India sees some trade relief, new risks after US midterm vote

Supporters of Democrat senatorial candidate James Talarico react to early election results during a midterm election night watch party at Long Center for the Performing Arts in Austin, Texas on 3 November 2026.(AFP)AI Quick ReadIndian officials were cautious on the US midterm election results, saying it eases some of the pressure over trade tensions but creates a new layer of uncertainty in an already fragile relationship.

The Democrats won a landslide victory in both chambers of the US Congress on Tuesday in a sharp rebuke of President Donald Trump’s policies. His trade tariffs and war with Iran have been particularly damaging for countries like India, which counts the US as its biggest export market and is a major importer of oil from the Middle East.

The election result means more oversight of Trump’s policies and restrictions on the ability of the president to unilaterally impose reciprocal tariffs. That’s an important development and a positive for countries like India, officials in New Delhi said, asking not to be identified because they were not authorised to speak publicly on the matter.

However, Trump still has leverage to impose higher tariffs after he signed into law a Russia oil sanctions bill in September, giving him the ability to impose levies of as much as 100% on the top buyers of Russian energy, they said.

There’s also the threat of tariffs from ongoing US trade investigations, they said. India’s Union Ministry of Commerce & Industry didn’t immediately respond to a request for comment. The United States and India have been trying to clinch a trade deal for months and get relations back on track after a fraying in ties last year.

US officials have recently expressed optimism over a trade deal, saying an agreement was close to being finalised. Analysts and former officials said it’s too early to say how the election result this week would play out for countries like India.

“We must watch how the dynamics of Trump and the Congress evolves,” said Arun Kumar Singh, who served as India’s ambassador to the US in 2015-16. Time will tell “how President Trump absorbs the message of the electoral verdict and how he looks at his legacy for 2028 and beyond for the Republican Party,” he said.

Much will depend on the ability of the Democratic-controlled Congress to curtail Trump, said Ashok Malik, a former Indian foreign policy official and currently a partner at the strategic advisory firm Asia Group. “Trump’s actions in the near term and the rest of his presidency will be an important metric,” he said.

“This is true of the Iran conflict, but more generally for the unilateralism Trump has injected into trade, tariffs and foreign policy. This has destabilised the global system.” The election result also has likely implications for US immigration policy, a major issue of concern for India.

The Trump administration has sought to curb its H-1B visa program, used predominantly to hire Indian IT workers to work in the US. Firms like Microsoft Corp. as well as some of India’s biggest IT businesses, like Tata Consultancy Services Ltd.

and Infosys Ltd., rely heavily on the program for skilled labour. Nitin Pai, founder of Takshashila Institution, a think tank based in Bengaluru, said it was difficult to predict what comes next for US-India relations, although he remained relatively pessimistic.

“My assessment is India should prepare for the rough ride we have had for the last two years,” he said. “We have to pursue what’s in our national interest regardless of the election results.” The US system gives significant power to the president and executive, “so even if Democrats have some power it doesn’t mean he can’t do what he wants”.

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