As Donald Trump takes oath as the 47th US President, the Ministry of External Affairs mandarins will be busy watching every step he takes, the executive orders he signs and the decisions he takes in the next few days or weeks. Will the India-US ties soar riding on the crest of bonhomie between Indian Prime Minister Narendra Modi and the US President and their shared political approach, branded conservative? Or will the ultra-nationalist politics of Trump negate all the positive vibes shared by the two democracies of the world?

Donald Trump Snubs India

The euphoria over Donald Trump’s victory in the US Presidential Election, exhibited by the Hindu American Foundation, which has its roots in Vishwa Hindu Parishad America and its student wing, the Hindu Students Council, has already subsided.

PM Modi has not been invited to the Trump inauguration. However, Washington lost no time in extending the invitation to Xi Jinping of chief adversary China, Italian PM Giorgia Meloni and even former Brazilian President Jair Bolsonaro.

Political analysts see it as a snub to New Delhi. S Jaishankar will join foreign ministers of other Quad member nations at the Capitol Hill, but Washington appears to have sent a strong message.

‘America First’ Rhetoric May Go Against India

Foreign affairs experts believe, India may find it difficult to synchronise its own ultra-nationalist rhetoric with the “America First” narrtaive, set by Donald Trump to appeal to those who believe, the US has been relegated to the sidelines despite spending billions of dollars and sacrificing its servicemen to the world politics.

Indian Prime Minister set the enthusiasm of Republicans and Donald Trump soaring when he declared “Abki Baar Trump Sarkaar” in Howdy Modi programme held at NRG Stadium in Houston, Texas, on September 22, 2019.

However, when the then US President visited India in February 2020, he warned India of imposing punitive tariffs if it did not open its market to the US firms.

How Much Tariff Will Trump Impose On Indian Goods?

To the chagrin to India, Donald Trump still believes that New Delhi does not provide the US firms an even playing field, adopts protectionist policies and harms the US economy.

Analysts believe, Donald Trump may impose 60% tariff on some of the Chinese products and spare India of such a high level of duties. But, he is most likely to impose at least 10% tariffs on all imports, including those coming from India.

Will India-US Bilateral Trade Be Hit?

According to the government data, India’s exports to the US in FY 2023-24 reached $77.51 billion, while imports jumped to $42.2 billion. It amounted to a trade surplus of $ 35.51 billion.

India exports engineering goods, electronic goods, gems and jewellery, pharmaceutical products, light crude oil and petroleum, electrical, and others to the US.

If reports are to be believed, more than 80% of India’s IT export earnings come from the US alone.

According to government data, India exported IT software services worth $190.7 billion in 2022-23. The US was the largest destination, accounting for 54% of the total.

US FDI In India

The US trade organisations and their lobbyists are also not happy with the Foreign Direct Investment in India. With $51.6 billion investment, the US was the largest source of FDI in 2022.

According to the Department of Promotion of Investment and Internal Trade (DPIIT), the US investment between FY 2000 and 2024 crossed the $ 1 trillion mark.

According to American Soil report, India invested $80 billion into the United States in 2023, creating more than 400,000 jobs.

Analysts believe, Donald Trump wants to encourage Indian investment in the US.

Will Donald Trump Crack Whip?

If media reports are to be believed, Joe Biden administration was not averse to the idea of pushing the US industry to India, provided it earned profits and have geopolitical advantage. Experts believe, the Trump administration will not encourage such politices.

The new depensation in Washington may also argue against the domestic regulatory climate in India, as the US businesses have raised this issue may times in the past. Now, they have a president with America First philosophy.

H1 B Visa: Indians At Disadvantage?

Though Indian professionals dominate the Silicon Valley, they have also invited envy and wrath from the domestic professionals and firms, who have successfully lobbied against India.

The US has changed the conditions for opening startups and this may adversely impact those people of Indian origin, who may want to open their own shops. They may have to hire more US citizens and the minimum salary for those seeking H1 B Visa too has been increased.

Besides, the US companies making petitions for the H-1B visas, must now show the availability of a legitimate “speciality job”.

These companies may come under pressure as the Department of Homeland Security can ask them to furnish documents to verify the job’s authenticity.

Can India Exploit US-China Trade War?

Analysts believe, India needs to adjust its policies to the emerging business ecosystem of the US. “America First” and “Make America Great Again” have catapulted Donald Trump to the White House, these policies will stay in the US at least for next four years.

Experts believe India should use the opportunity and exploit the void that may be created due to the possible tariff war between the US and China. What is a disadvantage for Beijing. It may be an advantage for India. However, New Delhi needs to work smartly and tweak its policies accordingly.

Despite the possible trade war with China, Donald Trump dialled Xi Jinping personally and discussed many issues. The two countries may have problems ranging from tariff to Taiwan, from Quad to Indo-Pacific and many more issues. Trump’s eagerness shows that he is ready to talk to his adversaries if these suit him. Experts believe, India needs to talk to the US policymakers and wokr closely to take advantage of the situation, rather than antagonising the US interest.