India’s Trade Surplus With US May Narrow Under Proposed BTA: Crisil

New Delhi, Jun 25 (KNN) India’s goods trade surplus with the United States may shrink following the implementation of a proposed Bilateral Trade Agreement (BTA), according to a research report by Crisil. 

The report outlines the potential impact of the upcoming deal, which is currently under negotiation and expected to see its first phase concluded by September 2025.

During the financial year 2024–25, India recorded a goods trade surplus of USD 41.18 billion with the US, as per Indian government data. 

Despite the US being India’s largest export destination, the trade pact is expected to pave the way for higher imports from the United States, particularly in sectors such as energy, certain agricultural products, and defence equipment.

The Crisil report attributes the likely increase in imports to India’s relatively higher tariff structure. With the BTA aiming to lower these barriers, US exporters stand to benefit significantly. 

In contrast, India's exports may not witness a substantial surge, as many of its key exports to the US—such as textiles, gems and jewellery, and pharmaceuticals—are already largely duty-free.

Nonetheless, the report identifies untapped potential for Indian exports, particularly in smartphones, pharmaceuticals, and other labour-intensive sectors. 

The trade talks gained urgency after the US announced reciprocal tariffs on India and several other countries in April 2025. 

These tariffs were subsequently suspended for 90 days from April 10 to allow for negotiations on comprehensive trade deals.

The report also underscores that the US, as the world’s largest economy and importer, remains a critical partner for India’s external trade strategy, though the emerging deal may reconfigure the current trade dynamics in favour of more balanced bilateral flows.

(KNN Bureau)