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The Surprising Truth Behind India–U.S. Economic Relations

The Surprising Truth Behind India US Economic Relations
Piyush Prajapati 04 September, 2025

India and the United States rank among the largest economies globally, intricately connected through trade, services, investments, defense, and remittances. Collectively, they account for nearly $395 billion in bilateral transactions. However, when the figures are analyzed, one question emerges prominently: Who benefits more—India or the U.S ?

Category India’s Earnings from U.S. U.S. Earnings from India
Goods Exports/Imports $86B (exports to U.S.) $40B (exports to India)
Remittances $26B
Companies’ Earnings $40B (Indian firms in U.S.) $80B (U.S. firms in India)
Education (Students) $12B (Indian students in U.S.)
Digital/IP/Investments $19B
Defense & Aerospace $1B
Services (IT/Consulting) $42B $41B
Total Earnings $195B $198B

Source: Various Sources

India’s Strength: Goods and Remittances

India holds a significant advantage in goods exports, delivering $86 billion worth of products to the U.S. in contrast to merely $40 billion flowing in the opposite direction. This surplus is bolstered by India’s robust manufacturing and supply chain infrastructures.

The situation is further enhanced by remittances. The Indian diaspora residing in the U.S. remits an impressive $26 billion back home, establishing it as one of the largest and most dependable inflows into India’s economy. Collectively, these two foundations provide India with a substantial edge.

The U.S. Advantage: Companies, Students, and Intellectual Property

Conversely, the U.S. excels in areas associated with long-term presence and influence. American enterprises operating in India generate $80 billion annually—twice the $40 billion earned by Indian companies in the U.S. Education represents another significant revenue stream. Indian students pursuing studies in the U.S. contribute $12 billion each year in tuition and living expenses. When combined with the $19 billion accrued from digital/intellectual property/investments and $1 billion from defense and aerospace, the U.S. secures a clear advantage in these domains.

A Dead Heat in Services

In the realm of IT, consulting, and professional services, the competition is nearly equal. India generates $42 billion from services, while the U.S. generates $41 billion. This "dead heat" illustrates both India’s competitive IT landscape on a global scale and America’s leadership in high-end consulting and financial services.

The Final Score: A Near Tie
  • • India's earnings from the U.S. amount to $195 billion.
  • • The U.S. earnings from India total $198 billion.

The U.S. maintains a slight lead of $3 billion, yet the close figures indicate the growing interdependence of the two economies.

What This Means for the Future

For India, the forthcoming growth phase hinges on capturing greater value—through enhanced R&D, the establishment of global brands, and outbound investments that yield returns in the U.S. For America, the potential lies in leveraging its existing strengths—from education to digital platforms and defense collaborations.

This narrative does not depict one nation triumphing at the expense of the other. Rather, it highlights a partnership that is strikingly balanced—where both parties benefit, albeit in different manners, but nearly equally.

Source: Various Sources

Piyush Prajapati 4 September, 2025

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