trumps influence on indian economy

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trumps influence on indian economy

Friday, 31 January 2025 | Kumardeep Banerjee

trumps influence on  indian economy

How India’s digital economy could be shaped by his policies

Donald Trump, the 45th President of the United States, has left an indelible mark on both American and global politics. While much of the discussion about his policies and influence has focused on traditional industries like trade, defence, and foreign relations, Trump’s impact could extend beyond these sectors — especially to economies like India. As the world’s largest democracy and one of the fastest-growing digital economies, India stands to experience both challenges and opportunities in the wake of Trump’s post-presidency actions and his political stances.Here’s a closer look at how Trump could shape India’s digital economy.

Trade Policies and Digital Tariffs - Trump’s “America First” policy introduced a more protectionist approach to trade, focusing on reducing imports and ensuring favourable terms for US companies. India has seen its digital space expand rapidly, particularly with global tech giants and startups. However, if Trump or his political allies push for new tariffs or restrictions on foreign tech investments — or increase scrutiny on digital platforms operating in India — it could complicate business relations. While this may benefit  India’s indigenous tech sector and could leverage such scenarios to strengthen local supply chains and reduce dependency on US companies, it will certainly be bad for US India’s bilateral trade. Geopolitical Tensions and Digital Sovereignty Another area where Trump’s impact could be felt is in the realm of digital sovereignty. Trump’s earlier administration frequently took stances against Chinese technology companies. India, too, has followed suit with actions against Chinese apps, and the digital sovereignty debate is likely to continue. Should Trump’s influence result in stronger US-India alliances in the digital space, it could accelerate India’s drive for data privacy regulations, local data storage mandates, and greater control over its digital infrastructure. The US and India will have the opportunity to collaborate on setting global standards for cybersecurity, data protection, and artificial intelligence.

If the relationship between the two countries remains strong, it could also lead to joint ventures that power India’s emerging tech ecosystem. US-India Strategic Digital Alliance -Under Trump, the US-India relationship generally saw an uptick in strategic collaboration, especially in defence, technology, and trade. Post-Trump, this alignment could be further amplified. As a leader in traditional and digital technologies, Trump’s legacy of prioritising high-tech industries in the US could create opportunities for Indian companies to collaborate with American firms in research and development.For India, this could mean access to cutting-edge technologies in fields like AI, 5G, quantum computing, and blockchain. Such collaboration could increase India’s digital infrastructure capabilities, making it more competitive in the global market. Promoting E-Commerce Growth -Trump’s policies favoured business growth, especially in the private sector.

His approach to deregulation, tax cuts, and incentivising entrepreneurship could be leveraged by Indian businesses, particularly in the e-commerce space. While Donald Trump’s influence on India’s digital economy is not straightforward, his policies, legacy and post-presidency actions could create ripple effects across global digital markets, including India. Whether it’s through tighter immigration restrictions, geopolitical positioning, or shifts in trade relationships, India’s digital economy must remain agile, harnessing both challenges and opportunities. India’s emerging tech scene is robust and well-positioned to adapt to global changes.

(The writer is a policy analyst; views are personal)

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