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Trump’s ‘America First’ policy: Opportunities and challenges for Indian businesses
India may benefit from strengthened U.S.-India ties under Trump’s trade policies, creating opportunities in pharmaceuticals and defense through the Indo-Pacific strategy.
U.S. President-elect Donald Trump prepares to exit after viewing the launch of the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas, U.S., November 19, 2024. Brandon Bell/Pool via REUTERS/File Photo / Reuters
Donald Trump's "America First" trade policy could significantly impact global trade and geopolitics, with mixed consequences for exporters worldwide.
As per a report from Motilal Oswal, a market analyst firm, the policy aims to prioritize U.S. manufacturing by reducing imports, particularly from China, creating both opportunities and challenges for countries like India.
India could see new opportunities and challenges under Donald Trump’s trade policies. Strengthened U.S.-India ties, especially through the Indo-Pacific defense strategy, may open doors for Indian businesses in pharmaceuticals and defense.
Global supply chain shifts, particularly in technology sectors like AI and semiconductors driven by the "China+1" strategy, could also boost India's role in these industries. Additionally, anticipated U.S. corporate tax cuts may lead to increased IT spending, benefiting India's IT exports.
However, challenges loom as higher U.S. tariffs and a stronger dollar could raise export costs for Indian IT and pharmaceutical sectors, making them less competitive. Geopolitical tensions between the U.S. and China might further disrupt trade and alliances, creating uncertainties.
Globally, retaliatory tariffs could hurt U.S. exports in agriculture and technology, while the EU’s potential tariffs on American goods may disrupt the automotive and steel trade.
While some countries, like Mexico, might attract more manufacturing, India faces a dual challenge of higher costs and stiffer competition.
The report underscores the importance of India staying agile and strategically aligned with global trends to maximize opportunities while mitigating risks.
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