Inside India newsletter: Trump’s poll setback fuels hope for U.S.-India trade deal by year end

Donald Trump’s midterm setback has increased pressure on him over the cost of living and tariffs, while raising expectations that the United States and India could conclude a trade deal by year end. Analysts say an agreement would give Trump a policy achievement to promote, though it could also be seen as vindication of his tariffs-led approach.

Talks are described by one former US trade official as far along, with a possible announcement when Trump and Narendra Modi meet at Mar-a-Lago in December. The US had proposed cutting tariffs on Indian goods to 18%, after previously imposing duties of 25% and an additional 25% linked to India’s purchases of Russian oil; the February deal remains unapproved. Tax Foundation estimates tariffs added $820 to the average US household’s tax burden in 2026 and $1,000 in 2025, while Indian officials have said the relationship has bipartisan support in the US.