Former U.S. President Donald Trump made a stunning return to the White House on Tuesday, winning over Democratic candidate Kamala Harris. In his victory speech at West Palm Beach, Florida, Trump expressed optimism about the future. “This will be the golden age of America. America has given us an unprecedented mandate,” he stated, underscoring his vision for the nation under his renewed leadership.
As Trump prepares to take office again, India closely observes how his policy decisions might impact areas such as trade, finance, and the H-1B visa program. Here’s how Trump’s policies could shape key sectors in India:
Trade Relations
Under Trump’s leadership, the administration is anticipated to advocate for U.S.-centric trade policies, possibly urging India to ease trade restrictions or face higher tariffs. Such moves could impact key Indian industries, including information technology, pharmaceuticals, and textiles, all of which export significantly to the U.S. Trump’s focus on balanced trade might prompt India to revisit its trade strategy while potentially opening up new business opportunities.
A Nomura research report assessed the economic and geopolitical consequences of Trump’s second term, particularly for American financial sectors and Asian nations, with a specific focus on India. The analysis suggests that although Trump might adopt a strict stance on trade and currency, India could still benefit. The report highlights two primary trade issues between India and the U.S. during Trump’s term. Firstly, India’s existing trade surplus with the U.S. could be examined more critically, potentially subjecting Indian goods to new tariffs. Secondly, trading partners perceived as manipulating currency might face penalties. However, the report notes that the “China Plus One” approach, which encourages shifting supply chains from China to other countries like India, could help India offset some of these potential trade disruptions.
Impact on the Indian Stock Market
Trump’s potential impact on emerging markets, equity prices, and currency values raises questions among financial experts due to his anti-globalization policies. Sameer Narang, ICICI Bank’s head of economic research, weighed in: “If Trump is elected as President, it could imply higher rates, gold prices, and global USD regime than our base-case forecasts, while crude prices could be lower. A Harris victory could mean that the markets could trade closer to our base-case projections with rates likely to ease and global USD to trade flat.”
Trump’s approach to trade could strengthen U.S. economic growth, enabling Wall Street to outperform other global markets. This could potentially lead to rising yields, especially on long-term investments, as investors anticipate more government bond issuance. Analysts from ICICI Bank suggest that a second Trump term could also bolster the global position of the U.S. dollar, reduce Brent crude prices, and lower global base metal prices, reflecting shifts in Chinese growth. At the same time, gold prices might increase due to a rise in demand for safe-haven assets.
H-1B Visa Policy Adjustments
During his previous term, Trump’s administration imposed stricter rules on the H-1B visa program, making eligibility requirements more rigorous and enhancing application reviews. Moving forward, Trump may consider increasing the wage thresholds for H-1B visa holders, aiming to safeguard American jobs. This could mean fewer available visas and a restructuring of the cap system to prioritize applicants with specialized skills or advanced degrees.
The possible changes to the H-1B visa program may directly impact Indian workers, as a significant number of H-1B holders originate from India. Should the new administration proceed with these adjustments, it could reshape the dynamics of U.S.-India workforce exchange, affecting Indian IT and tech companies that rely on sending skilled workers to the U.S.
In summary, Trump’s return to the Oval Office brings potential shifts across several sectors that could influence the trajectory of U.S.-India relations. From trade policies to stock market dynamics and immigration reforms, India’s future interactions with the U.S. will likely depend on how Trump navigates his administration’s economic and international priorities.
