US midterm election results impact on Indian economy: From trade deal to oil prices and stock markets, explained

Estimated and predictions expect the Republican party to lose the midterm elections, voting results for which are underway in the United States.

With control for the US Congress at stake and exit polls predicting a blue wave for the Democrats, we take a look at the possible impact on the Indian economy.

How US midterms could impact Indian economy

The US President Donald Trump led administration has key policy areas that could have an impact on the Indian economy. Investors will have to rethink assumptions and make room for disruptions that could come from loss of full control in Congress.

Here's a breakdown of the US midterm election results impact on Indian economy — From trade deal to oil prices and stock markets, explained:

Loss in the midterms could mean that Trump would find it more difficult to continue his war on Iran at full scale. He will likely face pressure on two fronts — military spending and rising oil prices.

Any reduction or resolution in the war would have immediate impact on global oil and energy prices. While there could still be some geopolitical uncertainty, a potential ceasefire would cool oil prices measurably. India imports a large amount of its fuel and reduction in prices is a significant impact on bills for oil marketing companies (OMCs).

• Risk of US government shutdown

A divided Congress with reduced Republican control could mean prolonged debates and confrontation from Democrats on key issues such as budget, federal contracts, public spending and data releases, according to a CNBC-TV18 report. This could lead to a shutdown, as has happened in the past, and will impact investor sentiment and confidence in the markets.

Investors could move to safe haven options amid increased stock volatility or downturn, which could in turn trigger broader sell off in emerging markets as well, it added. Artificial intelligence (AI), IT, technology and immigration segments could face uncertainty with related stocks likely to see impact.

The India-US trade deal could see some changes or setbacks in case of change in Congress numbers. Beyond tariffs, the deal includes energy, manufacturing and investment commitments that could face additional scrutiny from lawmakers who could impose some challenges and try to leverage issues.

However, there is not expected to be a full disruption as both Republicans and Democrats support deeper ties with India, the report said.

There could also be an indirect impact on the Indian Rupee which strengthened modestly and dollar-rupee forward premiums retreated in range-bound trading as ​investors await the election outcome. However, despite the rupee's recent rally from near-record-low levels last month, signals from options and ​forward markets show that investors remain wary of further weakness and are seeking protection against fresh ​declines.

A Democratic victory could increase congressional scrutiny of immigration rules and put some Republican-backed proposals on hold, although major policy changes are unlikely, NDTV Profit reported.

Notably, Trump announced drastic immigration measures after returning to the White House for a second term, including a $100,000 fee on new H-1B visa applications from September last year. India-born beneficiaries accounted for 69.9% of all approved H-1B petitions in the 2025 fiscal year, according to USCIS data.