India remains one of the world’s fastest growing major economies although it faces challenges common to many other countries such as inflationary pressures, commodity price volatility, supply chain vulnerabilities, and global geopolitical and demand risks, as well as challenges common to developing economies such as weak IPR enforcement and a wide range of other regulatory and non-regulatory barriers to doing business in the country. The United States-India trade relationship continues to grow, with total trade in goods and services reaching an estimated $212.3 billion in 2024, up 8.3% from ($16.3 billion) from 2023, and nearly double the 2014 level. Indian’s economy grew 6.5% in Indian Rupee (INR) terms during the India Fiscal Year (IFY) from April 1, 2024, to March 31, 2025. Growth during IFY 2024-25 was particularly strong, 8–9% (in INR terms), in the five southern states of Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, and Kerala.
These states account for 30% of India’s GDP, while Maharashtra (home of the financial and commercial hub of Mumbai) and Goa account for another 20% of India’s GDP. The IMF projects India’s economy to grow 6.2% (in INR terms) in fiscal year 2025-26, outpacing the global average. Due to persistent INR depreciation against the dollar, the Indian economy has been growing at a much slower rate – only a few percent annually — in dollar terms.
Indian government FDI initiatives are concentrated in sectors such as information technology services, software, business services, pharmaceuticals, and industrial equipment. U.S. FDI into India in 2024-2025 reached $58.53 billion, with cumulative investment since totaling $70.65 billion, making the U.S. India’s third-largest investor.
Following a minor decline of Indian-origin foreign direct investment (FDI) into the United States in 2020, total stock of Indian FDI in the United States reached $16.4 billion in 2024. India’s FDI in the United States sustains more than 70,800 U.S. jobs.
India is the United States’ tenth-largest trading partner, with U.S. goods and services worth $82.1 billion sold to India in 2024. The United States maintained its position as India’s largest trading partner, with $128.2 billion of imported goods and services. The United States is expected to continue its trade deficit with India in 2025.
U.S. companies are active participants in the Indian market across most sectors. However, the Indian government’s focus on fostering “self-reliance,” as a means of bolstering domestic businesses and employment, presents challenges for U.S. enterprises seeking to sell their goods and services to the India market. This is particularly evident in Indian government procurement, where heavy preference is given to domestically produced goods and services. As part of its self-reliance initiative, India has introduced various market access barriers in the form of tariffs and taxes, localization requirements, indigenous standard mandates, labeling practices, price controls, and import restrictions.
Despite market access concerns, India remains an attractive destination for many U.S. exporters. Many Indian conglomerates stand on par with their international counterparts in sophistication of operations and market prominence. In sectors like information and communications technology services, pharmaceuticals, and engineering, Indian companies are renowned for their ability to compete. U.S. companies operating in India emphasize that success requires a long-term planning horizon and the ability to adapt strategy to regional conditions. While complex and challenging, the Indian market offers significant opportunities for U.S. companies.
Political Environment
Please find information on the political environment in India at the State Department’s Countries & Areas website.