‘Trump’s policies may open up new opportunities in India’s defense sector’, reports Motilal Oswal
New Delhi|There is a big trade partnership between India and America. The important question is how sweet the economic partnership between the two countries will be after Donald Trump becomes President again. This is because America’s trade policy is the real test of relations between the two countries. Trump implements America First’s policy and for this he does not even compromise in friendship. However, a report claims that the America First trade policy will have far-reaching implications for global trade and geopolitics.
According to a report by Motilal Oswal, the policy has brought mixed results for exporters around the world as it is specifically designed to prioritise US manufacturing by reducing imports from China. For India, Trump’s policies present both opportunities and challenges. The Indo-Pacific defense strategy could strengthen US-India cooperation, opening doors for Indian businesses in sectors such as pharmaceuticals and defence.
It further said that Indian businesses may also get new opportunities in sectors like pharmaceuticals and defence. Especially if US-India cooperation is strengthened. Emerging markets face a mix of challenges and opportunities. Additionally, corporate tax cuts in the US could increase IT spending. This will benefit India’s IT sector. However, a strong dollar and possible tariffs on Indian exports could impact India’s trade balance.
Another important concern is the impact of increased tariffs on US exports. Major industries such as agriculture and technology risk losing competitiveness in global markets if trading partners impose counter-tariffs. The report said the duty increase could increase the possibility of retaliation from trade partners, affecting US exporters in sectors such as agriculture and technology.
It also said that India may see a ray of hope in global supply chain restructuring. Especially, in technology areas such as AI and semiconductors, which is inspired by the China+1 strategy. For example, the European Union (EU) could impose tariffs on US goods, to the detriment of the automotive and steel industry. These measures can not only slow growth in Europe, but also disrupt global trade patterns.
According to the report, emerging markets are facing a double challenge. While higher tariffs and a stronger dollar could increase export costs for sectors such as IT and pharmaceuticals, some countries, such as Mexico, would benefit from attracting manufacturing that might otherwise remain in China.
The report highlights that geopolitically, Trump’s approach is likely to increase tensions and reshape alliances with China.
