Political shift fuels optimism for U.S.-India trade agreement

Recent midterm election results, where cost of living was a primary concern for American voters, have complicated President Trump’s use of tariffs as a negotiating tactic. Ronak D. Desai, visiting fellow at the Hoover Institution, suggests that a trade deal with India is now “more likely than it was before the election” as a way for the President to demonstrate a policy achievement.

While India’s commerce and external affairs ministries and the U.S. Trade Representative’s Office have not commented, a spokesperson for India’s Ministry of External Affairs stated that the relationship between the two countries “enjoys bipartisan support in the United States.”

Experts note that tariffs have increased the average U.S. household’s tax burden, with estimates from the Tax Foundation projecting increases of $820 in 2026 and $1,000 in 2025. Democrats are expected to challenge Trump’s tariff policy following their control of Congress.

Atman Trivedi, partner at DGA Albright Stonebridge Group, believes the administration may prioritize finalizing deals to showcase policy successes. He suggests a deal could be completed before the G20 leaders’ summit in December.

Previous agreements, including one in February where India reportedly agreed to “Buy American” after the U.S. reduced tariffs from 25% to 18%, have been awaiting final approval. Discussions had reportedly stalled in October, but President Trump indicated the two sides were “pretty close” to a final agreement, a sentiment echoed by Indian Commerce Minister Piyush Goyal.

“We have been hearing for weeks that a deal is close to be settled,” said Aryan D’Rozario, associate fellow and chair on India and Emerging Asia Economics at the Center for Strategic and International Studies, adding that Modi’s visit to the G20 summit in December offers a suitable opportunity for formalization.