A tale of two tech giants: Looking to the future for US-India trade opportunities

India and the US are two countries perhaps defined by their digital and technological expertise, and the relationship between them is at an inflection point. Connections in capital, talent and tech are deepening, cultural ties ever more intertwined and a new wave of strategic partnerships are accelerating commercial cooperation.

Our latest US-India Corridor Report identifies how these drivers are catalysing opportunities for corporates in both countries, many of which mirror each other.

Investing in India’s tech sector: where are the growth opportunities for US companies?

India presents a compelling proposition for external tech companies. The country’s digital economy is one of the fastest growing in the world, currently sitting at 11% of GDP and on track to reach 20% by 2026. Indeed, Bain estimates India could reach a $1 trillion consumer internet economy by 2030¹. This shouldn’t come as a surprise when you consider that India has more than 700 million internet users, 350 million digital payment users and 220 million online shoppers.¹

The scale of recent investment by US tech giants speaks to the size of the opportunity: Google has committed $10 billion to India’s digitisation fund², while Amazon plans to invest $12.7 billion in cloud infrastructure by 2030.³

This vast digital ecosystem, with global players at its heart, presents multiple entry points to US companies. Perhaps the sector currently offering the greatest potential is B2C e-commerce. Growing at around 26% CAGR between 2022-2025, it has an estimated Gross Merchandise Value (GMV) of $120-130 billion in 2025. Other promising, though less developed, sectors to watch are edtech and healthtech, which are seeing CAGR of 26% and 41% respectively.⁴

The Indian semiconductors and electronics sector is another sizeable opportunity. Local demand is being driven by a rapidly expanding consumer electronics market, with the country on course to be the fifth largest consumer of electronic products globally by 2025.⁴

And as countries seek to diversify away from the traditional powerhouses of semiconductor manufacturing, China and Taiwan, India is moving to becoming a key player in the global semiconductor supply chain. Indian authorities aim to increase the size of its semiconductor market to $110 billion and account for 10% of the global semiconductor industry by 2030.⁵ The recent signing of the US-India Semi-Conductor Pact is building momentum behind these ambitions.

There are substantial opportunities too in India’s nascent EV sector, set to explode in value from $3.21 billion in 2022 to $114 billion in 2029⁶, and biotechnology, where the government has ambitions to make India one of the top five biotechnology hubs by 2025.

Trade relations in the tech space were given a further boost when Prime Minister Narendra Modi met with 15 tech CEOs during his US visit in September 2024. Highlighting the strides made by his country in technology and innovation, he encouraged US-based firms to “co-develop, co-design, and co-produce in India for the world".⁷

How can Indian companies make inroads into the US market?

India's established reputation in technology and IT provides a solid foundation for Indian companies looking to expand into the US. Major IT companies, such as Tata Consulting Services, Infosys and Wipro, have had a presence in the US for decades.

More recently, Indian talent has come to the fore in Silicon Valley. The CEOs of Microsoft and Alphabet are both Indian born, while 15% of start-ups and 11% of US unicorns were founded by entrepreneurs with Indian heritage.⁸ More broadly, 16 CEOs of Fortune 500 companies are of Indian origin, and these Indian-led companies generate around 5% (or $978 million) of total revenue.⁹ These success stories demonstrate to Indian companies and budding entrepreneurs, looking to expand into the US market, a clear pathway for growth.

The US administration's focus on high-priority sectors, such as semiconductors, offers significant collaboration and investment opportunities for Indian companies. US-based semiconductor projects in the pipeline to 2030 stand at $260 billion. California, Texas, Oregon and Arizona are hotspots in this sector.¹⁰

EVs and batteries are also high on the agenda. Huge investment is needed to reach the goal of EVs accounting for 50% of new US vehicle sales by 2030¹¹ – a prime opening for Indian battery manufacturers and suppliers of other products in the supply chain. India-based Epsilon has already announced plans to build a $650 million graphite anode manufacturing facility in North Carolina.¹² ¹³

Clean power is another area with big potential for growth. Specific reforms like the Inflation Reduction Act (IRA) aims to direct $400 billion of federal funds to clean energy projects, and prompt more investments.¹⁴ In terms of states to watch, California is leading the way in this area, with Texas, New York and Vermont offering significant opportunities.

New trade opportunities are also being created by a raft of US-driven joint technology initiatives. These include the initiative on Critical and Emerging Technology (iCET), the India-U.S. Defense Acceleration Ecosystem (INDUS-X) and the US-India Climate and Clean Energy Agenda 2030 Partnership.

These collaborative efforts spanning critical sectors, the increased promotion of research partnerships, and the strong cultural ties particularly in terms of the India diaspora in the US tech industry, together create a golden opportunity for cross-border investments and trade. This is a new era, defined by two technology titans building strategic partnerships and knowledge transfer that will play an important role in defining the global technology landscape.