India-US trade deal: What midterm elections mean for trade policy, tariff and export sectors? Experts explain

Republican losses shifted the balance of power in Congress without immediately rewriting US trade policy. Experts believe the setback could encourage President Donald Trump to finish the India-US agreement faster. He may want an international achievement while facing greater domestic political constraints.

The bargaining environment could also become steadier. Professor Rituparna Kaushik said congressional oversight makes abrupt tariff escalation politically harder. That could let India negotiate the substance of a predictable tariff schedule instead of accepting concessions under deadline pressure. Labour-intensive exporters could benefit from greater stability.

The broader US approach is still expected to remain restrictive. Ajay Srivastava said Washington might continue using tariff threats linked to India’s purchases of Russian crude oil. The election result may therefore speed up negotiations without removing pressure. India is advised to engage Congress and US states, while diversifying through the European Union and other partners.

US midterm elections are congressional elections held during a president’s four-year term. Voters choose members of the House of Representatives and, in some contests, the Senate. They do not elect a new president. The results can therefore change Congress’s political balance without changing the White House.

A new congressional majority can control committees, hold hearings, request information, and scrutinise administration decisions. In the article, a Democratic Congress is described as having oversight powers that could make abrupt tariff escalation politically harder. This creates pressure on the president even when executive authority remains important.

That distinction matters for India’s negotiations. The midterm result may encourage Trump to accelerate a trade agreement, while Congress constrains sudden policy shifts. It does not automatically remove existing tariffs or make US trade policy less restrictive. India may gain room to negotiate on substance, but Washington can still use tariffs as leverage.

Section 301 is a US trade authority used to respond to unfair or discriminatory foreign trade practices. Section 232 allows action when imports are judged to threaten US national security. Both can support tariffs, but they address different concerns. The article identifies them as the legal bases for duties affecting trade negotiations.

Their key mechanism is executive authority. The president, usually through the US Trade Representative for Section 301 or the Commerce Department for Section 232, can investigate and impose measures under these statutes. Congress does not need to approve every tariff individually. That gives the executive branch speed and bargaining power.

Professor Rituparna Kaushik said the duties rest on executive authority and that any rollback could face a presidential veto. A new Congress can increase oversight and make fresh escalation politically harder. It cannot automatically erase the tariffs. India therefore needs a durable tariff schedule, not only temporary concessions.

The United States is a crucial market for India and one of its most important destinations for goods. India sells products such as textiles, apparel, gems and jewellery, among other exports. The supplied article does not give the market’s size or India’s 2025 goods-export value, so that specific figure cannot be drawn from the article itself.

Reported Indian trade data put India’s goods exports to the United States at about US$86.5 billion in fiscal 2024-25, the year ending March 2025. This is a fiscal-year figure, not necessarily a calendar-year 2025 figure. The distinction matters when comparing statistics or assessing the effect of a new tariff.

The article’s broader point is that the US remains a key market but should not become India’s single point of vulnerability. A deal could improve certainty for exporters. Continued tariff threats, however, would put a large and important export relationship under pressure.

Higher tariffs would raise the cost of Indian goods in the US or force exporters to absorb more of the cost. Textiles, apparel, gems and jewellery are especially exposed because the article identifies them as labour-intensive exporters. If negotiations fail, companies could delay investment, revise shipments, or seek other markets. The article does not provide precise losses.

The mechanism is straightforward. A tariff makes imported goods more expensive relative to competing products. US buyers may reduce orders, while Indian firms may cut prices and margins to remain competitive. Greater uncertainty can also unsettle businesses and financial markets. Pressure on export earnings could weigh on the rupee, but the article gives no forecast or numerical estimate.

The effects would depend on the tariff level, duration, and availability of alternatives. India is urged to pursue a predictable, rules-based schedule and diversify through the European Union and other partners. A deal could improve confidence, but it would not necessarily end Washington’s protectionist approach.

India’s main objective is greater certainty. Professor Rituparna Kaushik said New Delhi should seek a predictable, rules-based tariff schedule rather than short-term concessions. India is also advised to hold firm on agriculture and dairy, where US farm-lobby pressure crosses party lines. Protecting these sectors is therefore a central negotiating concern.

The United States is seeking a trade agreement while retaining leverage over India. Ajay Srivastava said Washington could connect additional tariffs to India’s purchases of Russian crude oil. He estimated that possible extra duties might reach around 17–19 percent, rather than the much higher level previously discussed. That threat could encourage India to sign.

The talks reportedly involve tariff levels, market access, and unresolved differences. India and the US agreed on a framework in February, lowering punitive tariffs on most Indian goods from 50 percent to 18 percent. Yet a final deal remains elusive because of Russian-oil tariff threats and a pending Section 301 investigation.

Diversification means selling to more markets instead of depending heavily on one buyer. The article says the US should remain a key market but not a single point of vulnerability. This matters because Washington’s tariff policy may stay restrictive even if negotiations accelerate. A US setback could therefore affect many Indian exporters at once.

Agreements with the European Union and other partners can create alternative outlets for Indian goods. If one market raises tariffs or delays a deal, companies may have other customers and destinations. Broader engagement also reduces the damage from threats connected to Russian-oil purchases. It gives exporters and policymakers more room to adjust.

Diversification does not replace the US market. The article presents it as a parallel strategy while India seeks a predictable US tariff schedule. It could strengthen India’s negotiating position by showing that trade ties are broader than one bilateral relationship. The EU agreement and other partnerships are therefore insurance against concentrated risk.