India’s growing confidence in its trade negotiations with the United States is being shaped by a combination of strong domestic fundamentals, surprisingly resilient export performance and recent policy shifts in Washington that have eased pressure on Indian sectors. As talks between the two countries inch closer to completion, New Delhi appears more assured than ever, even as it maintains firm positions on critical issues such as agriculture and dairy.
India has made it clear that the bilateral deal must be “fair, equitable and balanced”, a point repeatedly emphasised by Commerce Minister Piyush Goyal. Domestic optimism is reinforced by the fact that India’s economy has absorbed US tariff shocks far better than expected, and by the Trump administration’s recent rollback of punitive duties on several products—including spices and tea—due to mounting inflation in the US. Officials say that although the negotiations have been lengthy and complex, India is willing to wait rather than accept unfavourable terms, especially on sensitive sectors.
Despite this confidence, the prolonged uncertainty has affected investor sentiment. The rupee recently hit a lifetime low of 89.49 against the US dollar, with analysts partly attributing the slide to delays in the trade deal. Foreign investors have also withdrawn billions from Indian equities, reflecting caution ahead of the agreement’s finalisation. However, Indian authorities remain optimistic, and several officials have indicated that the deal could be sealed before the end of the year, noting significant recent progress.
US tariffs imposed in August created new challenges, including overall duties of 50% linked partly to India’s energy ties with Russia. Nevertheless, India’s economy has continued to display resilience. GDP projections have actually been revised upward by the IMF despite the tariff shock, and government measures such as GST cuts have strengthened domestic consumption. Indian exports to the US, which initially declined sharply, have begun recovering sooner than anticipated, with October posting the first month of positive growth in five months.
The US decision to ease tariffs on around 200 food products has further boosted India’s position. With duties rolled back on commodities such as tea, spices and mangoes, Indian exporters now regain a level playing field in the American market. According to the Commerce Ministry, these exemptions cover up to a billion dollars’ worth of India’s agricultural exports. The timing of the rollback—amid rising inflation and falling approval ratings for the Trump administration—adds another layer of strategic leverage for New Delhi.
At the same time, India has made moves to address US concerns. While state-run refiners have significantly reduced their crude oil purchases from Russia, private entities briefly increased imports before scaling them back. India has also deepened energy ties with the US by signing a long-term LPG supply agreement, which will account for a substantial share of its future imports.
These economic and diplomatic developments have combined to put India in a stronger negotiating position. With exports rebounding, inflation-driven tariff reversals in the US working in India’s favour, and the domestic economy holding firm, New Delhi is approaching the concluding stages of the trade talks with greater assurance. As officials on both sides work toward a final agreement, India’s message is clear: it is ready for a deal, but only on terms that reflect mutual respect and genuine balance.
