Union Commerce Minister Piyush Goyal on Sunday stated that India will have no problem purchasing goods worth $500 billion from the United States over the next five years. Terming the figure “extremely conservative”, Goyal said that India’s growing economy is expected to generate a total import demand of nearly $2 trillion in the same period.
Speaking to PTI, Goyal said that at present India can immediately rake in imports worth $300 billion from the US by eliminating procurement of a select array of goods and services from other countries, provided American companies remain competitive.
In FY 2024-2025, India imported goods and services worth $45.6 billion from the United States.
“We are even today importing 300 billion dollars of goods that can be imported from the US. We are importing from all over the world. That is going to grow up to two trillion in the next five years…I told my counterparts that look, I can assure you that there is demand in India, but you have to be competitive,” he told PTI in an interview.
India and the US on Saturday announced that they have finalised the framework for the first phase of the bilateral trade agreement.
As per the joint statement, the interim agreement proposes for the US to cut tariffs from 50 to 18% across a wide variety of Indian goods and services in exchange for complete elimination of tariffs and other trade barriers from the Indian side on certain US agricultural and Industrial products.
In his interview with PTI, Goyal presented an entire breakdown of India’s $500 billion shopping list from the US which contains energy products, aircrafts, aircraft parts, precious metals, data centre equipment among other ‘strategic’ goods. A detailed sector-wise analysis of India’s trade plans has been posted below.
Aviation and energy: The $100 billion anchor
The cornerstone of this ambitious procurement plan lies in the aviation and energy sectors. Goyal on Sunday confirmed that the $500 billion target includes existing and upcoming orders, particularly in the aerospace segment.
This means that India’s previously placed orders worth $50 billion for Boeing aircraft have already been included as a part of the $500 billion calculation. Including engines and spare parts, orders already in the pipeline total $80-90 billion.
“India is importing between $45-50 billion from the US, and these are products which India does not produce. We are going to need aircraft. We are going to need engines for aircraft. We are going to need spare parts,” Goyal said.
“We already have $50 billion worth of orders on Boeing alone for aircraft. We have orders for engines. So, almost 80, 90 billion (dollars) is already on order for the next five years. We will actually need more than that,” he added.
Goyal expects the aviation sector’s requirement alone to cross the $100 billion mark, especially with Tata Group’s potential for further fleet expansion.
Beyond aircraft, India is set to ramp up imports of Oil, LNG, LPG, and crude oil from the US or potentially Venezuela as part of a strategic shift in energy sourcing.
AI Infrastructure and Data Centres
The commerce minister said big tech firms have announced large investments in India. As India promotes its AI Mission and the setup of 10 gigawatts (GW) of data centers, the demand for high-end technology is surging. Goyal emphasised that the US, as a primary technology provider, is ‘best’ source for high-quality ICT products, Nvidia chips and hardware for quantum computing.
“We want to promote the AI mission, and we want to promote critical manufacturing and critical minerals processing in India. All of this will require high-quality machinery, ICT products, and Nvidia chips, as well as machinery for AI for quantum computing. Where is all of that going to come from?” he said positioning USA as the ‘best provider’ of tech equipment for India.
Steel Industry: $30 Billion Annual Coal Demand
India’s push for self-reliance in infrastructure is driving massive expansion in the steel sector. To meet the national target of 300 million tonnes (MT) of steel production capacity by 2030, the demand for coking coal is set to skyrocket.
“We’ll need $30 billion per year for coking coal alone,” Goyal noted, adding that India is already importing about 17–18 billion tonnes of coking coal. He clarified that these coal imports are a continuation of long-standing economic arrangements which date back to the UPA alliance and not anything new.
After giving this breakdown, Goyal reiterated his previous claim that the 500 billion dollar figure is not a very big promise for India and is rather a conservative figure for the size of its economy.
“So 100 billion (dollars per year) is very conservative. I think it’s extremely conservative for a country which wants to become a 30 trillion dollar economy, which India intends to,” Goyal added.
Addressing domestic concerns, Goyal assured that the trade deal contains adequate safeguards for the agricultural sector. The minister also insisted that the US market will give farmers “much bigger value” and said that farmers’ income will increase as a result of this trade agreement.
“Trade deals will have adequate safeguards for farmers, a 2-page document cannot capture everything,” he told PTI.
When asked if the 18% tariffs will also be eliminated some time in the future, Goyal clarified that there is no fixed deadline for the total elimination of the 18% US tariffs, as trade negotiations are an ongoing, “calibrated” process.