$40 billion yearly: US profits from India far exceed what trade data reveals, yet pushes tariff cuts over a ‘deficit’

In a familiar volley during his campaign trail, Donald Trump claimed the US had a $100 billion trade deficit with India. The real number is less than half of that — and even that doesn't tell the full story. While goods and services data show a $44.4 billion deficit for the US in FY2025, America actually rakes in far more money from India through less obvious channels. From higher education and tech to financial services and arms sales, the US quietly pockets $80-85 billion each year. The result? Not a deficit — but a surplus.

According to the Global Trade Research Initiative (GTRI), once America’s earnings from education, digital services, consulting, intellectual property, and defense sales are factored in, it runs a net surplus of $35-40 billion with India.

This drastically shifts the narrative. India is not a trade outlier exploiting US openness — it is a lucrative market powering American profits across key sectors.

The most striking example is higher education. Indian students spend over $25 billion annually in the US, with top universities like USC, NYU, and Purdue among the biggest beneficiaries. The average Indian student spends between $87,000 and $142,000 a year.

Next comes digital. Tech giants Google, Meta, Amazon, and Microsoft earn an estimated $15-20 billion from India through ads, cloud services, devices, software, and subscriptions. Most of this revenue flows back to the US, with limited taxation.

American financial institutions like JPMorgan, Citibank, and McKinsey rake in another $10-15 billion by advising Indian companies and managing deals. Meanwhile, back-end operations through Global Capability Centers (GCCs) — run by firms like Dell, IBM, and Wells Fargo — generate $15-20 billion in revenues, most of which is recorded in the US.

Pharma companies such as Pfizer and Merck collect $1.5-2 billion annually via patents and tech transfers, while automakers and parts suppliers earn up to $1.2 billion through licensing and services.

US entertainment also cashes in. Hollywood and platforms like Netflix make up to $1.5 billion from Indian box office sales and streaming subscriptions, with Netflix alone investing $400-500 million in Indian content each year.

Defense is another lucrative arena, with US arms sales to India contributing billions more — though exact figures remain confidential.

All of this stands in sharp contrast to Washington’s persistent focus on the goods trade deficit. In FY2025, India exported $86.5 billion worth of goods to the US and imported $45.3 billion, resulting in a $41 billion goods surplus. On services, India held a modest $3.2 billion edge.

If the US continues to frame trade talks around a misleading deficit, India should draw a clear line — discussing only tariff issues and steering clear of concessions in government procurement, digital trade, or IP protections. These are sectors where the US already dominates and seeks even greater access.

India, as a major contributor to US economic power, should enter any trade negotiation with confidence. The real numbers don't show imbalance — they show leverage.