India should stay firm in US trade talks, test Washington's resolve: SBI

India should avoid making premature concessions in its ongoing trade negotiations with the United States and instead hold its ground to strengthen its long-term bargaining position, according to an SBI Ecowrap report released on Friday.

The report said the US administration is increasingly using strategic uncertainty as a negotiating tool across trade, defence and geopolitical issues, allowing it to maximise leverage by keeping its final position deliberately ambiguous.

According to SBI Research, Washington's approach extends beyond trade and is visible in its dealings with NATO, Iran, China and Greenland, where multiple policy issues are increasingly being linked together to extract favourable outcomes.

The report noted that India occupies a unique position in the evolving global strategic landscape. While it does not possess China's concentrated leverage in manufacturing, critical minerals and supply chains, India brings significant strengths to the table through its vast domestic market, technology talent, pharmaceutical industry, defence procurement, energy partnerships, influential diaspora and growing strategic importance in the Indo-Pacific.

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Against this backdrop, SBI Research said India should resist pressure for quick compromises and allow the US negotiating stance to evolve as domestic economic costs and geopolitical considerations begin to influence Washington's position.

It advised India to maintain constructive engagement without escalating tensions publicly, while making only limited and reversible offers during the negotiations.

The report further recommended that India should "test the resolve" of the US administration, even if it results in some short-term costs, arguing that such an approach would ultimately improve India's negotiating position.

SBI Ecowrap also said the US is increasingly bundling trade, defence, security, strategic resources and diplomacy into a single negotiating framework rather than treating them as separate issues.

Citing NATO as an example, the report said the US has made security commitments more conditional by linking defence spending with broader strategic alignment. It pointed to Spain's resistance to higher NATO defence spending targets as an illustration of how budgetary issues are now being tied to political support for Washington's priorities.

While such a strategy may provide immediate negotiating advantages, the report cautioned that excessive reliance on uncertainty could gradually weaken America's long-term credibility among allies, partners and financial markets.

It concluded that India should preserve its bilateral relationship with the US while leveraging its growing economic and strategic importance and waiting for a more favourable negotiating environment to emerge.