What Donald Trump 2.0 means for India and South Asia

Donald Trump’s re-election is expected to reinforce the momentum of strong India-US relations, maintaining continuity while also introducing evolving dynamics that India must navigate carefully to sustain beneficial bilateral ties.

Reasons for Optimism in India-US Relations

• Trade and Technology Cooperation:
  • Free Trade Agreement (FTA) negotiations in 2019-2020, stalled under Biden, will likely be revived.
  • Trump and the Republican Party have generally prioritised selling U.S. oil and natural gas over aggressive climate action and renewable energy policies. Thus, he is also expected to encourage India to buy U.S. oil and LNG, as seen in the 2019 Driftwood LNG deal, which was shelved later 
• Lack of Pressure on Internal Issues:
  • Unlike the Biden administration, Trump’s policies will likely avoid pushing India on democratic norms, minority rights, press freedoms, and human rights issues.
  • India will likely face fewer concerns over the Foreign (Contribution) Regulation Act, which restricts foreign funding for NGOs, or criticism over treatment of climate and human rights organisations.
• Khalistani Groups and Canada Relations:
  • India will likely see less pressure from the U.S. on its issues with Khalistani groups.
  • Given his frosty relations with Trump, it’s unlikely that Trump would involve the U.S. in India’s current diplomatic tensions with Canada, particularly over the Nijjar case.
• U.S. Support for India in the LAC Conflict: 
  • Trump supported India during the LAC conflict in a uniquely proactive manner, sharing U.S. intelligence, leasing drones, and supplying winter gear—an approach distinct from previous U.S. administrations.
  • This demonstrates a willingness to go beyond traditional diplomatic gestures, prioritising tangible assistance in times of need.

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Potential Trouble Areas in Donald Trump’s Second Term

• Trade Tariffs and GSP Status
  • Trump’s push for cutting trade tariffs could reignite trade disputes, as seen during his first term with the China tariff war. 
  • India faced counter-tariffs, the loss of Generalised System of Preferences (GSP) status, and complaints at the WTO. 
  • If Trump resumes similar trade policies, India’s exports may face fresh challenges.
• Trump’s Public Comments on Diplomacy
  • Trump’s tendency to disclose and sometimes distort private conversations with foreign leaders has caused diplomatic discomfort. 
  • Notably, his claims about India asking him to mediate on Kashmir were denied, and his mocking of PM Modi over trade issues like Harley Davidson tariffs, along with pressuring India on hydroxychloroquine exports, led to tensions.
• Tensions with Iran
  • Trump’s confrontational stance on Iran during his first term pressured India to cut oil imports from Iran. 
  • While future policies on Iran may shift, India could still face similar pressures, particularly if Trump seeks to re-engage with Russia, affecting its oil and energy strategies.
• Russia and Moscow Relations
  • India is likely to face minimal pressure from Trump regarding its relationship with Russia. 
  • Given Trump’s interest in engaging with President Vladimir Putin, India may benefit from a more flexible approach, especially concerning defence deals and strategic ties with Russia.

Implications for India’s Neighbours

• Impact on Pakistan:
  • Pakistan may experience loss of U.S. support under Trump, especially for loans from the IMF and World Bank. 
  • Trump’s previous decision to cancel U.S. aid to Pakistan in his first term could be repeated.
• Bangladesh and the Region:
  • Bangladesh could face scrutiny under Trump, especially regarding the protection of Hindu minorities, after Trump’s social media posts criticising Dhaka’s treatment of minorities.
  • South Asian nations like Nepal, Bhutan, and the Maldives that were courted by the Biden administration might be concerned about lack of attention from Trump’s administration.
• India’s Regional Relations:
  • India may seek Trump’s intervention in ending Israel’s war in Gaza and Lebanon and reviving talks with Gulf countries to aid the India Middle East Europe Economic Corridor, which has stalled.

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Conclusion

While India stands to gain strategically from Trump 2.0 , it should remain cautious of challenges as well.Proactive engagement and measured diplomacy will be essential to maximise benefits and manage any disruptions effectively.