Soon after slapping a 25 per cent tariff on Indian goods, US President Donald Trump stirred controversy by branding India a “dead economy” — a jibe that triggered diplomatic unease and ignited debate across political and policy circles. While Trump and others accuse India of unfairly benefitting from US trade, the truth is that the United States enjoys deep, often invisible economic advantages from one of the world’s fastest-growing markets. From defence and digital services to finance and pharmaceuticals, America quietly rakes in tens of billions annually from India — gains that don’t show up in standard trade statistics but profoundly shape the real balance of power. At face value, India appears to be winning. In FY2025, it recorded a $44.4 billion trade surplus with the US in goods and services. American leaders routinely cite this figure as proof that India is “taking advantage” of the relationship. But that narrow view misses the broader picture. A closer look at economic flows reveals the US, not India, as the bigger beneficiary. According to estimates by the Global Trade Research Initiative (GTRI), American companies and institutions earn between $80-85 billion from India each year in sectors typically left out of trade deficit calculations —including education, digital platforms, finance, defense, consulting, and intellectual property.
A major chunk of this comes from Indian students in the US, who spend over $25 billion annually on tuition, housing, and living expenses. These outflows are not counted as “exports,” yet they represent a steady stream of income for US universities, real estate markets, and local economies - with little coming back in return. The money flows one way.
US tech giants — Google, Meta, Amazon, Apple, Microsoft — are another major beneficiary. Together, they earn $15-20 billion a year from India’s vast digital economy. Meta alone earns billions from Facebook and Instagram advertising in India. The financial and consulting sectors tell a similar story. American firms like McKinsey, Deloitte, JP Morgan, and Goldman Sachs are deeply embedded in India’s corporate and banking ecosystem. Their annual earnings in India — ranging from $10-15 billion — far outstrip what Indian firms earn in US markets. The structural asymmetry is undeniable.
Global Capability Centers (GCCs) operated by US multinationals contribute another $15-20 billion. These back-end hubs support everything from R&D to tech operations and financial services. While they generate employment and skills in India, most of the financial gains are recognised and taxed in the US, not in India — and certainly not in proportion to their scale of operation here.
Add to this the billions earned through India’s defence purchases, royalties from patented drugs, and subscription revenues from platforms like Netflix and Disney, and the numbers stack up fast. In total, these “hidden flows” add up to a net economic surplus of $35-40 billion for the US — a fact that sharply contradicts the narrative of India enjoying a one-sided trade advantage. The imbalance is starkest in the digital economy. American platforms are omnipresent in Indian life, collecting data, monetising eyeballs, driving culture, and shaping discourse, yet they pay minimal taxes, create few local jobs, and leave little lasting value. Despite this, Washington continues to press India on trade — demanding lower tariffs, broader market access, relaxed data regulations, and fewer restrictions on American firms. India cannot afford to negotiate from a position built on flawed assumptions. It must recognise where the US already enjoys entrenched advantage and where Indian markets are subsidising US prosperity. This is not a call for protectionism, but a demand for fairness — especially in areas like digital trade, taxation of tech giants, data sovereignty, and market reciprocity.
The writer is Foreign Affairs Associate Editor, The Pioneer
