Trump said US trade was incentive for ceasefire. But is it that important to India or Pak?

India Today

16-05-2025

US President Donald Trump has repeatedly claimed that he brokered the ceasefire in the recent India-Pakistan conflict, stating he used trade as either a threat or a sweetener for the deal, depending on which day he made the statement.'I said [to the Indian and Pakistani leadership], let's stop it. If you stop it, we're doing trade. If you don't stop it, we're not going to do any trade,' Trump told reporters at the White House on May 12. Since then, he has repeated variations of this statement to highlight how trade was both carrot and stick.advertisementBut would trade have been an important incentive for India or Pakistan? Also, can the US afford to stop trade with either country? Here's a look at what the numbers say:Rising trade with IndiaBilateral trade between India and the US has increased steadily in the last two decades, but mostly over the past 10 years. In 2016, the total trade between both countries was worth $69 billion, which increased to about $130 billion in 2024, with the share of US trade in India's total trade hovering around eight per cent.Over the past two decades, Indian imports from the US have risen steadily. In 2005, India imported goods and services worth $8.2 billion from the US. This increased fivefold to about $42 billion in 2024, according to the Office of the United States Trade Representative (USTR).advertisementIndia's exports to the US have also seen a substantial rise during this period. In 2005, India exported goods worth $16.5 billion to the US, which rose to around $87 billion last year, up 4.5 per cent ($3.7 billion) from 2023, according to India's Ministry of Commerce and Industry.Last year, the US was India's biggest export market, making up about 18 per cent of India's $434 billion exports. The US is also India's fourth-largest importer — almost six per cent of India's $698 billion imports, according to the United Nations COMTRADE database.In 2024, the top goods imported from the US by India were oil and gas, manufactured goods, coal and petroleum gases, aerospace products and parts, and basic chemicals. Aerospace products have seen a significant increase because of India's expanding aviation sector. India's main exports to the US include pharmaceuticals and medicines, manufactured goods, IT equipment, apparel and textile furnishings, and gems and jewellery. Pharmaceuticals have consistently been a major export category, with significant growth over the years.All these make India a significant trading partner for the US. India was among the top 10 markets for the US last year, accounting for about 2.4 per cent of total US trade flow. India also accounted for about 2.7 per cent of total US imports and around two per cent of exports.advertisementConsidering how Trump's tariff threats have strained US trade relations with some of its top trading partners, such as China and Canada, over the past few months, the US may be wary of cutting off trade with India.US-Pakistan trade tiesThe United States and Pakistan have a more varied trade pattern. In 2016, US-Pakistan trade amounted to a little under $6 billion, rising to almost $10 billion in 2022, but falling to an estimated $7.3 billion in 2024.During this period, the US share in Pakistan's total trade flows ranged between seven and nine per cent. Conversely, Pakistan's share in total US trade has hovered around 0.1 per cent. The US goods trade deficit with Pakistan was $3 billion in 2024, a 5.2 per cent increase ($147.9 million) over 2023, according to the Office of the United States Trade Representative.Over the past two decades, Pakistan has marginally improved its trade relations with the US. In 2005, Pakistan's imports from the US amounted to $1.2 billion, peaked at almost $3 billion in 2018 and fell to about $2 billion last year. However, the share of US imports has remained relatively small, making up only about three per cent of Pakistan's total imports.advertisementOn the other hand, Pakistan's exports to the US have shown an upward trend over the same time. In 2005, Pakistan exported $3.3 billion worth of goods to the US. This increased to over $5 billion in 2024, accounting for 17 per cent of total exports, making the US Pakistan's top export market.Pakistan's top exports to the US are primarily concentrated in the textile and apparel sector. This includes house linens, cotton textiles, and knitwear. Its main imports from the US include raw cotton, a crucial input to Pakistan's textile industry, machinery, scrap iron, and agricultural products like soybeans.Tune InTrending Reel