India should strategically test the resolve of the Donald Trump administration on trade negotiations rather than make early concessions, according to an SBI Research report released on Friday, 10 July. The report advises New Delhi to wear down Washington's opening position — not the relationship — by keeping dialogue warm, avoiding public escalation, making only limited and reversible offers, and waiting for the Trump administration's initial demands to collide with US market costs, China-balancing imperatives, and alliance fatigue.

The Core Strategy

Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at the State Bank of India, put it bluntly: '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.'

The report recommends that India bargain late — when Washington's reservation price becomes clearer and India's value as a market, technology partner, defence buyer, and Indo-Pacific counterweight is more visible to the US side.

Where India's Leverage Lies

India, the report argues, occupies a strategically unique position — sitting between NATO allies and China. While it does not possess China's concentrated chokehold over global supply chains, it holds meaningful cards: market scale, technology talent, pharmaceuticals, defence procurement, energy optionality, diaspora influence, and Indo-Pacific strategic value.

This is not a position of weakness. It is, according to the report, a position of patient leverage — one that rewards a long-game approach over short-term capitulation.

Game Theory and US Bargaining Tactics

The SBI report frames the Trump administration's negotiating posture in game-theoretic terms. Washington is reportedly preserving 'incomplete information' about its true bargaining type — deploying uncertainty as an instrument across NATO, Iran, tariffs, Greenland, China, and now India.

In this environment, the counterparty — India — must choose between conceding, waiting, testing, or counter-escalating. The report warns that the short-run payoff of US pressure tactics is leverage, but the long-run cost is trust depreciation. Notably, the report flags a systemic risk: 'If every partner learns that the final US position will be adjusted when costs rise, the bargaining value of the signal declines.'

Strait of Hormuz: Uncertainty Persists

The report also flags that global trade uncertainty has not eased despite the US-Iran MoU signed on 17 June to end hostilities. Shipping data through the Strait of Hormuz shows only limited and uneven signs of recovery. Crude flows have restarted in a limited way, and agricultural inbound shipments reflect only a tentative and incomplete recovery. LNG and fertiliser-related shipments, however, remain effectively absent — suggesting that a broad normalisation of traffic has not yet materialised.

What India Should Watch For

The SBI report's prescription is clear: do not blink first. India's strategic and economic value to the US — across defence, technology, and Indo-Pacific geopolitics — will become more apparent as Washington's own domestic pressures mount. The optimal moment to lock in a favourable trade deal, the report suggests, is when that value is fully priced in by the other side.