With Donald Trump returning for a second term, India must capitalise on the strong rapport established during his first term to strengthen bilateral ties, while ensuring alignment with its national interests.
Core Challenges
- Radical Policy Framework: Trump’s transactional “quid pro quo” approach means that India will need to offer something of value in exchange for US support, rather than relying solely on the goodwill of shared interests.
- This could mean concessions that conflict with India’s strategic goals, posing a challenge to balance US demands without compromising core national interests.
- Strengthened US Position in Global Negotiations: With strengthening America’s position relative to Europe and China, the US may come to the negotiating table with greater leverage, putting additional pressure on India to accommodate US demands.
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Five Critical Themes for India in Donald Trump’s Second Term
- Regulatory Changes:
- During his campaign, Trump advocated for dismantling the regulatory state, criticising the heavy regulations across sectors like AI, crypto, etc.
- He aims to downsize bureaucracy, which has grown due to excessive regulation, to ease US capital investment and foster technological development. This has garnered support from Wall Street and Silicon Valley.
- Impact on India: India may need to ease tech regulations to stay competitive, fostering innovation, boosting the private sector, and enhancing collaboration with US tech giants.
- Re-industrialization Push:
- Trump aims to restore US manufacturing, reversing trends where US companies have outsourced production abroad.
- His preferred method involves tariffs (e.g., 10% on all imports, 60% on Chinese goods), as opposed to state subsidies like Biden’s.
- Impact on India: India may need to adjust its trade policies to navigate the changing US approach and mitigate the economic impact.
- Immigration Stance:
- Trump’s Position: Trump emphasises the need for “legal” immigration while restricting “illegal” immigration.
- He recognizes India’s contribution to US technological development and wants more Indian engineering talent to help maintain US leadership in technology.
- Impact on India: India should actively engage in US discussions on immigration, emphasising the importance of skilled migration while cooperating on the repatriation of unauthorised immigrants.
- Going beyond the H-1B visa, India might explore frameworks that enhance Indian professionals’ opportunities to contribute to and benefit from the US tech landscape.
- Geopolitical Dynamics:
- U.S. and the Quad: India will need to balance its strategic autonomy with US expectations in the Indo-Pacific, especially within the Quad.
- Trump may press India to make the Quad a security alliance to contain China. However, India seeks to avoid directly antagonising China, its neighbour.
- Managing US-Russia Relations: Trump’s potential rapprochement with Russia could ease pressures on India regarding its ties with Moscow.
- European Security: As Trump advocates that European countries should bear more of the defence burden, this could lead to European nations seeking to diversify security partnerships, creating opportunities for India to step up its role in European security.
- Sustaining Defense and Technological Cooperation
- India-US defence cooperation has expanded considerably, and Trump’s second term is likely to continue this trend but with a strong emphasis on reciprocity.
- Impact on India: India will need to carefully balance this partnership to ensure it aligns with US interests while still prioritising Indian defence goals.
Key Considerations for India’s Engagement with Donald Trump’s Second Term
- Past Experience Not Necessarily a Future Guide: While India and the US shared a productive rapport during Trump’s first term, India should not assume the dynamics will remain unchanged.
- Trump’s second term could present new challenges that require India to adapt its approach to ensure continued cooperation.
- Need for Comprehensive Policy Review: India must conduct a thorough review of its foreign policy and strategic priorities in light of Trump’s ambitious plans.
- Focus on Mutual Benefits Rather than One-Sided Favours: Trump’s transactional approach will require India to negotiate on a more equal footing.
- Potential for a Steep Diplomatic Learning Curve: India may face a learning curve as it navigates Trump’s unpredictable and often unconventional foreign policy style.
- Diplomats will need to be agile and proactive, with a strong focus on long-term strategic goals, while also adjusting to the immediate demands of Trump’s administration.
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Conclusion
India’s future engagement with Trump’s administration will require strategic foresight, adaptability, and a clear understanding of US expectations. Through proactive diplomacy, India can leverage its strengths to ensure a balanced and productive partnership with the US in the coming years.
November 8, 2024
