Chennai: As the US is the largest trading partner of India, accounting for over $190 billion in annual trade, the presidential elections in the country will impact Indian imports and exports. Donald Trump’s presidency can bring direct challenges for India in tariffs and outsourcing, while Kamala Harris' administration would likely maintain a more balanced relationship. Both candidates, however, are expected to focus on reducing reliance on China, aligning with some of India’s strategic goals.
Trump’s “America First” agenda may lead to higher tariffs on Indian goods, especially in key sectors like automobiles, wines, textiles, and pharmaceuticals. These increases could make Indian products less competitive in the US, impacting revenue in these sectors, finds Ajay Srivastava, founder of GTRI.
In contrast, a Harris administration would likely keep tariffs on Chinese goods but avoid escalating tariffs with allies like India. Harris might pursue negotiations to reduce certain tariff barriers, providing India with more predictability and possibly lower tariffs on some goods. Additionally, a tougher US stance on China could create new opportunities for Indian exporters.
According to Ajay Sahai, director general, and CEO of the Federation of Indian Export Organisations, the tariff war might escalate under the Trump administration. “However, we will have to wait to see if the tariff differential between China and India will be beneficial for us. Both candidates will push for more local manufacturing,” he said.
Over 80 per cent of India’s IT export earnings come from the US, making it vulnerable to changes in visa policies. Trump could tighten H-1B rules, impacting costs and growth for Indian IT firms, while Harris might take a moderate approach, allowing continued access to the US market.
Both candidates are likely to support subsidies for US manufacturing through the Inflation Reduction Act, despite potential conflicts with WTO rules. This mirrors India’s “Make in India” initiative on a smaller scale, highlighting the need for India to protect its own industrial policies amid evolving global trade practices, finds GTRI.
If Trump is re-elected, he is expected to ease labour and environmental standards, which could make it easier for Indian exports to enter the US market. In contrast, Harris would likely advocate for stronger labour and environmental standards in trade deals. This would increase compliance costs for Indian manufacturers.
“Trump might push for market access for dairy products, rake up issues regarding laptops and price control on medical equipment. In both cases, US investments in India’s IT infrastructure, services, green energy, aviation and defence are expected to continue,” said Sahai.
