New Delhi — India’s best strategy for securing a favorable trade agreement with the United States is to keep negotiations active while avoiding public escalation, according to an SBI Research report.
The report said India should focus on wearing down Washington’s opening position rather than damaging the broader relationship. It recommended keeping the conversation warm, making limited and reversible offers, and waiting for the Trump administration’s initial demands to run into U.S. market costs, China-balancing priorities and alliance fatigue.
India should bargain later, when Washington’s reservation price becomes clearer and India’s value as a market, technology partner, defense buyer and Indo-Pacific counterweight becomes more visible, the report said.
“India’s strategy should be to test the resolve of the US administration and potentially accept a high cost follow through in short run and signal that India stands its ground for the long game. Dive sideways and test the resolve. India will win,” said Dr. Soumya Kanti Ghosh, group chief economic adviser at the State Bank of India.
The report said the U.S. administration is using uncertainty as a bargaining tool across issues including NATO, Iran, tariffs, Greenland, China and India.
India occupies a position between NATO allies and China, the report said. While it does not have China’s concentrated chokehold, it has meaningful leverage through its market scale, technology talent, pharmaceutical sector, defense procurement, energy options, diaspora influence and Indo-Pacific role.
In game theory terms, the report said, the U.S. administration is preserving incomplete information about its bargaining position. That forces the other side to decide whether to concede, wait, test or counter-escalate.
“The short-run payoff is leverage. The long-run cost is trust depreciation with the US. Interestingly such repeated uncertainties also teaches allies, rivals and markets to discount future signals. Alternatively, if every partner learns that the final US position will be adjusted when costs rise, the bargaining value of the signal declines,” the SBI report said.
The report also said uncertainty persists even after a memorandum of understanding was signed between the United States and Iran on June 17 to end the war. Shipping data through the Strait of Hormuz shows only limited and uneven signs of restarting, it said.
The report said flows have returned only gradually rather than showing a broad normalization in traffic. Crude flows have restarted in a limited way, while inbound agricultural shipments show only a tentative and incomplete recovery. LNG and fertilizer-related shipments remain effectively absent, it added. (Source: IANS)
