Broad guarantees made by the Trump 2.0 marketing campaign to Individuals together with on quelling inflation could favour India as they may soften oil costs and result in an early finish to the Ukraine-Russia battle, officers stated including that the brand new regime could revive India-US tariff negotiations offering alternatives for additional increasing commerce.
The brand new authorities of the US is unlikely to disregard present international financial realities and geopolitical dynamics whereas taking any main coverage selections vis-à-vis India,and the second Donald Trump administration ( Trump 2.0) is anticipated to be extra partaking and cooperative, they added requesting anonymity. Whereas the worldwide geopolitical scenario has radically modified since early 2021, India’s financial energy and international standing have solely grown, , therefore commerce negotiations between the 2 companions could occur amicably and for mutual profit, they stated.
Additionally Learn | PM Modi speaks to Trump as India appears to be like ahead to renewed tryst
One of many individuals, a senior authorities functionary, stated the Narendra Modi authorities has labored cordially with all of the three regimes – the Obama administration, the Trump administration and the Joe Biden-Kamala Harris administration. Every time, the India-US financial relationship received strengthened. “Each Prime Minister Modi and President Trump are veteran world leaders with a typical agenda — a robust, secure and affluent world,” he stated.
Each authorities officers and business consultants stated that India and the US are poised to strengthen their strategic relationship as they’ve frequent objective – to strengthen democracy, cease unlawful immigration, verify cash laundering and crush terrorism.
Additionally Learn | What does Trump’s win imply for the world
The individuals admitted that Trump’s “America First” agenda can have impression on India’s commerce with the US, however may also present it a possibility when it comes to friend-shoring. The US should import a number of objects in an effort to defend Individuals from rising inflation and for these objects India could possibly be the popular provider if the US curbs Chinese language imports by way of increased tariffs, they identified. Throughout his marketing campaign, Trump stated he would impose a 10-20% tariff on all imports and a better tariff of 60-100% on Chinese language imports. That might make Indian clothes, footwear and toys aggressive within the American market.
“India and the US have lately resolved their disputes amicably, outdoors the WTO [World Trade Organisation]. The 2 international locations are at all times keen to barter all commerce issues, together with tariff points bilaterally, for mutual advantages,” a second official stated.
Ajay Sahai, director basic of the Federation of Indian Export Organisations (FIEO) stated each India and the US recognise one another’s strengths. “Nonetheless, America could cut price for extra market entry in areas like agriculture, medical units and IT {hardware}. The 2 companions will negotiate such issues whereas protecting sensitivities of one another in thoughts,” he stated.
Some consultants stated Trump’s election could improve uncertainty on a number of commerce points, however imagine that the top outcome will nonetheless be helpful from a bigger India-US perspective. “It can strengthen the general strategic partnership, particularly in defence area,” stated Nilaya Varma, CEO and founding father of consultancy agency Primus Companions including that the Trump administration may go with India to “counterbalance Chinese language affect” by boosting strategic partnerships and investments.
However there’s additionally a view that the US may take a protectionist flip, impacting India
Agneshwar Sen, partner-tax and financial coverage (Worldwide Commerce) at EY India stated that the US will use excessive tariffs “strategically to onshore manufacturing and alter present provide chains” that might see India going through increased tariffs on exports of textiles, chemical substances, pharma and auto/engineering merchandise. “India must both search different markets (which might be troublesome) or retaliate with its personal tariffs on US exports”.
The answer, Sen added, could possibly be a “commerce deal that’s enticing to the US “ and which additionally protects India’s pursuits.
If the commerce coverage measures, resembling across-the-board improve in customs tariffs, mentioned through the election marketing campaign, are carried out, “We could properly return to the pre-WTO period of a ‘spaghetti bowl’ of free commerce agreements. India will do properly to be absolutely ready and negotiate an FTA with the US. We should be prepared to debate a variety of points that might be placed on the desk,” he stated.
The US is considered one of India’s greatest commerce companions. It exported merchandise value $77.52 billion to India in 2023-24 and imported items value $42.2 billion. India exports medicine and prescription drugs, telecom devices, pearls, valuable and semi-precious stones, textiles and marine merchandise. It imports crude oil, petroleum merchandise, coal, IT {hardware}, ship, boats, electrical gear and different commodities from America.
