If Donald Trump returns as President in 2024, it could spell some major changes for India. Many expect a shift towards higher tariffs and tighter visa policies, which would impact trade and job opportunities for Indian professionals in the US. There could also be ripple effects in currency markets, potentially adding volatility to exchange rates. Trump’s fiscal policies may push up inflation in the US, which might prompt central banks worldwide, including in India, to re-evaluate their own policies.
What India Can Expect from Trump’s Policies
Trump’s economic strategy might include a broad 10% tariff on all imports into the US, and up to 60% on imports from China. He’s also likely to push immigration limits and reduce corporate tax rates for US-based manufacturers to 15%. With these changes, inflation could climb, forcing the US Federal Reserve to respond with interest rate adjustments that could also affect global markets, including India’s.
During his campaign, Trump labeled India an “abuser” of high tariffs, echoing his 2020 remarks calling India the “Tariff King.” Experts believe India may not escape increased tariffs if Trump wins. Products like Indian textiles, pharmaceuticals, and wines could face new tariff barriers, reducing their competitiveness in the US market and impacting revenue.
Trade Shifts: Opportunities and Challenges
The US is India’s biggest export partner, with exports hitting $77.5 billion in 2024 and total trade around $120 billion. While Trump’s anti-China stance may present some openings for India, his criticism of India’s tariffs means Indian exports could still face new challenges in the US market.
On the other hand, higher tariffs on Chinese goods could create opportunities for India. With more businesses looking to expand beyond China (a “China+1” strategy), India could step in to fill gaps, especially in sectors like semiconductors and electronics if the US pivots away from Chinese suppliers.
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Visa Policy Concerns for India’s IT Sector
Another area to watch is Trump’s approach to H-1B visas, which are crucial for India’s IT sector. If he implements stricter policies on outsourcing and H-1B visas, it could be a blow to Indian tech firms that depend heavily on the US market. Less outsourcing might impact revenue and make it harder to attract skilled talent.
How These Policies Could Affect Global Markets and the Indian Rupee
In the short term, Trump’s economic policies could boost the US economy. However, in the longer term, higher tariffs and immigration limits might increase inflation, slow consumer demand, and impact global trade flows. If other countries respond with tariffs of their own, we could see a slowdown in key economies like China and the Eurozone.
A stronger dollar could mean a weaker Indian rupee, which is already under pressure. Analysts predict the rupee might fall to around 84.20–84.50 within months and could break past 85 in 2025. As global markets react, India’s central bank may have to prioritize currency stability, potentially even before inflation control.
