Trump's Midterm Setback Revives Hopes for a US-India Trade Deal

The U.S.-India trade deal has been stuck in limbo since February. Now, after Donald Trump's midterm election losses, experts tell CNBC the two sides are closer to signing than they were before the vote — and that Trump and Narendra Modi could seal it when they meet in December for the G20 leaders' summit. Foreign investors also returned to India's market in November, giving New Delhi a second reason to celebrate Diwali.

The logic runs through Washington, not Delhi. Experts told CNBC that Trump could lean toward closing pending trade deals so he can sell them as policy achievements to American voters, and that the pact with New Delhi is a prime candidate. Atman Trivedi, partner at Washington-based DGA Albright Stonebridge Group, said the president may lean more into getting deals done because he can promote them to the public, adding that the administration wants an India deal by the December G20 summit.

Cost of living topped American voters' concerns in the midterms, and tariffs have become a hard sell. Ronak D. Desai, a visiting fellow at Stanford University's Hoover Institution, told CNBC the election was a verdict on the cost of living and that tariffs are now a liability the president cannot defend on the numbers. He said Congress will not hand Trump an affordability win, but a trade deal is one he can announce on his own — making an India announcement more likely than before the election. According to Tax Foundation estimates, the duties raised the average U.S. household's tax burden by $820 in 2026 and $1,000 in 2025. Democrats, within days of taking control of both houses of Congress, are preparing to challenge Trump's signature tariff policy.

The deal has been through the wringer. In February, Trump announced an agreement with India, claiming New Delhi had agreed to buy American at a much higher level after Washington agreed to slash tariffs to 18%. He had earlier imposed a 25% tariff on Indian imports, plus an additional 25% duty over New Delhi's purchases of Russian oil. The pact then sat waiting for final approval, especially after the Supreme Court struck down Trump's tariffs, which CNBC reports gave India space to demand preferential terms that would give it an edge over competitors. Officials said negotiations hit an impasse in early October; on Oct. 20, Trump said the sides were pretty close. Indian media reports say Commerce Minister Piyush Goyal confirmed discussions had largely concluded.

Mark Linscott, former assistant U.S. trade representative and senior advisor at the U.S.-India Strategic Partnership Forum, told CNBC the talks are far along and there seems to be a gentlemen's agreement between Trump and Modi that the deal should be concluded when they meet at Mar-a-Lago in December. India's commerce and external affairs ministries and the U.S. Trade Representative's Office did not respond to CNBC's requests for comment, though an Indian Ministry of External Affairs spokesperson said Tuesday the relationship enjoys bipartisan support in the United States. Aryan D'Rozario, associate fellow at the Center for Strategic and International Studies, said Modi's December G20 visit will provide the perfect stage to formalize an agreement.