Donald Trump Has Secured A Decisive Victory In The U.S. Presidential Election After Securing 277 Electoral College Votes, Defeating Democrat Kamala Harris. Prime Minister Narendra Modi Joined Other World Leaders In Congratulating Donald Trump On Becoming The 47th President Of The United States.
What Trumponomics Means For India
Why In News
- Donald Trump Has Secured A Decisive Victory In The U.S. Presidential Election After Securing 277 Electoral College Votes, Defeating Democrat Kamala Harris. Prime Minister Narendra Modi Joined Other World Leaders In Congratulating Donald Trump On Becoming The 47th President Of The United States.
India – US
- Donald Trump has a great rapport with Prime Minister Narendra Modi. During the run-up to the polls, Trump called PM Modi the “nicest human Being”.
- PM Modi and President Trump did take part in the joint events of Howdy Modi in Houston and Namaste Trump in Ahmedabad.
- Trump has been elected as President at a time when New Delhi desperately needed one who is a friend of India in the White House. Attacks on Hindus in Bangladesh or Canada are of paramount importance for Prime Minister Modi. With Donald Trump all set to become US president, Indian exporters may face high customs duties for goods like automobiles, textiles and pharmaceuticals if the new US administration decides to pursue the ‘America First’ agenda, opined trade experts.
- During his first term, Trump imposed stricter regulations on H-1B visas, leading to a significant rise in denial rates for both H-1B and L-1 visas. This had an impact on domestic IT service companies, which were especially reliant on these visas at the time.
- Trump Administration 2.0 might make the process more rigorous, possibly driving denial rates back up, which would make it harder for international students and high-skilled immigrants to secure or maintain employment. A possible dilution of the Federal Reserve’s rate-cut agenda in the light of a changed macroeconomic situation in the US would also impact the trajectory of India’s monetary policy — given that the RBI may first try to resolve the uncertainties before undertaking any significant rate-cut action.
- Bitcoin surged to a record high of more than $75,000, as crypto investors celebrated the return of Trump, who has earlier pledged to make the US “the bitcoin superpower of the world”.
- The possible induction of Elon Musk into the new administration could have repercussions for India. A proposal rushed through by New Delhi to accommodate Musk’s demand to import Tesla cars at a lower duty earlier this year was not quite accepted by the President elect’s billionaire supporter. There could be pressure now to sweeten the deal further.
- The lobbying for Musk in other areas such as satellite spectrum allocation or space launches could also get more vocal across key global markets, including India.
- In response to Trump’s victory, the Indian equity market has demonstrated a positive reaction, with both the NSE Nifty 50 and BSE Sensex indices experiencing gains of one percent.
- Foreign portfolio investors (FPIs) have once again shifted their stance in the Indian stock markets in October, transitioning from net buyers to net sellers. According to data from the National Securities Depository Limited, FPIs sold off stocks amounting to Rs 94,017 crore in October.
- This comes after four consecutive months of being net buyers, where they purchased stocks worth Rs 26,565 crore in June, Rs 32,365 crore in July, Rs 7,320 crore in August, and Rs 57,724 crore in September. During the Trump administration’s first term, India was subjected to US tariffs on steel and aluminium in 2018 and lost its preferential trade status under the Generalized System of Preferences (GSP), impacting approximately 12% of its exports.
- According to official data, India’s total exports to the US reached $54.7 billion by August 2024. The trade balance leans in favor of New Delhi, with imports totaling around $28.5 billion. This trade surplus could potentially make India a target of Trump’s proposed tariffs.
- “Under a Trump 2.0 presidency, we expect a preference to do business with India and a reversal of recent negative FPI flows, driven by supply chain realignments. With Trump’s presidency, India could see renewed Foreign Portfolio Investment (FPI) inflows as trade and economic alignment strengthen.
Trump’s History Of Restrictive Policies
- Increased scrutiny: There was a notable rise in visa denial rates and Requests for Evidence (RFEs) during Trump’s presidency which added complexity and delays to the application process.
- The denial rate for H-1B petitions for initial employment increased from 6% in FY 2015 to 24% in FY 2018 and 30% by FY 2020. The average denial rate for H-1B visas rose from approximately 3.2% under President Obama to around 18% under Trump.
- Higher wage requirements: The Trump administration proposed raising the minimum wage requirements for H-1B visa holders to align with that of standard US workers, which could impose financial burdens on foreign workers and make it more challenging for companies to hire them.
- Limits on visa numbers: There was speculation that Trump may reduce the annual cap on H-1B visas or prioritise applicants with advanced degrees or specialised skills, further restricting access for many skilled workers.
Plans For Further Restrictions
- In his 2024 campaign, Trump proposed additional measures to limit legal immigration. These include reducing the number of H-1B visas issued and implementing stricter eligibility criteria.
- Such policies aim to prioritise American workers but could impact industries reliant on foreign expertise, such as the tech sector, a significant beneficiary of the H-1B programme.
- Companies like Amazon and Google have historically relied on H-1B visas to fill specialised roles. Stricter visa policies could hinder their ability to recruit top talent, potentially affecting innovation and competitiveness.
- Reports suggest that the Trump administration may shorten the duration of H-1B visas, especially for workers placed at third-party client sites.
- This change could increase uncertainty for both employers and employees, leading to higher costs and administrative burdens.
- Impact On Indian Professionals : Given that a significant portion of H-1B visas are granted to Indian nationals, any tightening of these policies could have profound implications.
- Stricter regulations could limit job opportunities for Indian professionals in sectors like IT, where many companies depend on H-1B visas to bring in skilled talent.
- Trump’s anti-immigration stance may also affect family reunification processes for those already in the US on H-1B visas.
