World

US Midterm Losses May Speed India‑US Trade Talks, Experts Say

By Akriti Anand

India and the United States are working to finalise a long‑awaited trade agreement, but the Republican Party’s significant defeat in the recent U.S. midterm elections has raised questions about how the shift in congressional power will affect negotiations. Experts suggest that the loss could prompt President Donald Trump to accelerate talks that have stalled over tariff concerns, although it may not make U.S. trade policy less restrictive.

Professor Rituparna Kaushik of FLAME University told Mint that the midterm results will not instantly rewrite U.S. trade policy. She explained that Section 301 and Section 232 duties, under which tariffs were imposed, are based on executive authority and any rollback faces a presidential veto. A Democratic Congress, she said, makes abrupt tariff escalation politically harder, giving India room to negotiate on substance rather than under deadline pressure. Kaushik noted that labour‑intensive exporters in textiles, apparel, and gems and jewellery stand to benefit most from stability.

Kaushik advised New Delhi to secure a predictable, rules‑based tariff schedule instead of chasing short‑term concessions, and to broaden engagement beyond the White House to Congress and U.S. states. She also urged India to diversify through the EU agreement and other partners so that the U.S. remains a key market but not a single point of vulnerability. On agriculture and dairy, she said India should hold firm, as U.S. farm‑lobby pressure cuts across party lines.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said the midterm setback could push Trump to focus more on trade negotiations and fast‑track the proposed agreement with India. He believes that with domestic political constraints, Trump may seek an early trade deal to demonstrate his influence internationally. Srivastava cautioned that Washington’s broader protectionist approach is likely to remain largely unchanged. He noted that the threat of additional U.S. tariffs linked to India’s purchases of Russian crude oil could remain a negotiating tool, potentially imposing tariffs of around 17–19 percent rather than the higher levels previously discussed.

Srivastava said senior officials and ministers from both countries have been engaged in discussions and that negotiations are close to completion, although some differences remain. He indicated that the proposed Graham Act had earlier led to expectations that the U.S. administration would take about 60 days to decide on the matter. With some of that period already elapsed, he expects the trade agreement to be concluded within approximately two months.

India and the U.S. agreed to a framework for the deal in February, reducing the punitive tariff on most Indian goods from 50 percent to 18 percent. In the meantime, the U.S. Supreme Court invalidated Trump’s use of emergency powers to impose sweeping tariffs globally, leading to a 10 percent baseline rate. A final deal between the two economies remains elusive.

Recent complications include a new U.S. law that paves the way for up to 100 percent tariffs on Indian goods due to New Delhi’s purchase of Russian oil, and the U.S. has yet to complete a Section 301 trade investigation on several nations over alleged excess industrial capacity. The probe will evaluate whether such overproduction is hurting or undercutting American industries. Until the probe is finished, it is hard to determine the final tariff Indian goods will attract.

External Affairs Minister S. Jaishankar said earlier in September that negotiations had reached a broad understanding, but the continuing Section 301 process remained an important factor in deciding when to finalise the agreement.

India has sought to keep dairy, poultry, rice, wheat and other farm products outside the scope of market‑opening commitments and wants greater certainty over U.S. tariffs before making concessions. The Trump administration wants India to cut Russian oil purchases, arguing that Indian purchases of Russian crude help finance the war in Ukraine.

The U.S. is India’s largest export market. Analysts warned that in the absence of a trade deal, India risks higher U.S. tariffs from the ongoing trade probe and purchase of Russian oil, even if it could negotiate waivers under the sanctions law. Another increase in tariffs could hurt businesses, dent market sentiment and affect the Indian currency, which is already trading close to record lows.

For 2025, India’s total goods exports to the U.S. reached $103.82 billion, while U.S. exports to India totaled approximately $45.6 billion, for a total bilateral trade of $149.42 billion. Bilateral services trade in 2025 was recorded at $92.23 billion, where India exported $48.67 billion worth of services to the U.S. and imported $43.56 billion worth of services from the U.S.

Democrats officially won full control of both chambers of the U.S. Congress in the November 3 midterm elections, ending the Republican Party’s unified control in Washington. This historic shift delivers a major political setback to President Trump midway through his term. With the majority, Democrats can block the president’s nominees and control what measures receive votes on the floor, severely limiting his ability to get anything done legislatively.