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Trump 2.0 and Atmanirbhar Bharat of Modi 3.0.: What It means for India?
Trump's focus on tax cuts, trade protection, and immigration could raise costs for India's IT sector if H-1B visas are restricted.
A recent report from the State Bank of India (SBI) suggests that a potential second term for Donald Trump in the U.S. presidency might challenge India’s economy but could also present unique opportunities, particularly for Prime Minister Narendra Modi’s Atmanirbhar Bharat initiative. With a focus on self-reliance, the initiative could gain momentum in domestic production and inward investment if Trump’s policies limit overseas expansion for global firms.
The report, titled US Presidential Election 2024: How Trump 2.0 Impacts India’s and Global Economy, states Trump’s policies are expected to focus on "tax cuts, trade protection, job growth, and controlling inflation," alongside a "tough stance on illegal immigration and business competition." With "America First" policies potentially introducing higher tariffs and stricter immigration rules, SBI analysts believe this could push India to further reform and attract investment locally.
A possible cap on H-1B visas is highlighted as a particular concern for Indian IT and IT-enabled service (ITeS) firms, which have long relied on these visas to deploy skilled workers to the U.S.
"If the Trump administration opts to limit work visas, particularly the H-1B visa program, Indian IT & ITes sectors may see increased costs. H-1B visa restrictions can lead to decreased labor mobility, affecting the hiring capabilities of Indian IT companies operating in the US," the report stated.
Despite these challenges, the report underscores that sectors like renewable energy, digital services, and manufacturing may continue to attract foreign direct investment (FDI) in India, even as some global companies might reconsider expanding abroad.
The report further noted, “While Trump’s policies may pose challenges, they also offer India an opportunity to strengthen its domestic manufacturing through its ‘Atmanirbhar Bharat’ initiative. We may look to accelerate reforms in domestic production, self-reliance, and inward investment.”
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