As the US teeters on the brink of another consequential election, with Kamala Harris and Donald Trump vying for the White House, the implications for India are high. The path to victory is complicated, with swing states like Pennsylvania, North Carolina, and Michigan pivotal in determining the next President. These states have the power to sway the Electoral College, a system that uniquely defines American democracy and could once again reveal a divergence between popular and electoral votes. Whether Harris makes history or Trump stages a return, India’s strategic and economic interests are poised to be affected profoundly.
Under a Trump presidency, one would expect a continuation of “America First” policies that historically have included protectionist trade measures, increased tariffs, and a more restrictive approach to immigration. For India, this may spell a return to some challenges faced during Trump’s first term. Indian exports, particularly in high-margin sectors like textiles, IT, and pharmaceuticals, could face heightened barriers. Trump’s inclination to incentivise domestic manufacturing could mean additional tariffs on key Indian imports, directly impacting the 18-19 per cent of India’s total exports bound for the US market. This could affect Indian companies exporting electronic goods, mechanical machinery, and various other high-demand products, creating uncertainty over India’s continued access to the US market.
On the other hand, Trump’s policies might bring certain benefits to India, especially in the pharmaceuticals sector. A reduction in US regulations on generic drugs, an area where India excels, could mean expanded market penetration for Indian pharmaceutical firms. While tariffs may pose a trade barrier, a relaxation of the stringent US regulations on generic imports could open a valuable channel, potentially making Indian drugs more affordable and accessible in the US market. His relationship with Modi, built additionally and visibly on high-profile, symbolic events like the “Howdy, Modi!” rally and the Ahmedabad visit, also suggests that Trump would continue to view India favourably in geopolitical terms. This personal camaraderie of the leaders could reinforce bilateral defence ties, especially within the framework of the Quad alliance. Shared concerns about China’s regional ambitions could lead to greater joint military exercises, arms sales, and technology transfers to bolster India’s defence capabilities.
A Harris presidency, by contrast, would likely represent a continuation of the Biden administration’s more conventional, rules-based approach. While Harris has shown support for immigration reform, her administration would likely approach trade and foreign policy with a broader, multilateral lens. This continuity could ease concerns within the Indian IT and pharmaceutical industries, as policies on the H-1B visa and trade tariffs would likely remain relatively stable. Moreover, Harris’s inclination toward maintaining alliances may reinforce US-India relations, but her approach to immigration could see a more gradual, rather than aggressive, relaxation of restrictions.
For India, the economic implications of this election are deeply intertwined with US monetary policy, as the Federal Reserve’s upcoming decisions will set the tone for global markets. A Harris administration would likely align with the Fed’s cautious approach, favouring gradual interest rate adjustments in response to easing inflation, as evidenced by recent Fed cuts. A Trump presidency, however, might influence the Fed toward more aggressive measures in support of domestic growth, which could strengthen the dollar and tighten global liquidity—a mixed outcome for India’s trade and financial flows. In the longer term, the US dollar’s trend could dictate capital flows into emerging markets, including India, and a stronger dollar under Trump’s protectionist stance might pose additional challenges.
Swing states, particularly Pennsylvania, represent more than mere electoral weight. Their outcome has the power to shift the balance of the US-India relationship in concrete ways, from tariffs and trade policies to immigration and defence.
“If I lose - I will tell you what, it’s possible. Because they cheat. That’s the only way we are gonna lose, because they cheat” Trump declared at a rally in September, igniting fresh concerns over a potential legal challenge if the election outcome is unfavourable to him. His words raise questions about whether he intends to contest the election results in court, particularly in a tight race where margins in swing states could be razor-thin. This rhetoric echoes his post-2020 claims of election fraud, which culminated in numerous lawsuits and a significant controversy over the integrity of the US electoral process. If Trump were to lose narrowly and pursue legal action, it could plunge the election into a prolonged dispute, delaying the outcome and potentially stoking further partisan division in an already polarised America. The impact of such a challenge would reverberate globally, with key allies, including India, watching closely, as the stability of the US political landscape remains essential for global economic and geopolitical stability. The implications for India could be significant, ranging from the structure of its exports to the strategic calculus it must maintain in a region marked by growing Chinese influence. The stakes are high, and the outcome in these battlegrounds will shape not only America’s path but also the future of its relationship with India.
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