US President Donald Trump may have referred to India as a “dead” economy, but the numbers tell a different story. While the Indian economy is expected to slow down in the current fiscal amid the global uncertainties and tariff wars, most recent projections by economists and international agencies paint a fairly bright picture since they see India as the fastest growing large economy in the world with a 6 per cent plus growth rate.
Trump’s aggressive stance against India in his social media posts has also exposed an inconsistency in America’s stance and policy actions considering India and America have engaged together on several crucial initiatives, ranging from critical minerals, trade, defence and space after he took charge as the President in January.
The most recent collaboration between India and the US was seen last week as the Indian Space Research Organisation (ISRO) placed the NISAR satellite, a first-of-its-kind collaborative project between India and the US, into its intended orbit. NISAR, which stands for NASA-ISRO Synthetic Aperture Radar, is the most powerful Earth observation satellite to be put in space, the result of over one decade of research and development by the space agencies of India and the US. The collaboration is set to expand as ISRO is planning to launch the Block 2 BlueBird communications satellite, developed by the US-based AST SpaceMobile, over the course of next few months.
When Prime Minister Narendra Modi visited the US in February, the two countries announced.cooperation on several initiatives including the Transforming Relationship Utilizing Strategic Technology (TRUST) initiative — a bilateral initiative for cooperation in the recovery and processing of critical minerals such as lithium and rare earth elements. It was seen as a step towards reducing barriers to technology transfer, addressing export controls, and enhancing high-tech commerce. The TRUST initiative followed India’s induction into the US-led Minerals Security Finance Network in September last year. India had joined the Minerals Security Partnership in 2023.
A move towards stronger trade ties was also discussed in detail during Modi’s US visit, with the countries agreeing to double their bilateral trade to $500 billion by 2030. India’s trade relationship with the US has already been strengthening. In 2024, the total goods trade between the two nations stood at $129.2 billion, with the US’ exports to India rising 3.4 per cent to $41.8 billion, while its imports were up 4.5 per cent at $87.4 billion, resulting in a deficit of $45.7 billion for the US.
India’s rising exports of electronic goods, especially smartphones, to the US have been in focus. India’s share in US’ smartphone imports surged to nearly 36 per cent in the first five months of 2025, driven mainly by Apple’s iPhones, from about 11 per cent in 2024. China, which continues to dominate the category, saw its share drop from 82 per cent to 49 per cent over the same period. Roughly 20 per cent of Apple’s global iPhone production capacity is now based in India.
Trump’s often-cited charge against India has been of it being a ‘Tariff King’, and India in response has made a conscious effort to broadcast the message that it is not. In the Union Budget for 2025-26, presented in February, duties on the top 30 US goods imported by India, including crude oil, LNG, coal, diamonds, aeroplanes, and motor vehicles, were reduced. In the automobile sector, India lowered tariffs on motorcycles based on engine capacity. Finance Minister Nirmala Sitharaman has also highlighted the same, pointing out last month that India has reduced the tariff rates to eight, including the zero per cent rate.
Modi and Trump had also agreed to renew the 10-year defence framework, with the American President having mentioned increasing military supplies to India and ultimately providing the F-35 stealth fighter. The two leaders had announced plans to pursue new procurements and co-production arrangements for Javelin anti-tank guided missiles and Stryker infantry combat vehicles and six additional P-8I maritime patrol aircraft. Earlier this month, an official statement said India and the US will sign a new 10-year defence partnership framework when Defence Minister Rajnath Singh and his US counterpart, Pete Hegseth, meet later this year.
Bright spot, not dead economy
While there are some downside risks to the Indian growth story from Trump’s threat of a 25 per cent tariff on Indian goods and a ‘penalty’ for its energy and arms imports from Russia, even a 20-40 bps decline in the growth rate to 6 per cent or so will not stop the economy from being the fastest growing large economy in the world. This is evident in the growth projections made by prominent global rating and multilateral agencies. Last week, the International Monetary Fund (IMF) raised India’s GDP growth forecast to 6.4 per cent for both 2025-26 and 2026-27 after it had cut the projection for the current fiscal by 30 bps to 6.2 per cent in April. The Reserve Bank of India (RBI) also has predicted growth for FY26 to be stable at 6.5 per cent – the same as in the last fiscal. Meanwhile, the Finance Ministry estimates growth to be in the range of 6.3-6.8 per cent, saying in its latest monthly economic review report that the economy presents a picture of “cautious optimism” in the face of global headwinds marked by trade tensions, geopolitical volatility, and external uncertainties.
To be sure, the Finance Ministry has flagged slow credit growth and the private sector’s investment appetite as issues. But these hardly make an economy ‘dead’ — especially one which the IMF estimates as the fifth-largest in the world with a GDP of $3.9 trillion in 2024. And it’s only going to get better — by 2028, the IMF expects India to overtake Germany and Japan and rise to the third spot, only behind the US and China.
While Trump called both India and Russia as “dead economies”, the latter is a different animal altogether. Unlike India’s, the Russian economy has suffered from its war against Ukraine, with GDP growth averaging 2.2 per cent from 2022 to 2024, per IMF. This is even lower than the US’ average growth rate of 2.7 per cent over the same period. The figure for India, meanwhile, is 7.8 per cent.
American frustrations, inconsistencies
Trump’s comments, the imposition of a 25 per cent tariff on India, and an as-yet unspecified penalty — even as officials from the two countries are negotiating a bilateral trade deal — is being viewed as Washington putting pressure on New Delhi to quickly come to an agreement. US Treasury Secretary Scott Bessent has admitted as much, saying on Thursday that Trump and the American trade team were frustrated by the pace of talks with India.
“India came to the table early. They have been slow-rolling things, so I think that the President, the whole trade team is frustrated with them,” Bessent told CNBC.
However, just like the US, India has a duty to its people and must get the best possible deal. As Commerce Minister Piyush Goyal said in the Lok Sabha on Thursday, the government will take “all necessary steps to secure our national interest”.
US President Donald Trump (Reuters) 
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