Contents :
- What Trump 2.0 means for India
- A win that will affect the global economy
What Trump 2.0 means for India
Context:
A second Trump administration may reshape India-U.S. relations, offering both strategic opportunities and renewed challenges.
Relevance: GS 2 ( International Relations )
Practice Question: Analyse the possible opportunities and challenges for India-U.S. relations in the event of a second Trump regime. (150 words )
Positive Areas for India-U.S. Relations under Trump:
Economic co-operation :
- Trump aims to strengthen trade with India, reviving Free Trade Agreement discussions from 2019-2020.
- India could benefit from technology transfer, defence purchases, and greater access to U.S. markets.
Energy Collaborations:
- Trump likely favours increasing India’s purchase of U.S. oil and LNG, as seen in the past MoU for investment in the Driftwood LNG plant.
Democratic Norms:
- Unlike the Biden administration, Trump’s policies may reduce scrutiny on India’s human rights, minority issues, and NGO regulations.
On Khalistan Activism:
- Expected a stricter approach towards Khalistani groups, promoting India’s stance.
Stronger Stance on Canada:
- Trump’s stance may align with India’s current tensions with Ottawa, particularly around the Nijjar case and related diplomatic disputes.
Potential Trouble Areas :
Trade Disputes:
- Trump’s tariff policies led to U.S.-India trade frictions, including WTO disputes and the removal of India’s GSP ( The Generalized System of Preferences )status.
Unpredictable Communication:
- Trump’s tendency to reveal or exaggerate private discussions with world leaders potentially complicate diplomatic relations.
- For Instance, his comments on Kashmir with Pakistan’s Imran Khan and statements on the LAC standoff with China.
Pressure on Allies :
- Trump can adopt a coercive approach to allies.
- For example, his pressure on India to halt Iranian oil imports strained India-Iran relations, affecting India’s energy security.
Inconsistent South Asia Focus:
- Pakistan and Bangladesh may experience policy shifts. Reduced U.S. aid and attention might increase these countries’ dependency on other powers, like China, shifting regional balances.
Complex Middle East Relations:
- With Trump’s warm relations with Russia, India may find it easier to balance ties with Moscow.
- Trump’s approach to Israel, Iran, and the Gulf countries may affect India’s trade, energy interests, and security.
Conclusion:
Trump 2.0 promises deeper economic and strategic ties, but India must cautiously navigate the complexities of his unpredictable approach to maintain a balanced and mutually beneficial partnership.
A win that will affect the global economy
Context:
Trump’s victory may reshape the global economy, with significant implications for trade, inflation, and international relations.
Relevance: GS 2 ( International Relations )
Practice Question:Evaluate how a Trump-led U.S. administration’s protectionist policies might impact global trade and inflation, with a special focus on emerging economies like India. (250 words )
Trade Sector :
- The USA may shift back to protectionist policies, particularly with China and India. This could involve raising tariffs on imported goods, particularly targeting China with tariffs as high as 60%.
- The U.S. is India’s second-largest trading partner, with a trade surplus in India’s favour ($36.74 billion). Trump’s protectionist approach could involve tariffs or import restrictions on Indian goods.
- Focus on Bilateral Deals: Trump’s preference for bilateral over multilateral trade could undermine global institutions like the WTO and may impact smaller economies.
Inflation :
- Proposed import tariffs (e.g., 10% on all imports) could drive up consumer prices in the U.S., leading to increased inflation domestically and ripple through global supply chains.
China’s Concerns :
- China as a Key Target: China’s substantial trade surplus with the U.S. ($380 billion) makes it a primary focus for Trump’s trade policies.
- China may face significant trade barriers on certain products (e.g., electric vehicles in the EU and steel in India) limiting its reach.
Impact on India’s Key Sectors :
- Trump’s policies could again limit H1B and L1 visa approvals for skilled Indian workers, particularly affecting the IT sector.
- Indian companies might need to hire more U.S.-based workers, as seen with Infosys, which employed 10,000 American workers in response to prior restrictions.
- Pharmaceuticals: Indian Pharma and generic drugs could face more stringent regulatory or tariff barriers.
Energy Sector
- Increased Fossil Fuel Production: Trump’s pledges to expand oil and natural gas exploration which hampers U.S. commitment to climate goals.
NATO and Allies
- Strained NATO Partnerships: During his first term, Trump’s often contentious approach toward NATO and European allies signalled a shift from U.S.-EU cooperation.
Conclusion:
Trump’s policies may drive economic shifts worldwide, affecting trade balances, sectoral growth, and international alliances.
