As Donald Trump returns as the next US President, India is poised to strengthen its position in global supply chains, particularly in technology sectors such as artificial intelligence (AI) and semiconductors. A report by Motilal Oswal Private Wealth (MOPW) highlights how previous investments and strategies like the ‘China+1’ policy could help India capitalize on shifting trade dynamics.
The report suggests that potential US corporate tax cuts under Trump could boost IT spending, benefiting Indian IT companies. Additionally, Indian businesses in pharmaceuticals and defence could gain from closer US-India collaboration, particularly within the framework of a strengthened Indo-Pacific defence strategy.
Trump’s second term promises economic growth but also brings the challenge of global trade tensions. Policies such as the ‘America First’ agenda, aimed at reducing imports—especially from China—to bolster US manufacturing, could significantly reshape international trade. This approach may drive higher tariffs and a stronger US dollar, presenting both challenges and opportunities for emerging markets.
For India, Trump’s fiscal and trade policies could lead to strategic realignments in sectors like IT and pharmaceuticals. Geopolitically, intensified tensions with China under Trump’s leadership may lead to shifts in alliances, with countries like Japan and South Korea reevaluating their positions.
The report also notes potential benefits for nations like Mexico, which could attract manufacturing operations redirected from China. Meanwhile, the European Union may seek greater self-reliance and explore alliances outside the US sphere of influence in response to Trump’s policies.
While India’s position in global trade appears promising, the report advises closely monitoring the impacts of Trump’s protectionist trade measures, particularly on India’s exports and economic interests.
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