Donald Trump’s victory in the US presidential election is a historic event that will largely determine the world’s future. We must consider what benefits India will get and which sectors of the economy we will have to pay more attention to. Here is a special report by swati Srivastava that seeks answers to such questions.
Experience has taught me a few things. First, follow your heart no matter how good something may sound. Second, it is better to stick to what you believe in and the truth is that sometimes you have to do something that you don’t want to do. –
Donald Trump
Table of Contents
Donald Trump’s presidency: According to Moody’s ratings, New Delhi stands to gain significantly from this shift of power.
Donald Trump’s Promised
Donald Trump’s economic promises – Increase in tariffs (additional duty on Chinese imports), lower taxes and stricter immigration rules.
If fulfilled
Donald Trump’s approach towards China can be an opportunity for Indian companies. IT, pharma and defense sectors will benefit.
Shadow of doubt
Indian investors should keep expectations in check. To reap full benefits, India needs to address the issue of low consumption and low household incomes on the domestic front.
Moody’s on climate change policies under Donald Trump
Regarding climate policy, a reversal is anticipated as Donald Trump’s advocates for increased fossil fuel production under the banner of “American energy dominance.”
“Indian IT companies are well placed to benefit from a potential surge in US IT spending. There is a positive trend in banking, financial services, and insurance spending in the US, which bodes well for Indian IT companies.
Although the proposed tighter immigration may impact Indian IT companies to some extent, most of them have reduced their dependence on visas, providing them with a great deal of protection.”
Donald Trump’s election to the US presidency has been called the greatest political comeback ever by some, while others have called it the world’s most extreme reality TV show. Donald Trump’s crushing victory in the US presidential elections has evoked a wide range of reactions, from joy to soul-crushing despair.
It is worth noting that Donald Trump’s victory led to a boom in the global financial market. Along with Wall Street and other major stock indices, bitcoin also recorded record highs. Trump’s victory also strengthened the US dollar.
However, the excitement cooled down a bit in the very next session of the stock market and the market started understanding what Trump 20 could mean for stocks, finance and the global economy. Volatility was also seen on Dalal Street. On November 6, the Nifty jumped 1.1 percent, but the gains stopped the next day.
In such a situation, is it a futile exercise to focus on the US election results from an Indian perspective? Is Trump’s slogan ‘Make America Great Again’ really a good idea for Indian domestic investors?
However, at first glance, the Indian IT sector stands to benefit not only from US economic growth and increased technology spending by US companies, but also from a stronger dollar. The US dollar hit a four-month high on November 6, weighing on most emerging market currencies, including the Indian rupee. The rupee hit an all-time low of 84.37 against the US dollar. Many analysts expect it to breach the 85 mark soon. The depreciation of the rupee against the dollar could create some headwinds for Indian IT companies.
With Donald Trump coming back to power, corporate tax rates are expected to be reduced. This will boost discretionary spending by enterprises, which will lead to more spending on IT projects. Let us remind you that during Trump’s first term, the Nifty IT index had increased by 150 percent. That is, yesterday, the IT index rose by 150 percent.
Indian IT companies are well placed to benefit from a potential surge in US IT spending. Recent second-quarter results also indicated a positive trend in banking, financial services, and insurance spending in the US, which bodes well for Indian IT companies. While the proposed stricter immigration norms may have some adverse impact on Indian IT companies, most of them have reduced their reliance on visas, which will protect them to a large extent from potential policy changes.
Not only this, Indian IT companies have increased the recruitment of local people in markets like America, Mexico and Canada. Also, they have started hiring people who are already in the US
The US share in exports is about 18 per cent. Indian exports include electronics, steel, precious stones, medicine, nuclear reactors, lithium products, iron and steel, autos and textiles. Keep in mind, reducing the price of drugs is part of Trump’s agenda, for which Indian pharmaceutical companies should be in the lead. If Indian
Exporters will benefit if they ensure the quality of their product is at an all-time high. On a broader level, US oil and gas
So if Donald Trump’s is to keep crude oil prices in check, then Trump’s vocal support for the Indian sector could lead to a significant increase in production, which could keep global crude oil prices in check. This bodes well for both Indian refiners and the country. India’s import dependence on crude oil is expected to rise to 87.7 percent in 2023-24.
Has reached an all-time high. Therefore, if Trump helps in keeping the prices of crude oil low globally, India will benefit greatly.
However, India has to remain strong on the domestic front. It is important to increase the income of the people and at the same time, increase consumption. This is India’s job; Trump or White House officials cannot help much in this.