India and South Asia

India entered the election period in a difficult trade position. In August 2025 the United States imposed 50% tariffs on most Indian goods, a 25% reciprocal rate plus a 25% penalty for buying Russian oil; those IEEPA-based duties fell with the Supreme Court's ruling in February, and India now faces the Section 301 forced-labor tariff and Section 232 duties while negotiating a bilateral agreement (Nikkei Asia). Trump's waiver of the Graham Act's 100% tariff on buyers of Russian oil removed a further threat. H-1B fees weigh on Indian IT services, and the administration's courtship of Pakistan's Field Marshal Asim Munir, including Pakistan's role as an Iran mediator, has irritated New Delhi.

The midterms improve India's bargaining position without changing its tariff schedule. Former trade secretary Anup Wadhawan said Trump's "capacity to impose arbitrary tariffs will certainly face a challenge" (Reuters). That overstates it: Congress cannot alter Section 301 rates without a veto-proof majority. But a Democratic Congress is less willing to tolerate waivers on Russian oil purchases and more interested in H-1B and immigration oversight, which cuts both ways for India. We found no substantive statement from India's government on the result by midday on 4 November.

New Delhi's options are to close the trade agreement quickly with an administration that wants wins, or to wait in the hope that a weaker president concedes more on agriculture and dairy. The Iran war affects India directly through oil prices and the safety of Indian nationals in the Gulf. For Pakistan, the closeness of the Munir relationship depends on the executive, and a Democratic Congress is likely to examine Pakistan's minerals and crypto deals with the Trump circle.