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The economic relationship between the United States and India represents one of the most significant partnerships in the global marketplace. India’s economy is $1.560 trillion based on purchasing power and is the 5th largest in the world. The trade between the U.S. and India is significant, with the U.S. being India’s largest trading partner. The mutual interest between the countries ranging from technology, manufacturing, and service industries between these two democracies continue to deepen. For businesses on both sides, the potential is immense.
Indian companies looking to enter the U.S. market can benefit from the economic development incentives offered by states and municipalities eager to attract foreign direct investment. These incentives often favor companies that are willing to invest in local infrastructure, create jobs, and contribute to the American economy. As a result, Indian firms that align their strategies with these objectives stand to gain significant advantages. However, U.S. economic development incentives are not all standardized and vary from state to state, county to county and city to city. Trying to navigate this from afar is not recommended. It’s not as simple as getting a meeting. It requires many meetings over many different agencies and departments and, above all, requires patience.
The development of localized business operations is not solely about accessing incentives. It positions companies closer to key partners and customers that prioritize localized supply chains for reasons of speed, reliability, and strategic collaboration. Whether in logistics, materials sourcing, or intellectual property management, having a physical presence enables deeper integration with other companies seeking U.S. domestic solutions and partners aligned with their localization goals.
American companies should continue to explore strategic relations with Indian companies to assist in supplementing key technology gaps like IoT solutions, which Indian companies excel at, and to tap into one of the world’s fastest-growing consumer bases. India’s emphasis on digital transformation, infrastructure development, and clean energy offers significant opportunities for U.S. firms in sectors such as technology, logistics, and energy.
As the world closely monitors US-India trade discussions, it is vital for businesses to remain informed. Government to government talks shape the framework for tariffs, regulatory standards, and market access- all of which directly impact the ease of doing business. In particular, current discussions surrounding the Generalized System of Preferences (GSP), digital services taxes, data localization, and intellectual property rights require close attention. Businesses need to assess how upcoming policy shifts might affect their operations, compliance requirements, and overall strategy.
Importantly, the administration’s “Build America, Buy America” policy, though protectionist in spirit, does not necessarily exclude foreign participation. Indian companies that establish manufacturing operations in the U.S. and source materials domestically may qualify for federal contracts and incentives. This provides a clear path for Indian enterprises to contribute to American industrial growth while securing a foothold in the lucrative U.S. market.
Ultimately, economic development incentives are awarded not based on nationality, but on commitment. Companies willing to invest in innovation, workforce development, and sustainable operations are most likely to benefit. Trying to navigate the U.S. economic incentive, real estate and regulatory landscape requires local experts and time and resources. The greatest failure of developing a business is relying on a “friend of a friend” or going it alone. International business requires patience, commitment and making decisions based on facts, not assumptions.
In this evolving trade environment, the US-India corridor stands as a beacon of opportunity. Forward-thinking companies on both sides must leverage this moment to foster innovation, economic growth, and shared prosperity.
About the author
Gary Sumihiro is the founder of Sumihiro Investments LLC, a global strategic advisor, and board member of several companies. Recently, Sumihiro Investments entered into a strategic relationship with EDGE Partners LLC. For more information about Sumihiro Investments and EDGE Partners see the linked article.