Trump, who has shown a keen interest in enhancing ties with India, has made public commitments to strengthening what he calls the “great partnership” between the two nations. In a recent post on X, timed just ahead of the US election, Trump reaffirmed his friendship with Prime Minister Narendra Modi, celebrating their close diplomatic relationship.
The US is the largest destination for Indian merchandise exports. In 2023-24, imports into India from the US amounted to $42.2 billion, while exports from India were valued at $77.52 billion.
During Trump’s presidency from 2017 to 2021, India-US relations saw notable progress, aided by the strong personal rapport between Trump and Prime Minister Narendra Modi. Their chemistry translated into tangible results, aligning Trump’s policies on China with India’s strategic objectives. Both leaders viewed China’s rise as a security challenge, working together to enhance defence ties, expand economic cooperation, and deepen their Indo-Pacific collaboration.High-profile events like “Howdy Modi” in Houston in 2019 and “Namaste Trump” in India in 2020 showcased the strengthening of their strategic partnership, culminating in the elevation to the US -India Strategic Comprehensive Global Partnership.ALSO READ: US election result date: Trump or Kamala Harris? When will we know the winner?
Trump’s tariff tiff with ‘abuser’ India
However, it hasn’t been all rosy in the past. During his first term as president, Trump labelled India a “tariff king”. In an interview last August, Trump criticised India’s tax rates, asserting that they were excessively high.
In 2019, India had imposed retaliatory tariffs on several U.S. products. This was in response to Washington’s refusal to exempt Delhi from increased taxes on steel and aluminum imports. Trump, in his last stint as the US president, had also withdrawn India’s preferential trade treatment amid tariff dispute. Trump, back then, had also threatened sanctions if India proceeded with purchasing oil from Iran or moved forward with its plans to acquire Russian S-400 anti-aircraft missiles.
As president, Trump had raised the issue of high tariffs on Harley-Davidson motorcycles. The iconic Harley-Davidson motorcycle became a key reference point for Trump when criticising what he perceived as an imbalanced trade relationship with India. Last year, he once again highlighted India’s high taxes on certain American products, particularly Harley-Davidson motorcycles, threatening to impose reciprocal tariffs if he returned to power.
In September, Trump spoke of US-India trade relations and called India a “very big abuser” of tariffs, while he called India’s Prime Minister Narendra Modi a “fantastic man”. Is Trump a friend or a foe of India? His remarks on India and Indians didn’t paint a clear picture of his stance.
How would Donald Trump’s win impact India-U.S. trade ties?
A Trump administration would likely pursue US-centric trade policies, pushing India to reduce trade barriers or face tariffs. This could impact key Indian sectors like IT, pharmaceuticals, and textiles, which have considerable US market exports.
By pushing for balanced trade, Trump’s approach may challenge India to recalibrate its trade strategies, though it also opens doors for potential opportunities.
“If Donald Trump is going to win the elections, he may try to enhance the ongoing trade ties with India as he has mentioned that Narendra Modi is his good friend during his various election rallies,” says Dr Amit Singh, Associate Professor, Special Centre for National Security Studies.
On other hand, Trump always advocated America & American first principle and if he is going to follow this as a policy it may impact India-US trade negatively, he adds.
A September report from market research firm Nomura evaluated the potential effects of a Trump 2.0 presidency on the U.S. economy, geopolitics, financial markets, and the global landscape, with a particular focus on Asia. The report suggested that, despite his tough stance on trade and the dollar, Trump could be beneficial for India.
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The report highlighted two primary sources of trade friction between India and the U.S. during a Trump presidency. First, India’s trade surplus with the U.S. may attract scrutiny under Trump 2.0. Second, the Trump administration could implement punitive measures against trading partners perceived as artificially devaluing their currencies. However, the report indicates that these short-term disruptions are likely to be mitigated by America’s “China Plus One” strategy, which aims to shift supply chains away from China to more favorable countries like India. This policy is expected to gain momentum under Trump.
The China factor:
For India, the long-term benefits of the US anti-China stance are likely to persist.
With the US moving away from reliance on Chinese manufacturing, India stands to gain as a trade and investment partner.
A report by JM Financial Institutional Securities says, if Republicans win, it will accelerate tariffs on Chinese imports, reinforcing the “China+1” strategy and opening new export avenues for Indian auto component manufacturers. This will increase India’s share in global supply chains, though higher tariffs might require Indian manufacturers to increase their presence in the U.S., the report anticipated.
Impact on different sectors:
Trump’s victory in the US election might influence commodity prices, given past tariff policies that disrupted global trade flows. Higher tariffs on Chinese metals could prompt Indian metal exporters to benefit, though price instability could affect long-term profitability, the JM Financial Institutional Securities report added.
Interestingly, the report says that Trump’s stance on China is expected to further open up the U.S. market for Indian chemical exports. It will potentially offset the tariffs India faces, benefiting the country, the report mentioned.
The textile and tile sectors, especially the Morbi ceramic industry, could see increased demand under a Trump administration as tariffs on Chinese goods push U.S. buyers to seek alternatives. It further added that Trump’s victory will potentially benefit India’s wire and cable industry, with possible enhanced demand from the U.S. due to the restricted imports from China.
As per the analysis, the Indian pharmaceutical sector will be largely unaffected despite the Biden administration’s policy to permit Medicare to negotiate drug prices, set to commence in 2026. Republicans could potentially repeal or limit these negotiations, altering market dynamics but having minimal impact on India’s pharmaceutical exports.