Why Trump’s $100 billion India trade deficit math doesn’t add up

Despite repeated assertions by President Donald Trump that the US suffers a $100 billion trade deficit with India, a new report from think tank Global Trade Research Initiative (GTRI) puts the actual gap at less than half—$44.4 billion in FY2025.

The Delhi-based think tank said that after factoring in American earnings from Indian spendings on education, digital services, finance, IP, and defense, the US runs a net surplus of $35–40 billion with India.

“This trade deficit narrative is misleading and incomplete,” said GTRI founder Ajay Srivastava. “America already benefits immensely from India. India must negotiate the bilateral free trade deal (FTA) from a position of strength—rejecting hollow deficit claims and demanding fair, balanced, and reciprocal terms.”

GTRI’s report, ‘The Hidden Surplus: Rethinking the US–India Trade Balance,’ challenges Trump’s India-skewed deficit narrative and points to a broader, more profitable picture for the US.

The report notes that, beyond the goods trade, US earnings from India total $80–85 billion annually, delivering a net surplus of $35–40 billion to Washington.

On the campaign trail earlier this year, Trump claimed, “The US had a $100 billion trade deficit with India.”

But GTRI’s data show that the FY25 figure, while $44.4 billion, doesn’t reflect America’s full earnings footprint in India.

The report highlights the many channels through which the US profits from India.

Education

Indian students spend over $25 billion a year in the US, with institutions like USC, NYU, and Purdue topping the list. “An Indian student typically spends $87,000–$142,000 annually,” the report said—making higher education a top US “export.”

Digital services

Tech companies such as Google, Meta, Amazon, Apple, and Microsoft extract $15–20 billion a year from India, largely via ads, cloud services, and app sales. With limited data regulation, most of that money goes straight back to the US.

Financial and consulting services

US firms such as Citibank, Goldman Sachs, McKinsey, and Deloitte earn $10–15 billion yearly in India through financial and advisory operations.

Global capability centers

Companies such as Walmart, Dell, and IBM run backend offices in India, generating $15–20 billion, much of which is booked in the US.

Pharma, auto, and entertainment

American pharma firms earned $1.5–2 billion through patents and licensing. Hollywood and platforms like Netflix earn another $1–1.5 billion via Indian subscribers and box office sales.

Defense exports to India, while less transparent, are estimated to be worth billions more, GTRI said.

With free trade talks ongoing, the think tank urged India to resist US pressure for one-sided tariff cuts, particularly in sectors where US firms already dominate.

As US-India trade crosses $186 billion, their partnership is now one of the fastest-growing in the world.

“If the US keeps focusing only on the trade deficit,” Srivastava said, “then India should confine talks strictly to tariffs—and refuse any discussion on procurement, digital trade, or IP, where US firms stand to gain the most.”

“India must negotiate from a position of strength,” he added. “Reject deficit myths. Demand balance.”