India Sees Less Urgency for US Trade Deal After Midterms

The outcome of the US midterm elections has reduced the urgency for India to strike a trade deal with Washington, but is unlikely to change the tariffs Indian exporters face, economists and analysts told Business Today, which reported the assessments on Thursday (Nov 5).

Democrats ended unified Republican control of Congress in the Nov 3 vote. Madhavi Arora, chief economist at Emkay Global Financial Services, said the result “probably will not change the tariff structure much,” but would alter President Donald Trump’s incentives, adding that the urgency of a deal for India had faded.

Tariffs stay in place

Indian goods currently face a 10 per cent Section 301 levy on top of normal most-favoured-nation duties, according to Business Today. A Press Trust of India (PTI) report on the Emkay note said an 18 per cent tariff rate under an earlier framework was never implemented.

CareEdge Ratings said in a note that it does not expect tariff relief from the new Congress, since the levies are set by the President. It added that a tail risk remains from the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed on Sept 18, which allows tariffs of up to 100 per cent on the largest buyers of Russian crude. An executive waiver issued on Oct 16 carries no expiry date, the report said.

Despite the duties, India’s merchandise exports to the US rose to US$50.81 billion in April–September 2026 from US$45.73 billion a year earlier, Business Today said.

Slower route to new tariffs

According to the PTI report, Emkay said any further US escalation would now have to pass through slower Section 301 and Section 232 investigations, lowering the risk of sudden tariff shocks. It said lower crude prices and a softer dollar support the rupee and India’s export outlook.

Emkay noted that Brent had fallen 19 per cent from its October highs to US$95 a barrel, while India’s oil import bill was up 24 per cent so far in the fiscal year with Brent averaging US$97.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said a midterm setback was unlikely to shift America’s protectionist direction, as both parties favour economic nationalism. He urged New Delhi to insist on enforceable reciprocal concessions and WTO consistency, warning that the pressure to announce a deal should not outweigh the need to secure one.

What’s next for Trade Deal

A US Trade Representative Section 301 investigation into excess manufacturing capacity in India and 15 other countries is continuing, and further tariffs are anticipated, Business Today reported. The President is expected to keep using Section 232 and Section 301 powers through executive orders, Treasury sanctions and USTR rules.

Emkay flagged Section 232 sector tariffs on pharmaceuticals and electronics as key risks, along with any setback in Russia or Iran diplomacy that renews pressure over India’s oil imports.

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