The Impact of US Elections on India

The US election is significant for India not only from the economic point of view but also from the strategic point of view. There will however not be a major policy change caused by the victory of any one of the candidates.

As far as the Indian market is concerned, a victory for Donald Trump will not cause much change, but it may infuse some minor volatility, which will happen irrespective of the result. Donald Trump is perceived to be pro-market so things will surely be back to normal soon after the results. However, Joe Biden's victory may be a strong trigger for the market; it may cause an automatic reaction, especially post his comments on raising taxes. But in the long-term, the US elections are immaterial and markets will run their own course. Both candidates are expected to adopt a pro-India stance," said Amar Ambani, Senior President and Head of Research – Institutional Equities.

Arjun Mahajan, Head - Institutional Business at Reliance Securities, points out that traditionally, the Republican administration has been beneficial for India in terms of economic policy.

"The last Republican president George W Bush was instrumental in getting the Nuclear treaty done and cleared. Even Trump has been so far good for India. When China started its aggressions in the Ladakh sector, it was President Trump who sent a navy fleet in the South China sea to put pressure on China to back down," Mahajan stated.

A dilemma is now presented

There are 2 major things over which India will benefit individually, however, the policies of Trump and Biden differ on both resulting in India benefitting in either case but not benefitting fully in each of the 2 policies.

The Stance On China -Biden is said to be neutral about China whereas Trump is varying in China, So here Trump’s victory will be beneficial for India both strategically and economically. Trump’s stance on China could cause a paradigm shift for the ‘Make in India’ as well as lead to industrial prosperity. Peace would also be better maintained on the military fronts, at the sea, air, and borders alike.

The Immigration Policy -Biden’s policies on Immigration are much more favourable for Indians, whereas Trump’s are much more unstable. Trump's policy of America First has not been beneficial for Indian IT companies until before the pandemic. Trump has been changing the H-1B visa norms, which has been a cause of some concern. So in this case Biden’s victory will be beneficial for the 2,843,391 Indians living in the United States.

Conclusion

Whoever becomes president will have something good to offer, but there will be trade-offs in both cases. The Question “who will be more beneficial ” does not have a straight answer, and it belongs to the grey area. Only time will tell what effect the results will have on India and the World.