As the U.S. presidential race heats up, Modi Investors Service has provided an interesting analysis of how India’s gains could benefit from a second term under Donald Trump. The global credit rating agency highlights both the economic and geopolitical advantages India could see if Trump were to return to office.
Boost to Economic and Trade Ties
According to Modi, India is poised to gain from the continued strong economic and trade ties with the U.S. that were fostered under Trump’s first term. During his presidency, India saw a significant improvement in its economic standing, primarily due to increased cooperation in defense and technology sectors. Trump’s “America First” policies, which prioritized national economic growth, encouraged India to become a more prominent partner for the U.S.
A second Trump administration would likely continue this trend, with the possibility of further trade deals benefiting India. Both nations have aligned interests in various sectors, including defense, technology, and energy. Trump’s approach to India focused on reducing trade barriers and expanding the defense trade, which Modi suggests will only strengthen in a potential second term.
Defense and Technology Cooperation
Under Trump, U.S.-India relations deepened in the defense sector. The U.S. increased its arms sales to India, recognizing the country as a key ally in the Indo-Pacific region, especially given the rising influence of China. Modi predicts this relationship will continue to grow, with India benefiting from enhanced security arrangements.
In addition to defense, the technology sector is another area where India stands to gain. During Trump’s presidency, the U.S. and India explored opportunities for collaboration in emerging technologies such as artificial intelligence, cybersecurity, and space exploration. Trump’s administration also supported policies that encouraged tech investments in India, helping Indian tech companies expand their footprint in the U.S. market. This positive momentum is expected to continue in a second term.
Challenges and Risks: The “America First” Agenda
While the potential benefits are clear, Modi also points out that Trump’s “America First” policies could present challenges for India. Trump’s approach often prioritized U.S. interests over multilateral agreements, which led to trade tensions with several countries, including India. For example, tariffs on Indian goods were a point of contention during Trump’s first term.
Furthermore, Trump’s immigration policies, which included restrictions on H-1B visas—a key pathway for Indian professionals—could affect the flow of talent between the two countries. Although a second Trump term might bring stronger trade ties, these restrictions may limit India’s ability to fully capitalize on economic opportunities in the U.S.
Strategic Partnerships and Geopolitical Influence
One of the key areas where India could see a boost is its geopolitical position. Trump’s foreign policy decisions have increasingly aligned with India’s interests, particularly in countering China’s growing influence in the Indo-Pacific region. Through initiatives like the Quad—an informal security group comprising the U.S., Japan, India, and Australia—Trump strengthened India’s strategic role in global security.
Under a second Trump administration, it’s expected that India would continue to play a crucial role in maintaining a balance of power in the region. This could bring increased cooperation in defense and intelligence-sharing, further enhancing India’s geopolitical standing.
Conclusion: A Complex Relationship
While a second Trump presidency offers India the prospect of strengthened economic and defense ties, it also poses challenges. Modi assessment suggests that India will need to carefully navigate the trade tensions and immigration restrictions that could arise. However, the overall outlook is one of cautious optimism, with India likely to benefit from a more prominent role on the global stage, both economically and geopolitically, under Trump’s leadership.
In conclusion, India has much to gain from a Donald Trump presidency, provided it can balance the complexities of Trump’s policies with its own national interests.
