 "Will Trump impose tariffs on India? What his return to White House means for New Delhi")
Soon, Donald Trump will be addressed as Mr President. This comes after the Republican is on the verge of securing the required 270 US Electoral College votes against his rival, Kamala Harris.
Even as the counting of the US presidential votes continue, many across the world began to congratulate Trump, with India’s Prime Minister Narendra Modi among the many. Describing Trump as “my friend”, the prime minister said in a post on X, “Heartiest congratulations my friend @realDonaldTrump on your historic election victory.”
“As you build on the successes of your previous term, I look forward to renewing our collaboration to further strengthen the India-US Comprehensive Global and Strategic Partnership. Together, let’s work for the betterment of our people and to promote global peace, stability and prosperity,” he added.
As the US prepares for Trump 2.0, let’s take a closer look at what the former US president’s return to the White House would mean for India and the India-US ties.
Trade
Trade is one of the most important aspects of India-US ties and it will be interesting to see how a Trump comeback affects this facet of the historic relationship that the two nations share. Currently, US is India’s largest trade partner, with bilateral trade reaching almost $120 billion in FY24 — slightly higher than India’s China trade.
Experts note that a Trump presidency would bring disruption and unpredictability. Amid the US presidential campaign, the Republican last month branded India a “very big [trade] abuser” and vowed to introduce a reciprocal tax if elected to power. “Perhaps the most important element of my plan to make America extraordinarily wealthy again is reciprocity. It’s a word that’s very important in my plan because we generally don’t charge tariffs. I started that process, it was so great, with the vans and the small trucks, etc. We really don’t charge. China will charge us a 200 per cent tariff. Brazil is a big charger. The biggest charger of all is India,” Trump said. “India is a very big charger. We have a great relationship with India. I did. And especially the leader, Modi. He’s a great leader. Great man. Really is a great man. He’s brought it together. He’s done a great job. But they probably charge as much.”
This statement by Trump is a sign of things to come it could mean higher tariffs.
In 2019, while he was the US president, Trump also terminated India’s designation as a beneficiary under the decades-old Generalised System of Preferences (GSP) programme after determining that it has not assured the US that it will provide “equitable and reasonable access” to its markets.
Experts note that Trump’s tariff policy could hurt India’s IT, pharmaceutical, and textiles sectors, all of which rely on the US market.
However, there’s a flip side. Trump is hoping to move away from China , aiming to shift supply chains away from China to more favourable countries like India. This will attract more businesses to Indian shores. Adrian Mowat, Investor in Hong Kong SAR, shared this sentiment, telling CNBCTV18 that India might benefit from Trump’s return to the White House, primarily, because of the fresh tariffs on China that he has already promised. This may encourage more businesses to shift their manufacturing from China to India.
As a Nomura report stated that any disruptions caused by a second Trump presidency were likely to be mitigated by the US’ ‘China Plus One’ strategy, which is expected to gain momentum under Trump.
Immigration and Indian workers
For Indians, a Trump presidency could be worrying. This is because of his restrictive stance on immigration, especially on the H1-B visa programme .
During his first tenure as president, Trump attempted to increase wage requirements for foreign workers, creating challenges for IT professionals. With Trump’s return, there’s a worry that he would reintroduce these measures, which, in turn, would affect Indian workers.
“For Trump, I think there will be some difficult negotiations over trade and immigration, although, on many other issues, he has spoken about a very positive relationship with India and Prime Minister Narendra Modi,” said Dhruva Jaishankar, the executive director of the America chapter of the Observer Research Foundation.
Defence
If there’s one reason why India should celebrate a Trump return is his stance on China, as it aligns with New Delhi’s concerns. Trump 1.0 previously strengthened the Quad , a security partnership between the US, India, Japan, and Australia, to counter Chinese influence in the Indo-Pacific. And with a return of Trump, there’s a possibility that he could strengthen this bloc.
A Trump presidency would also mean a continuation of joint military exercises, arms sales, and technology. Such defence ties would be beneficial to India which shares borders with less than friendly neighbours China and Pakistan.
Moreover, Trump’s “Peace through Strength” approach might align with India’ s security objectives. India has long sought a firmer US stance on Pakistan, particularly in addressing terrorist activities along its borders, reports NDTV.
With inputs from agencies
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