The US presidential elections to decide the race for the White House is easily the most significant political development for this year. But the US is also the biggest economy in the world that is a very close second largest trading partner country of India, with its trading value marginally behind that between India and China.
The economic policies of Democrat candidate Kamala Harris and that of Republic candidate Donald Trump are different on some aspects. The most important point is both candidates have serious economic implications for India. Let’s have a peek into the key points of both candidates which might have a bearing on India’s economy and, in turn, on you and me.
What Trump’s victory implies for Indian economy?
The most significant strand of Donald Trump’s policy is that of protectionism. His return to the White House is likely to witness policies that levy higher import duties that can hurt India’s export interests. PL Capital has mentioned in a report that the CAGR (compounded annual growth rate) of Indo-US trade during the Trump years from January 2017 to January 2021 was 7.5%. The rate raced to 9.2% during the tenure of Joe Biden.
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If Kamala Harris wins, there is likely to be a continuation of policy. If Trump wins, it remains to be seen what the details of his policy are going to be. However, if Trump gets tough with imports from China, India could benefit from it with Indian businesses trying to seize the initiative.
Kamala Harris favours H1B visas to skilled workers
Since a lot of Indian, especially technology professionals, migrate to the US, Trump’s policy of stricter H1B visas might not work to India’s advantage. India enjoys the highest remittances in the world, thanks to the huge pool of Indian professionals working in the US. Democrat Harris, however, is in favour of more H1B visas for skilled personnel.
Trump’s victory could mean lower global prices of crude oil since he wants increasing oil and gas exploration. While this is bound to favour an energy guzzling economy like India, Kamala Harris’s policy is likely to favour India’s aspiration to focus more on renewable energy.
Energy and pharma sectors
Trump’s victory could help India in the pharmaceutical sector with better prices for India’s generic drug firms. However, the analyst agency said that if Medicare coverage is expanded by Kamala Harris (in the event she wins), it could also favour the interest of Indian generic drug manufacturers. PL Capital mentioned in the report that energy, defence and immigration could be the sectors where Indian interests could be influenced the most in the US presidential election.
