Former US President Donald Trump made a remarkable comeback on Tuesday and defeated his Democrat rival Kamala Harris in race to the White House.
“This will be the golden age of America. America has given us an unprecedented mandate” said the President-Elect Trump in his victory address at West Palm Beach, Florida.
Meanwhile, as Trump returns to the Oval office, India keeps a close watch on what will Trump’s second term will bring for the country, as his administrative decisions could influence areas including commerce, financial markets and H-1B visa policies.
Following are the different sectors that might witness changes under Trump’s leadership:
Trade
The Trump administration would likely implement US-focused trade measures, requiring India to lower trade restrictions or risk increased tariffs, which subsequently affect Indian industries including IT, pharmaceuticals and textiles that are a major exported to US.
Trump’s balanced trade agenda might require India to adjust its trade approach, while potentially creating new commercial possibilities.
A report by Nomura research firm analyzed a Trump 2.0 presidency’s implications for American economics, international relations, financial sectors and global dynamics, particularly in Asia. The findings suggested India could benefit despite Trump’s firm positions on trade and currency.
The report identified two key trade challenges between India and America during Trump’s presidency. Firstly, India’s trade advantage with America might face increased scrutiny. Secondly, Trump’s administration might penalise trading partners suspected of currency manipulation. However, the analysis suggests America’s “China Plus One” strategy, aimed at diversifying supply chains away from China towards countries like India, could offset these temporary disruptions.
Indian stock market
Financial experts expect that a Trump victory would affect emerging markets, equities, and currency because of anti-globalisation policies.
“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,” said ICICI Bank’s head of economic research Sameer Narang said.
Trump’s restrictive trade policies could maintain robust US economic growth, enabling Wall Street to perform better than other global markets.
This scenario could trigger an increase in yields, particularly in long-term investments, as investors anticipate increased paper supply.
Additionally, it might lead to a stronger global USD position, decreased Brent crude prices, reduced global base metal prices due to Chinese growth impact, and elevated gold prices owing to increased safe-haven demand, according to ICICI Bank analysts.
H1-B visa rules
There were efforts to limit the H-1B visa programme through stricter eligibility requirements and enhanced application reviews during Trump’s first term. Now, the potential changes might include elevated wage requirements for H-1B holders to protect American employment opportunities. Furthermore, the programme might see reduced visa numbers and modifications to the cap system, prioritising candidates with advanced qualifications or specialist expertise.