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 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 with regards to impact on India-US economic relations with Trump emergence as winner, defeating the Democrat’s Kamala Harris.
Stating that Trump victory is certain with the ongoing counting trends, economic expert Prakash Chawla said that “his main and primary focus would be to strengthen American economy. Since the US economy is the largest and its economy does well the rest of world’s 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 but 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 in an effort 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 stands 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 has been insulated from domestic politics of the United States of America for last one and 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 excellent relations with Indian Prime Minister Narendra Modi since his first term and he reiterated the same during election campaign to signal his friendly intent towards India and Indians. Second, Trump will have to tackle China to contain ever rising trade deficit as well as geopolitical risks and India fits well into 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 ongoing war in Europe and Asia. This will have a positive impact on market and word trade.”
Shishu Ranjan also said that “New Delhi will also be benefitted 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, similarity of political orientation between Indian PM and US president can also have positive spill over in economic space and that means more American investment in India, which will help Indian manufacturing and services sector to have higher growth.”
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