Trump's midterm setback may ease tariff pressure on India: Report

US President Donald Trump's electoral setback in the 2026 midterm elections could ease trade-related pressure on India and give New Delhi greater room to negotiate favourable terms in its ongoing trade talks with Washington.

According to a research report by Emkay Research, the Democrats' victory and the loss of Republican control over both chambers of Congress could limit Trump's ability to pursue an aggressive tariff agenda. The changed political equation could reduce the threat of fresh tariff escalation and weaken Washington's leverage over its trading partners, including India.

"The midterms outcome probably will not change the tariff structure much, but it will change Trump's incentives: fewer new escalation tools, more pressure to deliver consumer affordability, and deals before 2028," the report said.

The report noted that the urgency for India to conclude a trade agreement with the US has diminished following the election outcome. It suggested that New Delhi could now negotiate from a stronger position rather than face pressure to quickly accept Washington's trade demands.

"Trade remains one of the few areas he (Trump) controls alone, however, so headline volatility will persist even as the bias softens," it added. Emkay Research also highlighted that the US Supreme Court's ruling on Trump's use of emergency economic powers had limited one route for imposing tariffs. It said future tariff escalation would increasingly require investigation-based action under Section 301 and Section 232 of US trade law.