'reciprocal tariffs' were first announced in April this year, a number of countries have managed to negotiate trade deals and lower tariff rates with the Trump administration.