'India's US trade surplus contrasts BRICS deficits': Economist warns weakening ties may cost jobs
India’s trade relations with BRICS nations and the United States are diverging sharply, raising difficult policy choices for New Delhi at a time of heightened global trade tensions.
In a post on X (formerly Twitter), Trinh Nguyen, Senior Economist specialising in Emerging Asia at Natixis, wrote, “For BRICS, India is the big DEMAND market — they sell more than they import, as in they have a surplus. For the US, India is the supplier — they sell more than they import. Trump threatening 50% tariff on India (25% reciprocal + 25% for Russian oil import) makes Modi turn towards Russia and China and BRICS to solve the crisis.”
Nguyen noted that India plays a distinct role in the BRICS grouping — as an absorber of supply due to its vast domestic demand. “For example, India exported $5 billion to Russia in 2024. If the goal is to grow it 50% in five years or by 2030, then we are looking at an export market of $7.5 billion. Meaning, the role of India in BRICS is the absorber of supply with its demand, hence the trade deficits with everyone except Egypt,” she explained.
The trade data underscores this divide. According to Natixis-CEIC figures up to June 2025, India consistently ran large and widening trade deficits with BRICS countries — particularly with China, Russia, and the UAE. In contrast, its trade balance with the United States remained positive and growing, offering India a crucial export market.
Nguyen cautioned that diversifying export markets and lowering trade barriers are sensible strategies, but turning away from the US could prove painful. “Meanwhile, there will be a lot of job losses in labour-intensive sectors, a sector that actually is already underemployed,” she warned.
Comparing India with Vietnam, Nguyen observed that while Vietnam sees tariffs as an existential threat, India’s self-perception as a rising regional power with strong domestic demand gives it more leeway. However, she warned this comes at a cost: “That means that rural people or low-skilled workers will face very difficult times ahead even if tariffs themselves have limited impact on financial markets and the economy.”
The chart makes clear that India’s trade surplus with the US has steadily expanded over the last two decades, while its deficits with BRICS nations, led by China, have deepened significantly since 2018. This structural asymmetry highlights India’s unique position: a net supplier to the US and a net demander within BRICS.
Nguyen concluded by noting that Prime Minister Narendra Modi appears to have made a strategic choice. “Difficult choices ahead and I believe Modi has chosen, similar to what I wrote in the India Times op-ed,” she said, promising a longer economic analysis in the coming days.