“The upcoming US presidential election could have critical implications for India against the backdrop of escalating geopolitical tensions, change in leadership in Bangladesh, and fragile situation in South East Asia. With India navigating tensions in South Asia and managing strategic shifts in the Indo-Pacific, the US stance becomes crucial to preserve political stability in South Asia,” said PL Capital in its latest ‘India Strategy’ report.
If elected, Kamala Harris is likely to maintain the Biden administration’s multilateral, alliance-driven approach, while Donald Trump’s policies could see a resurgence of aggressive trade tactics, including potential tariffs and stricter immigration policies. However, the return of Donald Trump as president of USA might put some cold water on rising tensions and wars in Russia-Ukraine and the Middle East, it added.
The result of the U.S. presidential election is expected to have major impacts on the Indian economy and markets, particularly in defense, trade, and strategic partnerships between India and the U.S., a key investor in Indian technology, infrastructure, renewable energy, and manufacturing sectors.
Analysts indicate Trump’s economic plans could push inflation higher, as he aims to add tariffs on imports, raising the cost of foreign goods, while urging companies to increase U.S.-based production, which could further drive up prices. According to JM Financial, Trump’s policies are expansionary, with proposed corporate tax cuts that favor domestic manufacturing. He also plans to impose steep tariffs—up to 60% on Chinese imports and 10-20% on other imports—and has spoken about mass deportations, reducing aid to Ukraine, scaling back NATO involvement, while keeping support for Israel and Taiwan, and possibly expanding influence over the Federal Reserve. JM Financial projects these policies could lead to higher interest rates, a stronger U.S. dollar, and a slowdown in global growth.
In contrast, Harris’s policy approach is expected to maintain current trends. JM Financial highlights her focus on increasing taxes for corporations and wealthy individuals without affecting those earning below $400,000, keeping existing tariffs in place, managing immigration without large-scale deportations, and supporting Ukraine, NATO, Israel, and Taiwan without altering Federal Reserve policies.
