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US Election: Kamala Harris is likely to maintain the Biden administration’s multilateral and alliance-driven approach, while Donald Trump’s policies could see a resurgence of aggressive trade tactics, according to analysts.
The US election result will have critical implication for the Indian economy. (Image: Reuters/AP Photo)
As US presidential candidates Democrat Kamala Harris and Republican Donald Trump are in a tied race, the result will have critical implications for the Indian economy as their policies differ widely. According to analysts, Kamala Harris is likely to maintain the Biden administration’s multilateral and alliance-driven approach, while Donald Trump’s policies could see a resurgence of aggressive trade tactics, including potential tariffs and stricter immigration policies.
According to brokerage firm PL Capital, the Trump government might be favourable for global geopolitics, crude oil prices, defence technology and pharma.
“The upcoming US presidential election could have critical implications for India against the backdrop of escalating geopolitical tensions, change in leadership in Bangladesh, and fragile situation in South East Asia. With India navigating tensions in South Asia and managing strategic shifts in the Indo-Pacific, the US stance becomes crucial to preserve political stability in South Asia,” said PL Capital in its latest ‘India Strategy’ report.
If elected, Kamala Harris is likely to maintain the Biden administration’s multilateral, alliance-driven approach, while Donald Trump’s policies could see a resurgence of aggressive trade tactics, including potential tariffs and stricter immigration policies. However, the return of Donald Trump as president of USA might put some cold water on rising tensions and wars in Russia-Ukraine and the Middle East, it added.
However, according to a note by DBS Bank chief economist Taimur Baig and its senior economist Nathan Chow, “The US, over the past eight years, have made a decisive switch from promoting free trade to resorting to increasingly protectionist policies. Tariffs against China in particular, and the rest of the world in general, would rise under Trump, but they won’t be reduced under Harris either.”
They also said Trump’s policies of tax cuts and tariffs would be more inflationary, but it is also not the case that Harris has major
anti-inflation plans in her arsenal.
Kamala Harris Vs Donald Trump, Here’s How They May Influence Indian Economy: (Source: PL Capital)
| Trade Policy | |
| Kamala Harris | Donald Trump |
| Emphasises multilateral trade agreements and regional collaborations (e.g., Indo-Pacific Economic Framework). | Strongly favours protectionism with a focus on renegotiating trade dealsand imposing heavy tariffs. |
| Renewal of Generalized System of Preferences (GSP) | The termination of GSP in 2019 alone affected US$6.3bn worth ofIndian exports that previously enjoyed duty-free status |
| Bilateral trade CAGR during Biden regime is 9.2% | Bilateral trade CAGR at 7.5% during Donald Trump’s term |
| Implications for India | |
| Stable and supportive of India’s trade interests, NO major change is likelyin current policy | Could cause disruptions in global trade, but might open upopportunities for India to replace Chinese imports in the US market |
| Immigration Policy | |
| Kamala Harris | Donald Trump |
| Favours expanding skilled worker visas, like H-1B – H-1B visa approvalrates under Biden peaked at 98% in FY21, the highest in over a decade. | Plans to tighten immigration rules reduce H-1B visas. Under Trump, thenumber of approvals fell in 2017/18 but recovered in 2019/20. |
| Implications for India | |
| Positive for Indian IT service and GCC exports | Stricter education based via norms likely, it might affect unskilledworkers, however, might not affect IT services and GCC exports. |
| Energy and Environment | |
| Kamala Harris | Donald Trump |
| Proposes a significant increase in renewable energy incentives (e.g., EVsubsidies, clean energy R&D) | Plans to prioritise traditional energy sources (oil, gas, coal), revokeenvironmental regulations, and expand drilling on federal lands |
| She is likely to continue big push for renewable energy for reducing fossilfuels. Could take forward US-India Climate and Clean Energy Agenda2030 Partnership (mobilized US$2bn in PPP clean energy finance tosupport India’s energy transition and renewable goals) | Trump favours expanding oil and gas drilling on federal lands, which hadled to an increase in US oil production by 36% between 2016 and 2019.Average crude prices during Trump’s regime (excluding covid year)were 25% lower than under Biden’s rule. |
| Implications for India | |
| Harris’ policies are likely to align more with India’s push for renewable energy and reducing dependency on fossil fuels. | Lower global prices of crude and Gas are positive for an import dependant country like India |
| Defence | |
| Kamala Harris | Donald Trump |
| Strong focus on strengthening Indo-Pacific partnerships to counterbalance China in South Asia through initiatives like INDUS-X | Credited with the decision to revive the Quad partnership in 2017 |
| Biden and Harris emphasized technology transfer, co-production andintegration of supply chains, and the co-production of GE engines forTejas Mark-2 fighters (though delivery has been severely delayed) | Increasing India’s capability through arms sales, rather than coproduction (Apache and Chinook attack helicopters), leading to 30%increase in India’s defense imports in FY17-FY20. |
| India’s Exports reached an all-time high of Rs 4,400 crore in FY24. | In FY20, India’s defence exports to the US stood at Rs 310 crore. |
| Implications for India | |
| Strategic realignment through the Initiative on Critical and EmergingTechnologies and G7, making India a cornerstone of the US strategy inthe Indo-Pacific | US stance to strengthen QUAD and empower India in SE Asia can resultin improved sourcing of hardware and technology for defence/ space |
| Healthcare & Pharmaceuticals | |
| Kamala Harris | Donald Trump |
| Proposes expanding Medicare and lowering drug prices by empoweringthe government to negotiate with pharmaceutical companies | Seeks to privatise Medicare, reduce government intervention in drugpricing, and deregulate health insurance markets. |
| Under Biden, Indian pharmaceutical exports to the US have increasedby a CAGR of nearly 7%, to $6.77 billion in FY23. | Under Trump, Indian pharmaceutical exports to the US have increasedby a CAGR of nearly 6.2% |
| Efforts to establish a mutual recognition of conformity assessments to eliminate duplicative testing, reducing compliance costs for trade in high-quality medical goods | Indian companies faced FDA issues between 2017 to 2019. Post India’skey role in supplying HCQ in the Covid pandemic, the situation changed forthe better. |
| Implications for India | |
| Favourable for Indian generics if Medicare expands coverage, andcontinued support for a stable regulatory environment | Could lead to improved pricing for Indian generic firms. Deregulationmay increase penetration of Indian generics into the US market. |
“Given that the election outcome will shape areas like defence, immigration and energy, it is crucial for India to assess and adapt to US policy shifts without viewing either outcome as categorically favourable or unfavourable,” said PL Capital in the report.
