Trump 2.0: Opportunities and Challenges for India

As Trump returns to the White House, India will likely adapt and engage in strategic diplomacy to leverage the strengths of this relationship while addressing any challenges that may arise

Saturday November 9, 2024 0:47 AM, Mohd Ziyaullah Khan

[Trump and Modi in a 2020 file photo.]

Donald Trump’s return to the U.S. presidency has sparked global discussions, and India is no exception. When it comes to Indian’ context, our nation carries unique implications.

Trump’s approach to foreign policy, trade, and defense aligns differently than his erstwhile president, and his previous tenure significantly influenced U.S.-India relations.

With Trump returning to power in January, it would be interesting to explores what it could mean for India, addressing key areas such as trade relations, defense partnerships, strategic alliances, and the impact on Indian diaspora.

Strengthening Strategic and Defense Ties

One of Trump’s notable foreign policy stances was his focus on countering China’s influence globally, an agenda that resonated with India given its ongoing border and strategic tensions with China. During Trump’s previous administration, defense cooperation with India increased substantially.

Reinforcing the Indo-Pacific Strategy: The Indo-Pacific region has been a strategic point of concern for both India and the United States. During Trump’s tenure, the “Free and Open Indo-Pacific” strategy emphasized ensuring a rules-based order to counter China’s expanding reach. This approach fostered a stronger Quad alliance—comprising the U.S., India, Japan, and Australia. Trump’s return could mean a renewed vigor in supporting the Quad, which aligns with India’s strategic interests in the region.
Increased Defense Collaborations: Trump’s administration lifted barriers for technology transfers to India, advancing deals that included helicopters, surveillance drones, and defense systems. India became a “Major Defense Partner,” strengthening access to American defense technology. Trump’s return could likely bolster these developments, with possible expansions in joint military exercises, defense exports, and intelligence sharing.
Trade Relations - Between Growth and Protectionism: Trade relations between India and the U.S. have long been complex. Trump’s “America First” stance included a fair amount of protectionist policies that impacted India, but his emphasis on reducing trade imbalances also pushed for new agreements in agriculture, manufacturing, and technology.
Revisiting Tariffs and Trade Barriers: Under Trump, the U.S. imposed tariffs on Indian goods like steel and aluminum, affecting trade dynamics. Trump also removed India from the Generalized System of Preferences (GSP) in 2019, which impacted Indian exports to the U.S. If he returns, India could push to reinstate the GSP and negotiate lower tariffs. However, Trump’s known preference for protective tariffs could mean a mixed outcome for India-U.S. trade relations.
Potential for Enhanced Bilateral Agreements: While Trump’s protectionist measures impacted trade, his administration also sought more favorable trade terms. India and the U.S. made progress on discussions for a limited trade deal covering key sectors such as agriculture, medical devices, and e-commerce. With Trump’s return, such negotiations could resume, potentially benefiting Indian exporters in sectors like textiles, electronics, and pharmaceuticals.

Immigration and the Indian Diaspora

Trump’s approach to immigration policy had both positive and challenging outcomes for Indian immigrants, especially in areas like the H-1B visa program, which many Indian tech professionals rely on.

H-1B Visa and Immigration Policies: The H-1B visa program, critical for Indian IT professionals, saw tighter regulations under Trump’s “Buy American, Hire American” executive order. The policy aimed to protect U.S. workers but inadvertently affected skilled Indian workers and companies. A second Trump administration could mean renewed restrictions, but there could also be attempts to streamline the program for skilled professionals, balancing domestic labor priorities with economic needs.
Stronger Support for the Indian Diaspora: Despite immigration restrictions, Trump’s administration had strong support from the Indian diaspora in the U.S., a relationship highlighted by events like “Howdy Modi” and “Namaste Trump.” These gatherings demonstrated Trump’s popularity among Indian Americans and his administration’s commitment to strengthening ties with the community. His return could foster similar outreach efforts, enhancing India’s soft power in the U.S.

Geopolitical Dynamics and India’s Global Position

Trump’s distinct stance on international institutions, sanctions, and global alliances has implications for India’s positioning in the global arena. His approach to issues like the Iran nuclear deal and relations with Russia could impact India’s own foreign policy.

Approach to China and Russia: Trump’s administration took a hard stance on China, imposing tariffs and criticizing its handling of global issues, a stance that aligns with India’s own concerns. A renewed Trump presidency could further isolate China, indirectly benefiting India’s standing. However, Trump’s unpredictable relationship with Russia could present challenges, as India maintains strategic ties with both countries. India would need to navigate this complex dynamic carefully.
Impact on Energy Security and Relations with Iran: Trump’s withdrawal from the Iran nuclear deal led to sanctions that affected India’s oil imports from Iran, impacting its energy security. With the possibility of Trump returning to power, a similar stance could limit India’s options for energy sourcing. Additionally, Trump’s close relations with Saudi Arabia could influence oil prices, impacting India, one of the largest oil-importing countries.

Technology and Digital Cooperation

As India’s digital economy continues to grow, cooperation in technology sectors, particularly in areas like 5G, cybersecurity, and data security, becomes increasingly important. Trump’s policies on tech transfers and digital infrastructure could open new doors for collaboration.

Expanding 5G and Emerging Technologies: The previous Trump administration placed restrictions on China’s Huawei, pushing allies to consider alternatives in 5G infrastructure. India, which has been cautious with Huawei, could find increased U.S. support in expanding secure 5G networks and digital infrastructure. This could boost technology partnerships, with American firms investing in India’s tech landscape.
Cybersecurity Collaboration: With increasing cyber threats, collaboration between India and the U.S. on cybersecurity initiatives is vital. Trump’s focus on protecting American interests through digital security measures could open avenues for joint efforts in combating cyber threats, benefiting both nations in safeguarding their digital ecosystems.

Economic Policies and Investment Prospects

Trump’s economic policies, including tax cuts and deregulation, impacted global investment trends. A similar approach in a second term could influence U.S. investments in India, affecting areas like technology, manufacturing, and financial services.

Increased Investment in Key Sectors: India has been a significant recipient of U.S. investments, especially in sectors like technology, manufacturing, and e-commerce. A renewed Trump administration could support policies encouraging American companies to invest in India’s rapidly growing markets. Additionally, initiatives like “Make in India” and “Atmanirbhar Bharat” align with Trump’s own focus on self-reliance, potentially fostering collaborative investment opportunities.
Challenges with Economic Policies: While Trump’s policies could boost investment, potential trade imbalances and protectionist stances may create friction. India might face challenges if Trump reinstates tariffs on imports or takes a firm stand on reducing the trade deficit, requiring careful negotiation to maintain a balanced economic relationship.

Conclusion

The return of Donald Trump to power holds both opportunities and challenges for India. His approach to defense, trade, and foreign relations could align with India’s strategic interests, especially in countering China’s influence.

However, Trump’s protectionist policies and immigration stance could require careful negotiation to balance India’s economic and human resource interests. India has emerged as a significant partner for the U.S., with both nations recognizing the importance of a strong, cooperative relationship in a complex global landscape.

As Trump returns to the White House, India will likely adapt and engage in strategic diplomacy to leverage the strengths of this relationship while addressing any challenges that may arise.

[The writer, Mohd Ziyaullah Khan, is a freelance content writer based in Nagpur. He is also an activist and social entrepreneur, co-founder of the group TruthScape, a team of digital activists fighting disinformation on social media.]

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