India’s celebration of Donald Trump’s second coming as the 47th President of the United States of America is largely driven by his popularity among some sections of Indian society.
A major reason is Trump’s stance on issues like terrorism and immigration that resonates with some Hindu nationalist groups in India, who see him as a strong leader who will take a tough stance against Islamic extremism.
Quite a few Indians believe that Trump’s presidency shall lead to increased economic cooperation between the USA and India, particularly in areas like trade and technology.
Then there’s Trump’s unconventional and populist style of politics which appeals to some Indians who feel disillusioned with traditional politicians.
President Trump’s friendship with Prime Minister Narendra Modi and his positive statements about India during his campaign also contributed to his popularity among some Indians.
India, ‘Tariff King’
However, not all Indians have supported Trump’s candidacy. A major reason is that the tariff policies imposed on India during his first term were quite protectionist.
Trump has consistently labelled India a ‘tariff king’ in the first term (2017-2021), and even during his current campaign. There’s concern among Indian exporters to the US about when, and in what form, he will be imposing trade restrictions like in the past.
Let’s look at some of his Tariff Policies that have hurt India.
- Terminated India’s preferential market access to the United States in May 2019, citing India’s failure to provide reasonable access to its markets.
- Raised import duties on Indian steel and aluminum products.
Trump’s historic comeback for a second term also raises the question whether, like in his first term, he will again start a trade war with China – affecting India’s significant trade relationships with the US.
‘America First’ resonated once again from Trump’s victory podium – aiming to reduce the US trade deficit and promote domestic industries.
Resilient India
However, the silver lining for India could be its domestic demand-driven growth model and supply chain benefit — which may help mitigate potential trade frictions.
Overall, analysts predict that the Indian economy has reasons to be upbeat with Trump for the following reasons:
~ A ripple effect on India’s stock market is sure to happen with Trump extending tax cuts as his first action as president. This will make the saved money move towards equities – increasing investor confidence and boosting economic growth.
~ Resolving the Russia-Ukraine war, also on Trump’s priority list, will be a surefire way to bring about a drop in oil prices, reducing inflationary pressures – and consequently benefitting India’s economy too.
~ A weaker dollar, which Trump says will bring foreign investors, shall also make Indian exports more competitive in the global market.
Grover Cleveland won a non-consecutive second-term presidency 131 years ago. His ride was hitched on non-global issues. But Trump believes in being the bull in a china shop. The next four years may well be a roller coaster ride for India too.
