From crypto tensions to BRICS alliance and Trump’s ratings slump — SBI Research outlines key political triggers behind stalled trade deal
Despite months of negotiations and positive signals from both sides, India and the US have failed to finalise a long-anticipated trade agreement. Recently, US President Donald Trump announced a 25% tariff on Indian imports, intensifying the deadlock. A report by SBI Research has highlighted three key political factors behind this stalemate — including Trump’s domestic challenges, crypto geopolitics, and India’s growing alignment with the BRICS bloc, reported timesofindia.indiatimes.com.
According to SBI Research, one of the primary drivers of the trade impasse is the plummeting job approval ratings of President Trump. His approval stood at just 37% six months into his second term, with a drastic 17-point drop among independent voters. The report suggests that political pressure to regain public support may have prompted Trump to take a harder line on trade with India, using tariffs as a tool to assert domestic strength.
The second political angle involves the US’s increasing focus on Virtual Digital Assets (VDAs) — particularly stablecoins and cryptocurrencies. With efforts to establish the US as the global crypto hub, the administration fears a decline in the dollar’s dominance. The recently passed GENIUS Act aims to integrate stablecoins with the traditional financial system, requiring transparency in reserves and backing by US dollars and Treasury bills.
SBI Research cites Trump’s falling approval ratings, India’s BRICS role, and US crypto ambitions as critical friction points
SBI Research also took a dig at Pakistan’s move to implement cryptocurrency within its economic framework, calling it “gravely ridiculous and comically pathetic.” It noted that while the US is carefully regulating digital currencies, Pakistan’s hurried leap into crypto legislation reflects economic desperation rather than foresight.
The third — and perhaps most politically charged — reason is India’s deeper engagement with BRICS, an economic bloc that the US views as hostile to the dollar’s dominance. Trump recently called BRICS “a group that is anti-the United States” and warned that members like India could face penalties. SBI Research suggested India’s bold diplomacy — through initiatives like Operation Sindoor and greater BRICS coordination — might be unsettling Washington.
Trump’s concerns were evident when he said, “It’s partially BRICS and it’s partially trade… BRICS is trying to take over the dollar… and we are not going to let anybody attack the dollar.”
While the 25% tariff on India may be a setback in the short term, the report suggests that India’s strategic posturing and sovereign trade stance are part of a long-term vision that extends beyond transactional diplomacy.
