By: Ankit Kumar
Donald Trump’s return to the White House marks a significant political shift in the U.S. and beyond, ushering in a new phase of U.S. policy both domestically and internationally. Following the victory over Vice President Kamala Harris, Trump’s second term is set to bring policies aligned with his “America First” agenda, potentially reshaping the U.S. approach to trade, immigration, and global security.
Domestic And International Impact of Trump’s Policies
Trump’s 2024 campaign reiterated his core themes from his previous term: stricter immigration policies, protectionist economic measures, and conservative social stances. Backed by a Republican-controlled Senate, Trump has the momentum to advance these policies more decisively than in his previous term. Key policy areas include immigration reform, trade policies, and a reduction in U.S. involvement in international organisations.
Immigration Policies
In his campaign, Trump stressed the importance of stronger borders and proposed sweeping immigration reforms. His plans include terminating birthright citizenship and implementing stricter visa policies, which could significantly impact H-1B visa holders, many of whom are Indian nationals working in technology and engineering fields.
This stance could disrupt the lives of Indian professionals in the U.S. and raise challenges for aspiring immigrants. Trump’s rhetoric of reducing legal immigration pathways may lead to increased scrutiny of visa applications and make the immigration process more stringent for Indian families and professionals.
Economic Ramifications: “America First” And Its Effect on Trade with India
A hallmark of Trump’s agenda has been economic nationalism, with a focus on reducing trade deficits and bringing manufacturing jobs back to America. This “America First” approach could affect India-U.S. trade relations by imposing higher tariffs on imports, a strategy that could impact Indian exports to the U.S. and affect sectors such as IT services, pharmaceuticals, and textiles.
For the Indian economy, these trade restrictions may prompt concerns over a narrower U.S. market. Trump has hinted at renegotiating trade deals that he perceives as unfavourable to U.S. interests, and this may include agreements with India. However, some analysts suggest that Trump’s strong stance against China could open avenues for India to emerge as a strategic alternative partner, leveraging tensions to deepen economic ties.
Foreign Policy and Strategic Alliances: Potential Gains For India?
Trump’s renewed focus on a U.S.-led coalition against China could benefit India, particularly as tensions between India and China remain heightened. Analysts foresee a Trump administration continuing to encourage India’s role as a counterbalance to China in Asia. Trump’s past administration saw the U.S.-India defence relationship strengthen, with multiple defence agreements signed, and this trend may continue with India positioned as a key regional ally.
However, Trump’s scepticism toward NATO and other traditional alliances could signal a more unpredictable U.S. presence in global security frameworks. This unpredictability could lead India to recalibrate its foreign policy, seeking stronger ties with European and Asian powers to offset potential volatility in its relationship with the U.S.
Stock Markets and Economic Stability
Trump’s win had an immediate effect on financial markets worldwide, with investors reacting to potential policy changes that could impact global stability. Indian markets, sensitive to U.S. economic policy shifts, initially responded with a dip amid concerns over Trump’s trade policies and their impact on emerging economies like India. Analysts predict that if Trump implements tariff increases and limits on tech and services sectors, India’s stock markets could experience further volatility. However, India may benefit if Trump’s policies indirectly encourage Indian investment or redirect capital flows toward Asia amid U.S.-China tensions.
Environmental Policies and Climate Change
During his first term, Trump withdrew the U.S. from the Paris Agreement, and although the U.S. later rejoined under Biden, Trump’s re-election raises questions about the future of U.S. climate commitments. Trump’s emphasis on deregulation and prioritisation of American energy independence may lead to reduced U.S. involvement in global climate initiatives. This could put pressure on India, which is balancing its own energy needs with ambitious climate goals. A divergence on climate policy could impact collaborative efforts in renewable energy and emissions reduction.
What Lies Ahead
Trump’s leadership style and policy priorities could reshape not only U.S.-India relations but also the broader global political landscape. His focus on a transactional approach may redefine traditional alliances and lead to a more bilateral approach in international relations. For India, this means both challenges and opportunities. As Trump prioritises U.S. economic interests, India may need to navigate a more complex diplomatic landscape, positioning itself as a reliable ally while advancing its own strategic interests.
India’s strategic value as a regional counterbalance to China is likely to remain a significant factor in its relationship with the U.S. under Trump. However, India’s policymakers may need to adapt quickly to changes in U.S. trade policies, visa regulations, and geopolitical strategies, all of which could impact the Indian economy and its global partnerships.
