India Advised to Exercise Strategic Patience in US Trade Negotiations
According to an SBI Ecowrap research report released on Friday, India should remain patient and avoid making early concessions in its ongoing trade negotiations with the United States. The report argues that Washington's current negotiating style relies heavily on strategic uncertainty and issue-linking to maximise leverage.
The report states that the US administration is using uncertainty as a bargaining instrument not only in trade but also across NATO, Iran, China, and Greenland, making ambiguity itself a source of negotiating power. In game-theory terms, Washington is preserving incomplete information about the type of bargaining, the report adds.
India's Unique Position in Global Strategic Landscape
SBI Research notes that India occupies a unique position in the evolving global strategic landscape. It lies between NATO allies that depend heavily on American security guarantees and China, which possesses substantial counter-leverage through critical minerals, manufacturing, and supply chains.
While India does not enjoy China's concentrated bargaining power, it still has significant strengths, including its large domestic market, technology talent, pharmaceutical sector, defence procurement, energy options, diaspora influence, and strategic importance in the Indo-Pacific, the report highlights.
Recommended Strategy: Wear Down the Opening Position
Against this backdrop, SBI Research advises India to resist pressure for quick compromises and instead allow the US negotiating position to evolve as domestic market costs and broader geopolitical considerations emerge. The report states: India's best strategy is to wear down the opening position, not the relationship. Keep the conversation warm, avoid public escalation, make limited and reversible offers, and wait for US administration first demand to run into US market costs, China-balancing needs and alliance fatigue.
The report further advises India to test the resolve of the US administration even if it entails some short-term costs, arguing that such an approach would strengthen India's long-term bargaining position.
Broader US Negotiating Framework
Beyond India-US trade, the report analyses what it describes as the broader US negotiating framework, where trade, defence, security, strategic resources, and diplomacy are increasingly being bundled together rather than handled separately. It says the US administration seeks quick, near-term gains by announcing strong tariff measures, observing reactions from markets and governments, and then sequencing or adjusting the final policy.
The report also points to NATO as an example of this bargaining approach. It says the US administration has transformed long-standing alliance commitments into conditional bargains by linking defence spending with broader strategic alignment. Referring to NATO's latest defence spending target, the report notes that Spain's resistance has been treated not merely as a budgetary issue but as a wider test of political alignment and willingness to support Washington's strategic priorities.
Conditional Predictability in Alliances
According to the report, NATO was built to make security predictable, but the US administration's intervention has made predictability more conditional. Protection is presented as something allies must keep financing, demonstrating, and politically sustaining. The report further observes that the US administration frequently connects different policy domains, allowing defence spending, trade policy, strategic resources, and diplomatic signalling to reinforce one another during negotiations.
Long-Term Credibility Concerns
SBI Research cautions that while such a strategy may generate immediate negotiating advantages for Washington, repeated reliance on uncertainty could gradually erode long-term credibility and trust among allies, partners, and markets. The report concludes that India should maintain its negotiating position, preserve the bilateral relationship, and leverage its growing economic and strategic importance while waiting for a more favourable bargaining environment to emerge.
