Republican candidate Donald Trump and his Democrat challenger Kamala Harris, locked neck and neck in the ongoing US Presidential elections, would impact India’s trade and industry in different ways if they win, according to a report by research body GTRI. However, with China, both are expected to tow the harsh line.
Trump may raise tariffs but be liberal on labour and environmental laws making it easier for Indian exporters to meet standards, while Harris is likely to be more friendly on the tariffs front, the report analysed.
“If Trump wins, he may extend tariffs beyond China to include India and other countries. Trump has previously called India a large tariff abuser, suggesting that a second term could bring tougher trade negotiations,” according to Ajay Srivastava, founder, GTRI.
America first
His “America first” agenda would likely push for protective measures, such as reciprocal tariffs on Indian goods, potentially adding barriers for key Indian exports such as automobiles, wines, textiles and pharmaceuticals, the report stated. These increases could make Indian products less competitive in the US, impacting revenue in these sectors.
During his stint as the US President between January 2017 and January 2021, Trump had labelled India as “tariff king”, imposed penal tariffs on Indian steel and aluminium, and removed India from the list of beneficiary developing countries for the GSP scheme that offers preferential market access for several products.
In contrast, a Harris administration would likely keep tariffs on Chinese goods but avoid escalating tariffs with allies like India, the report noted. “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,” it pointed out.
The US was India’s top export destination in 2023-24 with outbound shipments valued at $77.51 billion, while imports from the country were at $42.19 billion.
The expected easing of labour and environmental standards if Trump gets re-elected, could, however, make it easier for Indian exports to enter the US market. “Trump may also withdraw from the UNFCCC, as he did in his previous term with the Paris Agreement.. Reports indicate his advisors are preparing executive orders for a full exit, which would weaken global climate efforts. It would also dilute EU green laws like the CBAM,” the report stated.
In contrast, Harris would likely advocate for stronger labour and environmental standards in trade deals, it added.
Work visas
On the work visa front, Trump’s stricter immigration stance could lead to changes in visa rules, impacting Indian IT professionals and raising costs for Indian IT companies, the report cautioned.
A Harris administration would likely maintain current visa and outsourcing policies, allowing Indian IT firms continued access to the US market. Although some adjustments may be made to protect American jobs, her approach would likely be more moderate, enabling Indian companies to sustain their major role in the US IT sector,” it said.
Regardless of who wins, the US is expected to uphold high tariffs on Chinese imports, possibly revoke China’s Most Favoured Nation status, penalise Chinese companies operating abroad, expand subsidies through initiatives like the Inflation Reduction Act, and limit the WTO’s role, the analysis added.
