US Election 2024: What Donald Trump victory could mean for India-US economic relations? HERE's expert opinion
Economic experts in India predict stable and positive trade relations with the US despite Donald Trump's protectionist policies, citing his focus on strengthening the American economy, which would benefit India, its largest trading partner.
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FollowNew Delhi: With Donald Trump claiming his victory and the initial trend also showing his win in the US Presidential election 2024, the economic experts in India believed that the trade relations between the two democracies would be stable and positive, despite his appetite for imposing tariffs or moving towards protectionism in the trade policy.
Asianet Newsable has spoken with a number of economic experts about the impact on India-US economic relations with Trump's emergence as a winner, defeating the Democrat Kamala Harris.
Stating that Trump's victory is certain with the ongoing counting trends, economic expert Prakash Chawla said that “his primary focus would be to strengthen the American economy. Since the US economy is the largest and its economy does well the rest of the world will also do the same. US is India’s largest trading partner and I am sure India would get the benefit. India’s Information Technology sector is heavily leaned on the US economy so they would get the advantages.”
In his election campaign, Trump had described tariffs as "the most beautiful word in the world" and said his plan would boost the US manufacturing, jobs and incomes and earn trillions of dollars in federal revenues over 10 years.
Prakash Chawla said: “Though he spoke of it how it will be going to be pan out that we have to wait and watch. He will not do straightway. When he talks of imposing tariffs on products, it is not that India is being targeted. He wants to reduce the trade deficit gap with China to fix the US economy. For India, it will be a good sign.”
It is pertinent to mention here that the US trade deficit with China stood at USD 279 billion in 2023 while in 2022 it was at USD 382 billion. The decrease in the trade deficit is mainly due to a decrease in exports from USD 195.5 billion in 2022 to USD 147.8 billion in 2023, and a decrease in imports from USD 562.9 billion in 2022 to USD 427.2 billion in 2023.
Another economic expert, Shishu Ranjan, who is also a Vice President (Risk Management), at Barclays, told Asianet Newsable that Indian trade relations with the US have been insulated from domestic politics of the United States of America for the last one and a half decades. “Therefore, a historic mandate of non-consecutive terms for Donald Trump as US President is not expected to be disruptive for India.”
“The expectations are based on multiple reasons. One, Donald Trump has had excellent relations with Indian Prime Minister Narendra Modi since his first term and he reiterated the same during his election campaign to signal his friendly intent towards India and Indians. Second, Trump will have to tackle China to contain the ever-rising trade deficit as well as geopolitical risks and India fits well into the China+ one strategy, which means India will have a better opportunity to increase its trade partnership. Third, Trump has the capability and intent to end the ongoing war in Europe and Asia. This will have a positive impact on market and world trade.”
Shishu Ranjan also said that “New Delhi will also benefit as it has good trading relations with Russia as well as Iran, and ongoing war has troubled Indian firms transacting with Russian and Iranian firms due to various sanctions in place. Lastly, the similarity of political orientation between the Indian PM and the US president can also have positive spillover in economic space and that means more American investment in India, which will help the Indian manufacturing and services sector to have higher growth.”
Another expert, Utsav Kumar Singh, Fellow at the Institute of Social Sciences, New Delhi was of the view that Trump’s victory carries a significant impact on India-US relations in encompassing trade, economy, immigration and geopolitics.
“Central theme of Trump’s campaign was to stop illegal immigration and revival of USA’s glory.”
“In a way to make America great Trump administration has a specific plan—transactional trade and introduction of ‘reciprocal tax’ on developing countries including India. New tariff could potentially harm India’s export to the US,” said Utsav Kumar Singh, who also taught at the University of Delhi.
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