Why India’s $500 billion import ambition from the US may be hard to achieve

Defence, energy, technology, and electronics are among the key segments for imports.

• Emkay Global: India's $500B US import target in 5 years is unrealistic.
• Imports may reach $125-140 billion annually by FY31, driven by gradual ramp-up
• Key growth areas include defence, energy, technology, and electronics imports

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India’s intent to import goods worth $500 billion over 5 years looks more aspirational than realistic, according to Emkay Global. The math doesn't add up, the brokerage noted, saying India’s imports from the US in FY26E were roughly around $50 billion.

To hit $500 billion in 5 years, imports must average $100 billion per year, which is almost two times current levels, which must be further sustained every year going forward. The imports are to include purchases of US energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next five years.

India and the United States will significantly increase trade in technology products, including GPUs and other goods used in data centres, and expand joint technology cooperation.

However, according to Emkay's calculations, India’s imports from the US could rise to ~$125-140 billion per year by FY31 (~20 percent CAGR), driven by phased, category-driven ramp-up.

Why the $500 billion target looks stretched

According to Emkay, the math doesn't add up. To hit $500 billion in five years, imports must significantly be ramped up to two times current levels per annum.

Aircrafts are the biggest visible ticket item, India has around 200 Boeing airplanes as of today. Emkay posited that even if another 200 planes were added at $300 million each, that is only $60 billion over five years. "This assumes airlines buy only Boeing, which is unrealistic given Airbus competition and commercial considerations," added the brokerage.

Further, such a target implicitly assumes some form of policy push over private airline and corporate sourcing decisions, which is neither easy nor efficient, said Emkay.

A more realistic ramp-up

In an optimistic scenario, India’s imports from the US could rise to around $125-140 billion annually by FY31, which implies a CAGR of roughly 20 percent. This would be driven by gradual sourcing shifts, instead of  an overnight jump.

Crude oil

The US currently accounts for 7 to 8 percent of India’s crude imports (about $7.6 billion in FY26TD), compared to 32-34 percent from Russia.  Some diversification toward US crude is feasible, which can potentially lift the share to 10-12 percent. This would translate to $17-18 billion at current prices (versus roughly $10 billion in FY26E).

Full substitution remains unlikely, as US crude is lighter than Urals, while heavier alternatives, such as Venezuela's crude, would be more suitable. However, this depends on supply recovery.

Natural gas

Natural gas is one of the easier categories to scale. The US is already India’s second-largest LNG supplier (around 11 percent share; ~$1 billion in FY26TD), with ~75 percent YoY growth in FY25.

As India targets LNG at ~15 percent of its energy mix by 2030 (from 6-7 percent currently), imports from the US could realistically rise to $6-7 billion by FY30, which implies a ~30 percent CAGR, with pricing broadly comparable to Middle Eastern supply.

Defence

This segment is a genuine high-growth lever. India’s defence imports, currently at $10-15 billion annually, could rise to $20-30 billion over the next five years as modernization accelerates.

If the US captures 60-70 percent of this incremental demand, it would translate to $15-20 billion per year of imports from the US.

Machinery and capital goods

Currently around $5 billion (roughly 8 percent of India’s total imports from the US). With higher technology transfers, greater localization by US firms, and support from the domestic capex cycle, this could rise to $10-12 billion over the next five years.

Electronics

Imports from the US are estimated at $5-6 billion in FY26E, spanning semiconductors, industrial electronics, telecom equipment, and consumer electronics. With China+1 diversification and potential easing of restrictions on high-end chip access, this could become a high-growth category, plausibly rising to $20-22 billion over five years.

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