India-US trade deal: What do midterm elections mean for trade policy, customs and export sectors? Experts explain | Today’s news

As India and the US work to finalize a long-awaited trade deal, the ruling Republicans’ landslide electoral defeat in the recently concluded US midterm polls has raised crucial questions: How might this U.S. congressional turn affect India-US negotiations? Will the failure of US President Donald Trump’s party give India room to negotiate?

Experts believe the GOP’s stinging loss in the midterm elections, which shifted the balance of power in the US Congress, may push Trump to speed up talks that have reportedly been stalled over concerns about tariffs. But that may not make “US trade policy less restrictive,” they said.

Another expert explained why India may gain some room to negotiate on “substance rather than deadline pressure”.

Read also | US midterm election results: What does Trump’s loss mean for the India-US trade deal?

“India will get space to negotiate…”

Professor Rituparna Kaushik, assistant professor at FLAME University, told Mint that the midterm election results will not rewrite US trade policy overnight.

That’s because “the obligations under Section 301 and Section 232 (under which the tariffs were imposed) rest with the executive branch and any rollback faces a presidential veto,” he said.

He believed that a democratic Congress with vetting powers “makes a sudden escalation of tariffs politically more difficult, giving India room to negotiate on substance, not under deadline pressure”.

“Labor-intensive exporters of textiles, apparel, gems and jewelry will benefit the most from this stability,” he said.

Read also | What is Section 301? Why Jaishankar says US trade probe could affect deal

“India must continue to diversify”

On India’s strategy, Kaushik said Delhi must “ensure a predictable rules-based tariff plan rather than chasing short-term concessions and extending engagement beyond the White House to Congress and US states.”

“At the same time, India must continue to diversify through an agreement with the EU and other partners, so that the US remains a key market, but not the only point of vulnerability. In agriculture and dairy, India should be firm as pressure from the US farm lobby crosses party lines,” he added.

Trump ‘may push for early India-US trade deal’

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said on Friday that the “bad” results of the midterm elections may push Trump to focus more on trade talks and fast-track a proposed deal with India.

“I think the bad election results will push Mr. Trump to speed up trade relations with India and he may speed up this trade deal. It may happen sooner than we think,” he told ANI.

Read also | Goyal says the India-US trade deal will show that farmers’ interests are protected

According to Srivastava, as Trump faces domestic political constraints, he may seek an early trade deal with India to demonstrate his influence on the international front.

“With Trump weakened on the home front, he will only have trade to focus on and I think he will push for an early trade deal between India and the US,” he said.

Midterm results ‘will not make US trade policy less restrictive’

While Trump’s domestic political setback may accelerate efforts to conclude an India-US trade deal, the Global Trade Research Initiative (GTRI) expects Washington’s broader protectionist trade approach to remain largely unchanged.

In its latest report, GTRI warned that a mid-term setback would not necessarily make US trade policy less restrictive.

Srivastava indicated that the threat of additional US tariffs linked to Indian purchases of Russian oil could remain a bargaining chip for Washington.

He told ANI that the US could use the threat to encourage India to sign the proposed trade deal and potentially impose additional tariffs of around 17-19 percent rather than the much higher level that had been mooted earlier.

Read also | India-US trade deal to be finalized in ‘next few months’? Gor offers a hint

Srivastava claimed that senior officials and ministers from both countries were involved in discussions and that negotiations were close to completion, although some differences remained.

He said the proposed Graham Act had previously led to expectations that the US administration would take about 60 days to make a decision on the matter. Given that some of that time has already passed, he expects the business deal to close in about two months.

India-US trade deal talks: Why they’ve stalled, what’s at stake

In February, India and the US agreed on a framework agreement that reduced punitive tariffs on most Indian goods to 18 percent from 50 percent imposed in August last year.

Meanwhile, the US Supreme Court struck down Trump’s use of emergency powers to impose sweeping tariffs worldwide, leading to a 10 percent base rate. However, a final agreement between the world’s two largest economies remains elusive.

In recent months, India-US talks have faced complications, most recently a new US law that paves the way for up to 100 percent tariffs on Indian goods due to New Delhi’s purchases of Russian oil.

The deal has also been delayed because Washington has yet to complete a Section 301 trade investigation into several countries over alleged industrial overcapacity, Reuters reported on the 6th.

The probe is to assess whether such overproduction hurts or undercuts American industry. If this probe is not completed, it is difficult to say what final tariff will attract Indian goods, the report added.

External Affairs Minister S Jaishankar said earlier in September that the talks had reached a broad understanding, but the ongoing Section 301 process remained an important factor in deciding when to finalize the deal.

What do India and the US want? India sought to keep dairy products, poultry, rice, wheat and other agricultural products out of the scope of market opening commitments. He wants more certainty about US tariffs before making concessions.

The Trump administration wants India to curb purchases of Russian oil, arguing that India’s purchases of Russian oil help finance the war in Ukraine.

What’s at stake: The US is India’s largest export market. Analysts earlier told Reuters that in the absence of a trade deal, India risks higher US tariffs from an ongoing trade investigation and purchases of Russian oil, although it could negotiate exemptions under the sanctions law.

Further tariff hikes could hurt businesses, dent market sentiment and hurt India’s currency, which is already trading near record lows.

In 2025, India’s total merchandise exports to the US reached USD 103.82 billion, while US exports to India were around USD 45.6 billion, for a total bilateral trade of USD 149.42 billion, ANI reported.

Bilateral trade in services in 2025 was recorded at $92.23 billion, with India exporting services worth $48.67 billion to the US and importing services worth $43.56 billion from the US.

2026 US midterm election results

Democrats officially won full control of both houses of the US Congress in the November 3rd midterm elections. The historic shift ends the GOP’s unified control of Washington and deals President Donald Trump a major political setback midway through his term.

Democrats last won a majority in the Senate in 2022 before Republicans won control of the chamber in 2024.

The victory will have implications for controlling Washington as Trump enters his final two years in office.

With a majority, Democrats can block the president’s nominees and control what measures get floor votes, severely limiting his ability to get anything done legislatively.