For years, the U.S.-India relationship has been sold as a mutually beneficial “strategic partnership.” Trade agreements are marketed as balanced, offshoring is rebranded as economic modernization and the displacement of American workers is masked behind talking points about innovation and global cooperation.
But beneath this polished narrative lies a stark truth: The partnership has become a one-sided arrangement, heavily tilted in India’s favor, enabled by U.S. multinationals, Indian lobbying and economic misdirection.
The latest example comes from the India-based Global Trade Research Initiative or GTRI, which now claims the U.S. runs a $35-$40 billion trade surplus with India. This new characterization of the trade balance between the U.S. and India uses selective accounting tactics, such as counting offshore labor operations in India as American exports, while ignoring the long-term damage to U.S. wages, employment and innovation capacity.
The official U.S. trade deficit with India, as reported by the U.S. Bureau of Economic Analysis, remains substantial. In 2024, the United States recorded a $46.08 billion goods deficit with India, an increase from the previous year. While the Global Trade Research Initiative argues that this gap is offset by other revenue streams, such as student tuition payments, software exports, digital services and intellectual property royalties, these claims require closer scrutiny.
It’s true that India is a growing consumer of U.S. technology and services. In 2024, total U.S. exports of goods and services to India reached $82.1 billion, a 10.3% increase over 2023. But imports from India also rose to $128.2 billion, up 6.7%, widening the overall trade deficit to $46.1 billion.
Reframing the deficit
The Global Trade Research Initiative attempts to reshape this trade gap by including loosely associated or tangential revenue flows in its analysis, such as digital advertising income, licensing fees and revenues earned by U.S. companies operating in India.
While these revenues may appear in corporate accounting books, they often have little to no bearing on actual trade flows between the two countries. In many cases, the value is created and consumed entirely within India, booked through third-country tax jurisdictions and excluded from official trade statistics maintained by institutions such as the U.S. Bureau of Economic Analysis and the World Trade Organization. Therefore, including such figures in bilateral trade balance calculations not only violates established global trade accounting standards, it actively obscures the real asymmetry in the U.S.-India economic relationship.
This misrepresentation is not accidental; it is intentional and serves a high-stakes political objective.
As President Donald Trump intensifies efforts to reassert America’s economic sovereignty and address long-standing trade deficits, India faces pressure to open its markets, reduce tariffs and eliminate non-tariff barriers. In this context, reframing the deficit becomes a tactical necessity for India. By inflating U.S. gains through creative accounting, India seeks to portray the relationship as balanced, thereby neutralizing demands for reciprocity and delaying enforcement actions that would disrupt its export-driven model.
India has much to gain from maintaining this illusion of parity. It wants continued access to the U.S. market for goods and services, protection of its visa-dependent labor supply chain and uninterrupted flows of American capital, contracts and technology.
At the same time, it remains one of the most protectionist economies in the world, with high tariffs, opaque regulatory processes and a digital economy increasingly shielded by localization mandates and indigenous innovation schemes to become “self-reliant” India. GTRI’s economic spin is thus designed to protect this one-sided arrangement by misleading American negotiators, media and lawmakers into believing India is playing fair, when in fact it is extracting significant benefits while offering minimal concessions in return.
Indian Prime Minister Narendra Modi has explicitly attacked President Trump’s “protectionist” “American First” policies, saying “Many countries are becoming inward focused and globalization is shrinking, and such tendencies can’t be considered lesser risks than terrorism or climate change.” Meanwhile, India’s policies and budgets often include import duties to “provide adequate protection to domestic industry” and “promote creation of more jobs.” Critics have even remarked that India’s “Make in India” slogan has become, in effect, “Protect in India.”
According to Rick Rossow, former deputy director at the U.S.-India Business Council, India’s strategy has always been “pro-investment and anti-trade.”
By reframing the deficit through distorted metrics, India is not engaging in honest diplomacy; rather, it is executing a long-term influence strategy. And unless U.S. officials look beyond surface-level numbers and examine the underlying capital flows, labor displacements and regulatory asymmetries, the trade relationship will remain fundamentally unequal, hidden behind the illusion of balance.
Turning student spending into trade propaganda
One of the most egregious distortions in the Global Trade Research Initiative narrative is its treatment of Indian student spending in the United States as a form of “export revenue” contributing to a U.S. trade surplus.
According to GTRI, Indian students studying in America inject over $25 billion annually into the U.S. economy, $15 billion in tuition and $10 billion in living expenses. From this, they argue that education represents one of the most significant and undercounted U.S. “exports” to India. This is not only false, it’s a deliberate manipulation of established trade definitions.
At the heart of this argument lies a fundamental misunderstanding – or willful misrepresentation – of how global trade balances are measured. Under internationally accepted accounting standards used by the U.S. Bureau of Economic Analysis (BEA), the International Monetary Fund and the World Trade Organization, student spending is classified as “personal travel” or “consumption expenditure by nonresidents,” not as a commercial export of goods or services between nations. It is a private expense made by individuals voluntarily choosing to reside temporarily in the United States.
In other words, when an Indian student pays tuition at Purdue or rents an apartment in Ann Arbor, that is not India sending American money for a product. It is an individual participating in the U.S. economy, no different than a tourist buying a Broadway ticket or a foreign national eating at a restaurant in San Francisco. GTRI attempts to retrofit these personal financial decisions into a bilateral trade framework to fabricate a U.S. surplus where none exists.
Moreover, education-related travel is already captured in the BEA’s international transactions account under “Exports of Services: Travel (Education-Related)”, a line item that includes all spending by international students in the U.S. But even in this context, it remains a subset of consumer spending, not the kind of commercial export one would expect in a trade negotiation or tariff discussion. Including it as a central pillar of the U.S.-India economic relationship is both misleading and irrelevant to the structural trade imbalance.
GTRI’s framing also obscures the true cost of this education pipeline. While universities benefit from full-tuition international students, the broader American public does not. Indian students often use international F-1 student visas to secure U.S. work authorizations under Optional Practical Training (OPT) and STEM OPT loopholes, which allow them to work for up to three years post-graduation without being subject to employer-sponsored visa caps and labor protections.
From 2023 to 2024 there were a recorded 378,175 jobs that went to international students studying at U.S. colleges and universities. And according to the Pew Research Center, the OPT program has grown 400% from 2008-2016.
These programs, poorly monitored and exploited by multinational corporations, function as backdoor immigration channels that displace qualified American graduates in STEM and tech roles. So while universities gain revenue, the American workforce loses essential job opportunity.
If India, through its think-tank GTRI, insists on classifying student tuition payments as part of a U.S. trade surplus, then by that logic, the United States should equally account for the far larger and more impactful flows of capital into India – namely remittances, foreign aid and direct investment.
Indian students who often remit income earned during and after their education back to India contribute to a reverse flow of wealth. Once they secure employment under OPT or H-1B, their presence is frequently used by outsourcing firms to build long-term foreign labor pipelines, creating a net drain on U.S. job availability and wage growth.
In 2024 alone, India received approximately $129 billion in inward remittances, 28% of which came from the U.S. – the largest single remittance source for India’s economy. These outflows represent real earned income leaving the U.S. economy and directly bolstering India’s GDP. If India is going to distort trade logic by including private tuition payments as national income, then it must also reckon with the scale of wealth, investment and development subsidies flowing from the United States into India, none of which are ever acknowledged in GTRI’s conveniently narrow calculations.
Misclassifying offshoring as U.S. gains
In its attempt to reframe the U.S.-India trade deficit, the Global Trade Research Initiative also misleadingly counts revenue from Global Capability Centers (GCCs) operated by U.S. corporations in India as part of a supposed American “trade surplus.” This framing is fundamentally flawed. GCCs are offshore units – outsourced operations intentionally set up by U.S. firms to cut costs by shifting high-paying white-collar jobs from the United States to low-wage labor markets like India.
These centers do not generate export revenue or contribute to America’s GDP. Instead, they represent capital outflows, where U.S. companies pay Indian-based employees and infrastructure to perform work that would otherwise be done by Americans. Indeed, the very function of a GCC is to replace U.S. workers with cheaper foreign labor, often reducing labor costs by 50-80% per employee.
For instance, a $140,000 software engineering role in the U.S. is commonly offshored and replaced with a $45,000 job in India, a direct wage-suppression tactic that not only destroys American incomes and career paths, but also drains local economies of tax revenue and consumer spending.
But according to GTRI’s logic, because companies like Amazon, Microsoft, JPMorgan and Google generate digital services revenue from Indian-based Global Capability Centers, some of which may be booked in U.S. corporate accounts, that somehow constitutes a U.S. economic win. This is a fundamental misrepresentation of how GCCs function economically and why they are, in fact, a mechanism for capital outflow and labor arbitrage, not trade inflow.
While revenues may technically be booked in the United States, these centers do not drive American exports; rather, they displace American workers. They should be understood for what they are: job-exporting, wage-suppressing mechanisms that facilitate capital outflow, not trade inflow. U.S. multinationals have poured more than $300 billion into India over the past two decades, fueling Indian infrastructure, technology parks and manufacturing capacity. Framing them as contributors to a U.S. surplus is not only misleading; it conceals the very offshoring engine that is hollowing out the American middle class.
GTRI lumps in the gross revenues earned by U.S. digital giants (e.g., Google, Meta, Microsoft) in India without accounting for local cost and operations, revenue booking across jurisdictions and, most critically, the fact that many of these revenues are generated inside India, often through localized operations, content moderation centers and sales teams. In many cases, these companies reinvest heavily in India or engage in transfer pricing, whereby profits are booked in tax havens, not the U.S.
This maneuver lowers U.S. multinational enterprises’ (MNEs) tax jurisdictions while reducing the U.S. Gross Domestic Product and raising the host country’s GDP. The use of transfer pricing by digital giants to shift profits into low- or no-tax jurisdictions means revenue from Indian users may be booked in Ireland, Singapore or Bermuda, not the U.S. GTRI’s assumption that this revenue counts toward the U.S. trade surplus, citing $15-20 billion in revenue as part of the U.S. trade surplus, is factually incorrect and totally misleading.
In fact, a 2020 Congressional Research Service (CRS) report clearly outlined how digital services companies structure their international operations and why revenue earned abroad is not always taxable, reportable or traceable to the United States in a way that would qualify it as part of the U.S. trade surplus.
Yet, by presenting revenue as a “U.S. surplus,” GTRI implies that this money benefits the American economy. But as the Congressional Research Service notes, this revenue does not translate into U.S. tax gains or trade credit, especially when it’s routed through foreign subsidiaries. The CSR report also details a 2% “Equalization Levy” – India’s version of Digital Service Taxes (DSTs) – a fact undermining GTRI’s claim that the revenue constitutes a legitimate U.S. trade surplus. In fact, India doesn’t even view the activity as contributing to its own economy, let alone to the U.S. But the U.S. does not necessarily record those revenues as national income either, meaning neither country treats this revenue the way GTRI does.
The illusion of balance, the reality of betrayal
At its core, the Global Trade Research Initiative effort to recast the U.S.-India trade relationship as one of balance, let alone surplus, rests on economic sleight-of-hand, not statistical truth.
India’s campaign to redefine the trade deficit is not a misunderstanding; it is a geopolitical tactic.
As trade negotiations with President Trump intensify, India has every incentive to soften the numbers, obscure the imbalance and delay enforcement. Its overall goal, however, is not parity, but preservation for continued access to U.S. markets, expanded visa pipelines and unfettered flows of U.S. capital and technology, all while maintaining protectionist barriers and repatriating economic gains.
Meanwhile, American workers are left jobless, American innovation is offshored and America’s economic sovereignty continues to erode.
The U.S. must stop treating statistical propaganda as economic reality. GTRI’s manipulated data is not just bad math, it is designed to manipulate American lawmakers into surrendering leverage at the negotiating table. If America’s policy makers continue accepting these distorted narratives, they will not only fail to correct the trade deficit, but they will be compelling Americans to subsidize their own decline.