The world is abuzz with Donald Trump’s unexpected return to the US presidency, stirring a mix of hope, anxiety, and speculation about global shifts. In India, reactions are polarised, with many celebrating his victory over Kamala Harris, who some believe lost partly due to gender biases. This sentiment is echoed in headlines that play on her name, suggesting a cultural disdain for her defeat. As discussions unfold regarding Trump’s potential policies, questions arise about the stability of India under his administration and the future of US-India trade relations.
India’s economic ties with the US are significant; in fiscal year 2024, India exported goods worth $77.5 billion to the US, contributing to a total bilateral trade of approximately $120 billion. However, Trump’s past criticisms of India’s trade practices—labelling it a “Tariff King”—raise concerns about possible tensions ahead. During his previous term, he highlighted India’s high tariffs on American products, including a notable 100% tariff on Harley-Davidson motorcycles, which was later reduced by Indian Prime Minister Narendra Modi. Such protectionist policies could lead to renewed scrutiny and renegotiation of trade agreements.
The textile sector, a vital component of India’s economy, stands at a crossroads. Trump’s proposed economic policies may introduce higher tariffs across the board, which could significantly impact Indian textiles and other key export sectors like pharmaceuticals and IT services. The Global Trade Research Initiative (GTRI) warns that these changes could render Indian exports less competitive in the US market, jeopardising revenues for major companies reliant on American markets.
Moreover, Trump’s immigration policies previously hindered the mobility of Indian professionals, particularly in the IT sector where many rely on H-1B visas. Stricter immigration controls could further complicate matters for Indian tech firms that depend on talent deployment in the US. This shift may also reduce opportunities for new entrants into the workforce.
While there are challenges ahead, some analysts suggest that India could benefit from a potential vacuum left by China as American firms seek alternative manufacturing bases. Companies like Ford have already established significant operations in India, indicating a willingness to invest despite geopolitical uncertainties.
On the defence front, Trump’s unpredictable stance poses risks for India. His past attempts to mediate between India and Pakistan have raised concerns about India’s strategic autonomy. Additionally, his administration’s focus on fossil fuels and reluctance to engage in international climate commitments may hinder collaboration on renewable energy projects crucial for India’s sustainability goals.
Despite these challenges, there remains optimism for improved US-India relations under Trump’s leadership. His previous rapport with Prime Minister Modi fostered high-profile diplomatic events aimed at strengthening ties between the two nations. As both countries navigate this complex landscape, intense negotiations will be essential to address trade imbalances and ensure mutual benefits.
In conclusion, while Trump’s return heralds potential upheaval in trade dynamics and immigration policies impacting India’s textile industry and the broader economy, it also presents opportunities for strategic partnerships that could reshape the landscape of US-India relations in the coming years.
