Energy, aviation sectors to lead US imports to India under $500-billion plan

Prime Minister Narendra Modi and US President Donald Trump during Modi's visit to the US in 2025. (File photo)

• India plans $500 billion in US imports and investments over five years
• Boeing may see $80 billion in orders, mainly for civil aviation
• First tranche of trade deal to lower tariffs on Indian goods to 18 percent

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The United States is expected to meet about 25 percent of India’s total import and investment-linked requirements over a five-year period, with New Delhi’s proposed $500-billion sourcing plan from the US tied to specific sectors, including $80 billion linked to Boeing alone.

India’s overall purchases in sectors such as energy, large-scale data-centre equipment and information and communications technology (ICT) products such as semiconductors are projected to rise from around $300 billion at present to nearly $2 trillion over the next five years.

“We will need large volumes of energy, large number of data centres equipment, ICT products… what we will need from the US, we can do a figure of at least $500 billion over the next five years,” commerce and industry minister Piyush Goyal said.

Energy supplies, aircraft and aerospace systems and specialised industrial and defence manufacturing would be the other sectors.

Civil aviation is expected to be one of the largest components, with aircraft orders already placed and in the pipeline with Boeing estimated at $70–80 billion, potentially crossing $100 billion once engines, avionics and long-term maintenance contracts are included, the minister added.

Other major contributors include energy imports such as crude oil and LNG, digital and data infrastructure including servers, semiconductors and networking equipment, and high-end industrial and defence platforms, sectors where US firms have strong technological advantages.

Commerce secretary Rajesh Agrawal said India’s current purchases in these sectors already exceed $300 billion overall and is expected to expand rapidly in the next five years.

“Next five years, these purchases will be $2 trillion. If we are able to buy $500 billion from the US, it will only add to our diversification and resilience in our supply chains,” Agrawal said.

“Data centres have been given huge concessions in the Budget. Now imagine if we attract $100–150 billion in data-centre investment, we will obviously need equipment for these data centres," Goyal said.

The minister, however, clarified that the trade deal does not contain any investment commitment.

The $500-billion figure entered the discussion after President Donald Trump on February 2 said India had committed to investments of that scale in the US. New Delhi later clarified it was an estimate of cumulative purchases and investments spread over a five-year period.

India and the United States announced this week that they have agreed to a first tranche of a bilateral trade agreement, which would lower tariffs on Indian goods to 18 percent from 50 percent.

Both sides are working to finalise the joint statement for the agreement, ahead of signing the first tranche around mid-March.