Trump vs Harris: Potential impacts of the next US President on the Indian economy

US election impact on Indian economy: As the 2024 U.S. presidential election approaches, global markets, including India, are closely monitoring the potential economic impacts of either a Donald Trump or Kamala Harris administration. With the U.S. as one of India’s largest trade partners, the economic policies each candidate endorses carry weight for India’s exports, technology sector, and more.

Economic impact of the US Presidential Election on India

The U.S., being the largest global economy and India’s second-biggest trade partner after China, has a significant influence on India’s economic environment. Here’s a look at how the policies of Trump and Harris could shape India’s economy if either wins the election.

How a Trump victory could affect India’s economy?

Donald Trump’s economic approach largely centers on protectionism. If he returns to office, he is likely to reimpose higher import duties, potentially straining India’s export sector. During Trump’s previous term (2017 to 2021), the compounded annual growth rate (CAGR) of Indo-U.S. trade was 7.5%, compared to 9.2% under Joe Biden, according to PL Capital. However, Trump’s strict stance on China could create new market opportunities for Indian businesses in sectors once dominated by Chinese exports.

Kamala Harris’s stance on H1B visas and Indian professionals

A Harris administration could mean a shift in U.S. immigration policy, specifically around H1B visas for skilled workers, benefiting India’s substantial pool of technology professionals. Unlike Trump, who has tightened H1B visa rules, Harris is expected to support more liberal policies, which would increase remittances from Indian professionals in the U.S.—a vital pillar for India’s economy.

Energy and oil prices

Trump’s support for expanded oil exploration could drive down global crude prices, providing relief to India, a major importer of oil. In contrast, Harris is likely to promote renewable energy initiatives, aligning with India’s own goals for sustainability and a shift toward cleaner energy.

Impact on India’s pharmaceutical sector

India’s pharmaceutical industry, known for its generic drug production, could see varied outcomes depending on who wins the election. Trump’s policies may create a favorable pricing environment for India’s generics. Harris, on the other hand, may push for Medicare expansion, which could also benefit Indian pharmaceutical companies by increasing access to affordable medications in the U.S.