The U.S.-India economic relationship has been promoted as a strategic partnership benefiting both nations. However, this narrative is increasingly at odds with the reality that American workers are being exploited through misleading trade practices.
Trade Surplus Claims Mislead American Workers
According to the Global Trade Research Initiative, the U.S. supposedly runs a $35-$40 billion trade surplus with India. This claim relies on dubious accounting methods, counting offshore labor operations in India as American exports while ignoring the negative impacts on U.S. wages, employment, and innovation capacity. As reported by the U.S. Bureau of Economic Analysis, the actual trade deficit with India stood at a staggering $46.08 billion in 2024, a number that continues to rise.
Inflated Metrics Obscure Real Trade Imbalance
The GTRI’s attempt to reframe the trade deficit by including tangential revenue streams such as digital services and student spending is not just misleading; it is a deliberate tactic to create an illusion of balance. These figures do not accurately reflect the economic realities of trade. For instance, the $25 billion claimed from Indian student spending in the U.S. should not be classified as a trade surplus. Instead, it represents individual consumption, akin to a tourist spending money in the U.S. economy.
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Offshoring Displaces American Jobs
Furthermore, revenue generated by Global Capability Centers (GCCs) operated by U.S. corporations in India is misleadingly counted as part of this alleged surplus. These centers are not contributing to the U.S. economy; they are mechanisms of offshoring that displace American workers. A software engineering job that costs $140,000 in the U.S. is often replaced by a $45,000 position in India, leading to wage suppression and job losses in the States.
Protectionist Policies from India
India has positioned itself as a protectionist economy, masking its trade barriers with the rhetoric of globalization and cooperation. While demanding access to U.S. markets, India maintains high tariffs and other barriers, all while portraying itself as a fair trading partner. The Indian government’s policies, such as the “Make in India” initiative, serve to shield its domestic industries from fair competition, further exacerbating the trade imbalance.
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Consequences for American Economic Sovereignty
As India continues to manipulate trade narratives, American policymakers must recognize the implications for U.S. economic sovereignty. If these distorted claims are accepted without scrutiny, the U.S. will be forced to subsidize its own decline while India reaps the benefits. The federal government must prioritize protecting American workers and holding trading partners accountable for their economic practices.
