Indo US BTA: A strategic crossroad for services sector of both economies
Nevertheless, while both nations work for a bilateral trade agreement (BTA), the forward road is full of strategic opportunities and policy difficulties.
Synergies in digital services between India and the United States
India’s total service exports increased by 13.6% in 2024-25 financially to 387.5 billion dollars, and its exports to the United States reached 33.2 billion dollars; It was managed by IT Services ($ 20 billion), Professional Services (10 billion dollars) and BFSI (Banking, Financial Services and Insurance) Export (2 billion dollars). On the contrary, the United States exported $ 25.9 billion to India, primarily from financial and consulting exports, with a surplus of 102 million dollars.
In particular, the digital services sector reflects a symbiotic relationship between the two countries. India Today is one of the leading countries of the third largest starting center and global Saas businesses. There is a deep organic relationship between Indian and US technology businesses, 60% of the total investments in Indian initiatives in 2020 come from US investors. In general, US investors were part of 75%of the agreements, followed by Singapore -based investors (15%) and Japanese investors (10%). Moreover, large global US technology businesses, such as Alphabet and Meta, increased their assets in India, which made it its second base (or the basis of Asian operations) for most of the product development and marketing activities.
Friction points: tariffs, taxes and technological tensionsUnfortunately, there was no trouble -free sailing because it brought fresh winds for BTA AS2025. In April, the US brought a 26% tariff for certain sectors – mainly technology and electronics. India’s decision to remove 6% equalization tax (digital service tax) recently is seen as a conciliatory gesture to support the BTA process, but teething problems still continue. For example, the main differences in data protection frames-the US consumer and market-oriented approach to the more state-based model of the India-Market. Alignment can increase trading by 15% ($ 2.25 billion) by 2030.
Visa policy is another painful point. The current visa limits are $ 800 million losses and BFSI exports face the US regulatory barriers. A DTO study shows that the negotiation of a 20% increase in H-1B visa quotas can increase India’s 10 billion dollars of mode 4 exports of Mode 4, and mutual BFSI market access can fold the BFSI exports of 2 billion dollars by 2030.
Addressing the dragon in the room
Most of these obstacles have historically perceived each other as competitors in digital technology and services. However, BTA is beneficial when both countries face a greater challenge in the form of China.
The US national strategy for critical and developing technologies (2020) recognizes China as a major threat in the field of technology. The US is actively trying to disperse from China on all fronts; from manufacturing to new technologies.
Most of the first phase of the Indian technology starting ecosystem were developed by investments made of Chinese sources such as Alibaba, Tencent or Didi Chuxing. However, over time, there has been a conscious change by the Indian government to leave the Chinese influence, which includes the prohibition of some Chinese service providers.
Chinese technology companies expand to Latin America and Africa in an aggressive way, offer packaged solutions, low -cost hardware and subsidized services. China is also rapidly emerging as a major technology innovative in new era technologies such as AI. These developments threaten the commercial interests of both India and the United States.
India and the United States, AI, quantum information process, semiconductors and wireless telecommunication areas between the two countries in the fields of complementarity, trying to benefit from the previous US administration of the United States -Histanus -Channel -India Initiative (ICET) signed a critical treaty. This initiative, which is critical for both countries to resist Chinese developments, should now be encouraged by a BTA that helps realize the specified goals.
A new perspective for BTA: from competitors to allies
Indo BTA among the global leaders in services is no longer related to the grass war between competitors. Now it’s more about investigating the competition from China. Businesses are currently more ally to the idea (as can be seen from the degree of integration); Authorities need to encourage this.
