Trump win may deliver better prospects for Indian manufacturers, exporters, say analysts
NEW DELHI : With decks cleared for Donald Trump to occupy the Oval Office for the second time, Indian companies in the manufacturing and exports segments are in the limelight even as there has been a broad rally in the stock market.
Market experts believe that Trump’s victory could translate into unleashing of a host of opportunities for Indian manufacturing and export companies, even though his policies have historically been focused on “America First” and reducing global trade imbalances.
Trump’s actions may create indirect benefits for Indian businesses, particularly those engaged in manufacturing and exports, they say while highlighting factors like enhanced tariff restrictions on China and global supply chain disruptions among other things.
When Trump became the US president for the first time in 2017, his administration levied multiple rounds of tariffs on products such as steel, aluminium, washing machines, solar panels, and various goods from China. These tariffs affected over $380 billion in trade and resulted in an approximate $80-billion hike in taxes.
His first stint and his trade war with China — while imposing tariffs on Chinese imports — caused disruptions in global supply chains, forcing many global companies to seek alternative suppliers and manufacturing bases outside of China, including India.
This is expected to boost demand for Indian goods as Trump’s stance is likely to remain tough on China, driving many multinationals to keep moving their manufacturing base from China to India. Specific export opportunities are also expected to emerge for Indian companies as US firms look to reduce their dependence on China.
Analysts expect that this would help Indian exporters in sectors such as automobiles, machinery, textiles, and chemicals who could capture a larger share of the US market. Further, stronger export competitiveness along with a stronger dollar could make Indian exports more competitive, especially in sectors like telecom, pharmaceuticals, and auto components, they add.
It is also expected that Trump’s tax reforms and pro-business policies may encourage US companies to invest in Indian manufacturing sectors, creating opportunities for joint ventures, technology transfers, and production facilities.