India is in a strong position to negotiate a trade deal with the United States, thanks to its robust economy and a smaller-than-expected decline in exports. Despite the US imposing tariffs of up to 50% on Indian imports, the impact on India's shipments has been less severe than anticipated. In October, exports to the US fell by 8.6% year-on-year to $6.3 billion, a smaller drop compared to the 12% decline seen in September, the first month under the new tariffs.

Indian officials have indicated that they are not rushing to finalize a deal. A senior government official stated, "For now, we've avoided the worst impact of the 50% US tariffs," and added, "If needed, we are ready to wait." While sectors like textiles have reported fewer orders, the overall economic impact has been manageable, allowing India to negotiate from a position of strength.

Discussions are ongoing, with expectations that the US may roll back the 25% tariff related to India's Russian oil purchases and eventually reduce overall tariffs to around 15%. In return, India is willing to lower import duties on over 80% of goods while maintaining protections for sensitive sectors such as agriculture.

US President Donald Trump recently mentioned that an agreement with India is close, which would enhance economic and security cooperation between the two nations. Meanwhile, India's Commerce Minister Piyush Goyal hinted at potential positive developments in the near future.

To support exporters, India has been diversifying its trade relationships, signing agreements with the UK, UAE, and Australia. The government has also introduced tax cuts on raw materials and a $5.1 billion support package. Many exporters have mitigated the decline in US demand by expanding into African and European markets and offering discounts to retain American clients. Ajay Sahai, director general of the Federation of Indian Export Organisations, noted that apparel and footwear companies are absorbing additional costs of up to 20% to keep US buyers.

India's economy grew by 7% in the July-September quarter and is projected to expand by 6.8% this financial year. However, exporters face challenges from increased competition with China, which has flooded various markets with cheaper products. Rahul Tikoo, CEO of a Mumbai-based specialty chemical manufacturer, remarked, "Chinese businesses are well-entrenched and their domestic situation has made them highly competitive."

In October, India's goods exports to non-US markets fell by 12.5%, indicating heightened competition as countries adjust their export strategies following tariff announcements. Overall, while India navigates these challenges, its resilient economy provides a solid foundation for ongoing negotiations with the US.