Amidst Donald Trump's unconventional thinking, India will face the brunt of higher tariffs and immigration restrictions, but despite these challenges the country will be the beneficiary if higher tariffs are imposed on China says a report by Philip Capital. Trump's return as US President is likely to bring substantial changes, particularly in international trade, tariffs, and immigration policies.
A global shift in trade policies will hurt India but the "China+1" approach could lead to substantial benefits for India, assuming timely actions by the Indian government and corporate sector to fill the void left by China in various sectors.
The report suggests that these headwinds may ultimately position India positively in the medium to long term.
Trump, has shown an aggressive stance on imposing tariffs, particularly on Chinese imports, which could disrupt trade relations but it will present opportunities for India as a bigger trade partner. The report however noted that Trump's tough immigration policies could affect Indian IT firms, but with strategic local hiring and near-shore centers, Indian companies may adapt. The short-term demand for EV components from India could dip under Trump's administration, but hybrid vehicles might gain traction. Increased infrastructure spending could benefit companies involved in manufacturing truck components.
A Trump presidency would likely favour fossil fuels, which could lead to higher oil and gas production in the U.S. This would be beneficial for Indian oil refiners and gas utilities as energy prices will stabilize.
Trump's tough stance on China could accelerate US-India defence cooperation. Increased infrastructure spending and fossil fuel investment in the U.S. would boost demand for metals, benefitting Indian companies involved in mining and metals -- ANI