What a Donald Trump win US Election 2024 could mean for India – trade, strategy, and geopolitics

US Election 2024: In September 2019, then-US President Donald Trump hosted Prime Minister Narendra Modi in Texas at an event attended by an estimated 50,000 people. The ‘Howdy, Modi!’ event in Houston was billed as one of the largest-ever receptions of a foreign leader in the US. 

A year later, Modi welcomed Trump in his home state of Gujarat for an event attended by over 120,000 people.  Trump lost the US Presidential Election 2020 to Joe Biden. 

Four years later, Trump, 78, is again contesting US Presidential Election 2024 as the Republican candidate. This time against Kamala Harris, the Democratic nominee – months into Modi’s third term as PM. 

Three latest national poll surveys indicate that Vice President Harris is maintaining a slim lead over former President Trump as the two prepare for the upcoming US presidential election on November 5.

What if Trump becomes the President once again after US election results next month? How will it impact India? Mint takes a look.

The implications of a potential Trump presidency in the US for India depend on factors like foreign policy, trade relations, and strategic partnerships between the two nations. The overall outcome, however, would be driven by the broader geopolitical landscape and Trump’s policy decisions during his possible tenure.

70 years of diplomatic relations

“In marking 70 years of diplomatic relations between India and the United States, the leaders resolved to expand and deepen the strategic partnership between the countries and advance common objectives. Above all, these objectives include combating terrorist threats, promoting stability across the Indo-Pacific region, increasing free and fair trade, and strengthening energy linkages,” read the US-India joint statement when President Trump hosted PM Modi at the White House June 2017.

“President Trump and Prime Minister Modi expressed confidence that, together, the United States and India will provide strong leadership to address global challenges and build prosperity for their citizens in the decades to come,” the statement said

Many analysts view Trump as more favourable for India than Harris, given his anti-China and pro-Russia positions. This despite Harris’ Indian parentage. But then, there are concerns too, especially regarding possible challenges for India in trade and tariffs during the possible Trump presidency.

The Key Sectors

The impact on India can be largely broken down into five sectors – the strategic partnership, the immigration factor, the regional stability, trade and tariffs and the economic impact.

• When it comes to strategic issues between the two countries, Trump might as well continue to emphasise a US-India partnership in areas such as defence and counter-terrorism, considering the shared interest in countering China. India-US relations are often seen through the common China prism.
• The US will likely see changes in economic policies with a change in guard, if Trump is elected. This will certainly have ripple effects on the Indian economy, especially in the manufacturing and technology sectors.
• Trump has been the flagbearer of the ‘America First’ policy. His protectionist approach could impact trade and tariff agreements between the two countries, though analysts suggest some focus could be on strengthening ties.
• Like in his first term as US President, Trump’s immigration stance could not favour the Indian workforce, particularly the H-1B visa policies.
• In case of an aggressive stance in South Asia, a possible Trump administration could have implications on India’s relations with Pakistan and China.

Trump’s first term (2017-2021)

India-US relations significantly transformed during Trump’s first term as US president between 2017 and 2021. The four Trump years were marked by robust engagement, with a focus on strategic partnerships and shared geopolitical goals, considering China’s increasing presence in South Asia.

PM Modi’s visit to the US in 2019, followed by a state visit to India by President Trump in 2020, symbolised the enhanced bilateral relationship between the two countries.

India and the US deepened their defence ties through various agreements, including the Communications Compatibility and Security Agreement (COMCASA) in 2018. Both nations showed commitment towards combating terrorism.

The revival of the Quad involving the US, India, Japan, and Australia turned out to be an important initiative for regional security and countering China’s influence in the region.

Trade relations, however, saw ups and downs during Trump’s first term. Trump has called India a ‘tariff king.’ In fact, in May 2019, he terminated India’s preferential market access – the Generalised System of Preferences – to the United States accusing India of not giving the US reasonable access to its markets. He also raised import duty on Indian steel and aluminium products.

Beneficial for India?

A recent report by global financial services group Nomura said that President Donald Trump will be beneficial for India. A possible friction in bilateral trade due to Trump’s policies could be outweighed by supply chain benefits, and India will be a relative beneficiary due to its domestic demand-driven growth model and benefits from lower commodity prices, supply chain shifts and foreign policy, the report said.

“India and the US share deep economic and strategic interests that are unlikely to be compromised, irrespective of the election outcome,” the report says.