Donald Trump’s potential return to power in the United States is expected to significantly shift both the political and economic landscape, impacting countries worldwide. Experts suggest that while India could benefit from Trump’s policies, China may face considerable setbacks.
One of the primary reasons behind this change is that Trump is likely to reintroduce higher tariffs on China, which would directly affect the Chinese economy. Analysts also predict that India stands to gain the most from Trump’s return, especially in areas such as trade, investment, and employment. His policies could offer India the chance to further enhance its economic standing, contributing to the acceleration of its already robust growth.
U.S. Views India as a Strategic Partner
Many analysts believe that the United States considers India a key political partner in countering China. Additionally, as China faces increased pressure and its supply chains begin to shift, India is in a strong position to benefit from this transition. Over the last eight years, India and the U.S. have moved closer economically, a trend that is reflected in trade statistics. The commercial relationship between the two countries has expanded under both Trump’s and Biden’s administrations, and experts predict that this growth will continue should Trump return to power.
Expanding Trade and Services with the U.S.
India’s trade relationship with the U.S. has seen significant growth in recent years, particularly in the services sector. The U.S. has become a vital partner in India’s global services exports, especially in IT and professional services. Today, the U.S. accounts for nearly 18% of India’s total exports. Key items India exports to the U.S. include electronics, jewelry, pharmaceuticals, nuclear reactors, petroleum products, automobiles, and textiles.
The “China Plus One” Strategy: A Win for India
As the U.S. continues to distance itself from China, India is expected to gain from this shift in global trade dynamics. The growing trend of companies adopting the “China Plus One” strategy—diversifying supply chains away from China to other countries—could lead to India attracting more investment and trade. Nations like India and Vietnam are likely to see increased manufacturing and export opportunities as companies look to reduce their dependence on China. Indian companies, particularly in the automotive and electronics sectors, are expected to benefit from this shift.
India’s Growing Trade Surplus with the U.S.
India’s trade surplus with the U.S. has steadily grown in recent years, with notable increases during both the Trump and Biden administrations. In 2017, India’s trade surplus with the U.S. stood at $21.1 billion, and by 2020, it had increased to $22.2 billion. Under Biden, the surplus continued to rise, reaching $29.9 billion in 2021. Projections suggest the surplus will increase further, reaching $31.2 billion in 2023 and $39.3 billion in 2024.
