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India Eyes $500B US Import Boost
8 Feb
Summary
- India plans to import $500 billion from the US over five years.
- Key imports include aircraft, Nvidia chips, energy, and coal.
- A trade agreement framework aims to cut US tariffs on Indian goods.
India is projecting a substantial increase in imports from the United States, with a target of $500 billion over the coming five years. This figure is considered "extremely conservative" by Union Commerce Minister Piyush Goyal, given India's ambition to become a $30 trillion economy and its projected import demand of nearly $2 trillion in the same period. Currently, India imports $45.6 billion from the US in FY 2024-2025, but Goyal believes an immediate $300 billion could be sourced from the US if American companies remain competitive.
The finalized framework for the first phase of a bilateral trade agreement was announced, which includes a reduction in US tariffs on Indian goods and services in exchange for India eliminating tariffs on certain US agricultural and industrial products. Major import categories identified by Goyal include energy products, aircraft, aircraft parts, and data center equipment. The aviation sector alone is expected to drive demand exceeding $100 billion, with existing orders for Boeing aircraft and engines already accounting for $80-90 billion.
India's burgeoning AI Mission and plans for 10 gigawatts of data centers are fueling a demand for high-end technology, with the US identified as the primary provider of ICT products, Nvidia chips, and quantum computing hardware. Additionally, India's expanding steel industry requires significant imports of coking coal, estimated at $30 billion annually. Goyal assured that the trade deal includes safeguards for India's agricultural sector, anticipating increased farmer incomes through greater access to the US market.
