Amitabh Dubey
Indian Americans are reportedly voting for Kamala Harris over Donald Trump by a margin of 2 to 1. Some Indians, though, are dizzy with admiration for Trump. After all, his White supremacist appeal is the mirror-image of their majoritarian drive in India.
But Trump is bad news for New Delhi, especially in his second coming. He will likely initiate a trade war — primarily with China but also with India, whom he described on 17 September as a “very big abuser” of bilateral trade. The consequences for India of his promised 10-20 per cent global import tariffs will very likely be rupee volatility, tighter monetary policy and therefore slower economic growth in India. Notably, Harris is proposing nothing of this kind — her main economic quibble will be India’s record trade with Russia in the context of the Ukraine war.
Theoretically, a trade war between the United States and China could help India. Trump has promised a higher 60 per cent tariff on imports from China. This could encourage companies pursuing “China+1” policies — offsetting their dependence on Beijing by investing more in other emerging markets — to diversify toward India. However, supply chains are difficult to build in high-tariff environments. High tariffs on imported parts make it less attractive to build products for export. And Trump or not, India has taken a far more protectionist turn under Prime Minister Narendra Modi — something we will discuss below.
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