It will be interesting to see how the Republicans’ loss in both Houses will impact US-India trade talks. A dominant view is that President Trump can continue with his trade offensive. It is also believed that Democratic Senators will back a hard bargain with India. For instance, the Lindsey O Graham Sanctioning Russia and Iran Act, 2026, which seeks to punish top buyers of Russian oil such as India with 100 per cent tariffs on their exports to US, was passed with bipartisan support.
To cite another case of continuity, the Biden government retained the Section 232 duties (under the Trade Expansion Act, 1962) on steel and aluminium, imposed by the first Trump administration. The issue of whether the President can exercise untrammelled powers under Section 232 has been a subject of debate, and can come alive in a Democrat-led House. A May 2021 report by the Congressional Research Service (CRS) says that “President Trump’s Section 232 tariff actions… raise questions about the proper interpretation of threats to national security on which Section 232 investigations are based.” The same scrutiny can extend to the ongoing Section 301 investigations (of the Trade Act, 1974) at a time when the Democrats are bent upon reining in the President. At present, India (among 60 countries) has been identified for using ‘forced labour’ and slapped with a 10 per cent tariff. Meanwhile, investigations into creation of excess capacity are in progress, while India has been identified as a player in the so-called Great Transshipment Scam, which is about re-routing goods from China. India should persuade Democratic legislators to take a critical view of these steps. The Democrats got a foot into the tariff door, when the US Supreme Court on February 20 struck down Trump’s ‘reciprocal’, country-based tariffs. Oddly, earlier that month, US and India had agreed on a joint statement to reduce these very tariffs from 25 per cent to 18 per cent.
Going forward, there are two aspects to be considered. The first relates to a neglected, but crucial issue of whether any trade pact can now be carved out by leaving out the legislature. The second, of course, pertains to how India should plan its negotiating strategy. With the House turning ‘blue’, the first question becomes important. The Trade Promotion Authority or ‘fast track’, a legislative institution whose six year tenure lapsed in 2021, is meant to provide Congressional approval to trade pacts, and has been around for decades. It can be revived, or the demand for the same raised.
According to an April 2015 CRS paper, “the US Constitution assigns express authority over the regulation of foreign trade to Congress.” As for the second, India should hold its ground on agriculture, digital access and intellectual property. The February pact need not be a point of reference. However, a balanced offer can be taken forward — one that allows market access without huge sacrifices.
Published on November 12, 2026
