The US 2024 Presidential Election and Potential Impact on India

Posted by Written by Op-ed by Melissa Cyrill Reading Time: 7 minutes

The 2024 US presidential election, featuring Vice President Kamala Harris and former President Donald Trump as the contesting Democrat Party and Republican Party candidates, respectively, is poised to impact India-US economy and trade relations, defense cooperation, strategic ties, and climate initiatives, depending on the outcome.

As the US enters the final stretch of its 2024 presidential election campaign, the world is paying close attention, with profound impact expected on global trade, diplomacy, and economic policies. India, a key ally of the US, stands at an interesting juncture as the two leading candidates—Vice President Kamala Harris, representing the Democratic Party after President Joe Biden’s decision to step down, and former President Donald Trump, the Republican nominee—present starkly different visions for America’s future. The election’s outcome will influence US-India relations in critical areas, such as trade, defense cooperation, immigration, and climate collaboration, making it essential for India to carefully navigate the changes that may arise.

India-US trade and investment: Contrasting approaches

Bilateral trade between India and the US remains a cornerstone of the economic relationship, with the two countries exchanging US$118.28 billion worth of goods and services in FY 2023-24. The US is a leading investor in India, particularly in sectors such as technology, infrastructure, renewable energy, and manufacturing. The post-election economic policies of the next US president will have a direct bearing on India’s exports, investment flows, and overall economic growth.

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Kamala Harris, if elected, is expected to carry forward many of the trade policies established under the Biden administration, which have emphasized economic resilience, domestic manufacturing, and reducing reliance on global supply chains. While these policies have contributed to the US’s economic recovery, they have posed challenges for countries like India that rely heavily on exports to the US. Harris, however, is known for her strong ties to India—her mother was Indian-born—and may seek to strengthen economic relations by finding a balance between supporting domestic industries and fostering global trade.

Harris’s administration would likely continue discussions within the US-India Trade Policy Forum, which has aimed to resolve trade disputes, increase market access, and foster deeper collaboration in emerging sectors like technology and clean energy. However, India could still face trade barriers if the Democratic administration continues prioritizing domestic manufacturing through acts like the Inflation Reduction Act, which provides subsidies to American manufacturers.

Donald Trump, on the other hand, has historically favored protectionist trade policies, focusing on America-first principles. During his first term, Trump imposed tariffs on various goods, including Indian exports, which led to trade tensions between the two nations.

In a speech delivered on October 10, 2024, the former US president announced plans to introduce a reciprocal tax against India if re-elected, criticizing the country for its high tariffs. Trump referred to India as the “biggest charger” of tariffs, alongside China and Brazil, and reiterated complaints from American businesses like Harley-Davidson, which struggled with India’s 150 percent tariffs. Despite acknowledging a positive relationship with India’s Prime Minister Narendra Modi, Trump argued that US trade policies have been too lenient, contributing to America being “over-exploited” by countries with higher tariffs.

India’s average tariff rates have increased, reaching 18.1 percent in 2022. The US is among India’s largest trade partners, with bilateral trade close to US$120 billion in FY24 (enjoying a trade surplus of US$36.74 billion). Indian policymakers defend their tariffs as necessary to protect and boost domestic manufacturing, drawing parallels to US policies like the Inflation Reduction Act and Chips Act. External Affairs Minister S. Jaishankar noted that globalization has led to job losses, linking this to growing dissatisfaction in many societies.

Trump’s remarks come amid broader global concerns over Chinese imports, especially in the clean energy and high-tech sectors, sparking protective measures in the US and Europe. Indian steelmakers have also raised concerns over surging Chinese steel imports, calling for anti-dumping duties.

If Trump returns to the White House, India might face renewed challenges in exporting products like textiles, pharmaceuticals, and agricultural goods to the US market, as he may revive his tariff-focused trade strategy.

On the other hand, Trump has been known to favor bilateral trade deals over multilateral agreements, and a second Trump administration might explore the possibility of negotiating a US-India trade agreement. This could open new opportunities for India to expand its exports, though such negotiations would likely be tough and require India to make concessions in key sectors.

Geopolitics and foreign policy: Strengthening strategic ties

In the geopolitical arena, both Harris and Trump are expected to maintain a strong focus on the Indo-Pacific region, where India plays a critical role as a counterbalance to China’s influence. The US-India strategic partnership, particularly within the framework of the Quad alliance (India, US, Japan, and Australia), is likely to remain robust under either administration, as both Democrats and Republicans view India as a key ally in countering China’s rise.

Kamala Harris, if elected, would continue the Biden administration’s commitment to the Quad and may seek to deepen defense cooperation with India. Under Biden, the US and India have expanded their joint military exercises, defense sales, and technology transfers, solidifying India’s role in the Indo-Pacific strategy. Harris is expected to maintain this trajectory, focusing on areas like cyber defense, artificial intelligence, and space collaboration via forums like the Indo-Pacific Economic Framework for Prosperity (IPEF) and Quad.

Given her personal connection to India, Harris may also push for more people-to-people ties and educational exchanges between the two countries, further strengthening diplomatic relations. Additionally, Harris’s administration is likely to emphasize democratic values and human rights in its foreign policy, which could align well with India’s position as a leading democracy in the region.

Donald Trump, in contrast, is known for his transactional approach to foreign policy, often prioritizing immediate US interests over long-term strategic alliances. While Trump’s first term saw a significant focus on China as a geopolitical rival, his approach to India was less consistent. A second Trump presidency could lead to a more unpredictable foreign policy, where defense and security cooperation with India may continue, but economic tensions could increase if Trump adopts a more confrontational and protectionist stance on trade.

However, Trump’s tough stance on China may benefit India’s strategic goals, as the US would likely ramp up its efforts to counter China’s influence in the Indo-Pacific. This could result in increased defense collaboration, including more defense sales and joint exercises. At the same time, Trump’s focus on a more aggressive foreign policy could also put pressure on India to align more closely with US positions on China, which might complicate India’s efforts to maintain its strategic autonomy.

Immigration and IT sector: Workforce mobility at stake

India’s IT industry, which earned more than US$194 billion in export revenue in FY 2022-23 and US$199 billion in FY24, relies heavily on access to the US market and the mobility of its workforce. The H-1B visa program, which allows skilled professionals to work in the US, is particularly important for Indian IT firms, as thousands of Indian workers are employed by American tech companies.

Kamala Harris, with her background as a California senator, is likely to support policies that make it easier for high-skilled immigrants to work in the US. Harris has long been a proponent of comprehensive immigration reform, which includes provisions to expand visa availability for skilled workers. This would be a positive development for India’s IT sector, as a Harris administration could offer greater stability and flexibility for Indian professionals seeking employment in the US. Additionally, Harris has voiced support for expanding STEM education and workforce development, which could benefit Indian tech companies working in collaboration with US firms.

Donald Trump, in contrast, has a history of taking a hardline approach to immigration. During his first term, Trump introduced restrictions on H-1B visas, making it more difficult for Indian IT professionals to work in the US. A second Trump administration could bring tighter controls on skilled immigration, including further cuts to H-1B visas, which would negatively impact Indian IT firms and reduce opportunities for Indian professionals to work in the US. This could force Indian companies to look for alternative markets or explore remote work options to maintain their competitive edge.

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Climate change and green energy: Collaboration opportunities

India’s renewable energy transition is well underway, with ambitious targets to expand solar, wind, and other green energy sources. The US has been a key partner in this effort, particularly under the Biden administration, which has made climate change a top priority. India has benefited from US technological and financial support in its renewable energy projects, and this collaboration is expected to continue depending on the election outcome.

Kamala Harris, if elected, is likely to prioritize climate action and continue the Biden administration’s policies on clean energy and sustainability. This could include further collaboration with India on green technologies, electric vehicles, and climate finance. Harris’s commitment to addressing global climate challenges would align with India’s goals of expanding its renewable energy capacity, and joint US-India initiatives in this area could gain momentum.

Donald Trump, however, has historically been skeptical of climate change initiatives and withdrew the US from the Paris Climate Agreement during his first term. A second Trump presidency might reduce US involvement in global climate efforts, which could hinder some of the progress made in US-India green energy cooperation. This could affect India’s access to US technology and funding in the clean energy sector, potentially slowing down its renewable energy expansion plans.

ALSO READ: India-U.S. Boost Clean Energy Ties: Collaboration on Hydrogen, Sustainable Aviation

Conclusion: Navigating an uncertain future

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As the 2024 US presidential election approaches, India faces a critical moment in its economic and strategic relationship with the United States. Whether it is navigating shifting trade policies, managing workforce mobility, or collaborating on climate initiatives, the next US president will play a crucial role in shaping India’s global outlook.

Kamala Harris, if elected, is expected to bring continuity in many areas of cooperation, with a focus on strengthening economic, defense, and climate ties with India. Her personal connection to India and her balanced approach to global trade could provide opportunities for deeper collaboration.

Donald Trump, if victorious, may introduce a more protectionist and transactional approach to US-India relations, particularly in trade and immigration. While defense cooperation could remain strong, Trump’s focus on domestic priorities may create new challenges for India in the economic and technological spheres.

For India, staying agile and proactive in its engagement with the next US administration will be essential to securing its long-term economic and strategic interests. The outcome of the 2024 election will shape the future of India-US relations in profound ways, making it imperative for Indian businesses and policymakers to closely monitor and adapt to the evolving geopolitical landscape.

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