In this final instalment of our US election series, we ask the only Q that matters to Indians: Will Washington remain India’s BFF—or turn into our worst frenemy? The answer: Yeah, we have good reason to worry—though perhaps far less than China.
Editor’s note: This ends a long-ass series on the US elections—and its surprising result. Earlier this week, we laid out why Donald Trump’s second tenure will likely mark the end of American hegemony—and what that means for various parts of the world. You can read the analysis of why Trump defeated Kamala Harris in this Big Story.
The good news: United in love… and hate
Trump’s first term was marked by spectacular celebrations of ModiTrump jodi—be it Howdy Modi in Texas or Namaste, Trump in Gujarat. They literally couldn’t keep their hands off each other:
The bromance blooms again: Modiji’s response to Trump’s second coming was suitably ecstatic. He was among the first to call to congratulate him on his "spectacular" victory. Unnamed sources—undoubtedly Indian—eagerly leaked details of the supposed lovefest:
The warm personal camaraderie between the two leaders came through in the telephonic conversation as Mr. Trump said the “whole world loves Modi” and described India as a magnificent country and the Prime Minister as a magnificent man, they added.
Trump is muy simpatico: Indian experts have sunny expectations of the Trump second term—primarily due to this super-duper chemistry—and, perhaps, a shared worldview. The badly-kept secret: “Many in New Delhi were secretly hoping that Trump would win because there would be less US hectoring about democracy and human rights.”
We all hate China: That’s the other glue that binds us together—a shared aversion to Beijing. It was good enough to keep Joe Biden sweet on India—despite our enduring affection for Moscow. There’s no reason it will change with Trump, who views the Chinese as Global Enemy #1. In fact, some foreign policy experts are positively giddy with excitement:
Trump is likely to deepen geopolitical engagement with India and the QUAD (a grouping of nations comprising the United States, India, Japan, and Australia), while intensifying contestation with China. As a result, New Delhi may attract more global supply chains and private investment. The defense and technology partnership is likely to get a boost.
We all ❤️ the lovely Vlad: Unlike Biden—who triggered the second Cold War with the Kremlin—Trump is soft on Russia and its leader. In fact, some describe him behaving like a besotted schoolboy around President Vladimir Putin. Ergo: His return to the White House will remove a key irritant in the US-India relationship:
Trump’s return makes it easier for India to continue balancing its close links with Russia, which supplies India with cheap oil and military equipment, while keeping US relations on track. Modi has come under pressure from Ukraine and the US for his ties with Putin. “India would find it easier to navigate its longstanding Russia relationship if President Trump were to negotiate a settlement to end the Ukraine war,” [Former Indian envoy to the US Meera] Shankar said.
We can enjoy the best of all worlds—without enduring a party-pooping White House’s disapproval. And there’s a good chance that the renewal of the Trump-Putin romance will make Moscow less dependent on Beijing—warming New Delhi’s heart even further.
But, but, but: A lot of this could just be wishful thinking. After all, as C Raja Mohan points out in Indian Express, his love for a good deal may trump (terrible pun intended) all others:
The US has operated under the assumption that boosting India’s capabilities is in America’s self-interest, especially in balancing China. But Trump is likely to demand some Indian ‘pro’ for American ‘quid’. India may find itself on a steep learning curve as it figures out there may be no ‘free lunch’ under Trump’s second term.
The bad news: The ‘T’ word
Where there is Trump, there is inevitably high anxiety. No one knows what the King of Chaos will actually do. But the noises he’s made on the campaign trail—and in the past—suggest great room for future unpleasantness. Let’s start with his love for tariffs—i.e import duties.
Mr Bees Percent: Trump plans to slap a 60% tax on all Chinese goods—and 20% on all others. This is terrible news for India. Our biggest trade partner and largest export market is the United States. In fact, over 80% of India’s IT export earnings come from the US. And it is one of the few countries with which we have a trade deficit in our favour—with a surplus of $30 billion. That 20% tax could cost us 0.1% of our GDP by 2028.
A timely reminder: In his first term, Trump did not let his Modi love stand in the way of punishing India for refusing to drop its high import duties on US products:
In 2019, he pulled India’s designation as a developing nation, a status that had allowed the South Asian country to export thousands of products duty-free to the US. India retaliated by imposing higher tariffs on several products from the US. In a second term, he could push hard for tax breaks and lower import duties for American companies like Tesla Inc. and Harley Davidson Inc., Indian officials said. He’s previously cited India’s high import tariffs as a hindrance to Harley Davidson’s expansion.
Make in India USA: Trump’s plan to make America great again is single-mindedly focused on forcing US businesses to ‘Make in America’ (there’s a reason he’s Modi’s bud). This is unhappy news for India—which has profited from US companies shifting their supply chains out of China:
He has this philosophy of onshoring, that is bringing manufacturing back to the U.S. rather than friendshoring which Biden used to talk about — that is encouraging businesses to move to friendly countries. So, the overall idea that U.S. businesses that are leaving China would think of India as an alternative — that model Trump may not encourage.
The question then is whether India can find other takers for the ‘Make in India’ vision.
An unexpected kick to the gut: Most experts expect the government to finally allow the rupee to fall—albeit in a controlled manner. Until now, the Reserve Bank of India has ploughed in much of its foreign exchange reserve in keeping our currency afloat. This may no longer be wise if the Chinese yuan starts to nosedive—as it did in Trump’s first term:
A depreciating yuan will lower the cost of Chinese goods, potentially leading to more imports and further widening India’s biggest trade deficit with any country… Keeping a tight lid on rupee in such a situation could further widen India’s trade gap with China, after it doubled in the last three years to nearly $83 billion in 2023.
This means our exports will become cheaper and, hopefully, more attractive. But as the dollar gets more expensive, so will many of our imports—most importantly, oil—which in turn will send prices soaring.
Reminder: India's top exports to the US are pharmaceuticals, telecom, pearls and precious and semi-precious stones, petroleum products, gold, cotton, iron ore, and electric machinery. In turn, we import crude oil, petroleum products, coal, ships and boats, electric machinery, computer hardware, and raw plastic materials.
More bad news: The immigration chakravyuh
We all know that immigration is Trump’s biggest bugbear—both the legal and illegal kind. He will crack down on both—without a doubt. The best case scenario for Indians: Trump will peg immigration entirely to merit—opening the doors to high-skilled techies and STEM graduate students—and fast-tracking their green cards. Unfortunately, it is likely to be poor consolation for the enormous immigration downside for Indians.
Citizenship nightmare: As you may know, Indians on H1-B work visas are on a 54-year waiting list for a green card. But they at least had the comfort of knowing that their children born in India were citizens—forever free of immigration woes. That could change under Trump—who has promised to get rid of ‘anchor babies’. The new law will require at least one parent to be a permanent resident or citizen—for the baby to qualify for citizenship.
Point to note: No one doubts Trump’s determination to pass this law. The only question is whether it is constitutional. The hope is that legal battles will at least keep the proposed law at bay until Trump leaves office—and a less extremist president comes along.
New H1-B woes: One of Trump’s closest and most senior advisors—Stephen Miller—has an enduring hatred for the work visa. He has been hatching a plan to end the H1-B program since Trump won the White House in 2014. This is what it looks like:
- No foreign graduate or undergraduate student will be eligible for an H1-B unless they have worked ten years outside the United States.
- There will be no Optional Practical Training (OPT) program—which currently allows international students to work in the country for 12 months after graduation—without a work permit.
- Anyone hired on an H1-B will have to earn a minimum salary of $110,000 a year. That was in 2014. The current figure will be higher.
- It will be easier for American employees to file lawsuits against companies—alleging discrimination.
The ‘half-full’ perspective: A State Bank of India report is already upselling the immigration squeeze as an opportunity for atmanirbharta:
Stricter H-1B rules may increase costs for Indian IT companies in the US, potentially reducing labour mobility and pressuring these firms to hire locally at higher costs. On the other hand, this shift may allow India to advance reforms in domestic production, self-sufficiency, and foreign investment.
To which any number of grumpy techies would say: ‘And pigs will fly’.
The bottomline: Many things may go wrong for India in a Trump presidency, but New Delhi will at least have this: A shared loathing for Justin Trudeau—and all things Canadian.
Reading list
Bloomberg News explains why Trump’s return is good for Modi’s global brand—and why the rupee is gonna fall. VOA News and Deutsche Welle offer overviews of the tariff issue. Economic Times has more on the threat to the H1-B program—while this older Forbes piece lays out the likely Trump plan. Times of India and NDTV report on likely citizenship woes of H1-B holders. Business Standard has more on the joys of atmanirbharta.
