New Delhi, India — Donald Trump has repeatedly threatened massive tariffs on imports from various countries during his re-election campaign. Beijing caught his attention; He threatened 60 percent tariffs on Chinese products. But India was also a big target; He called the country the “major culprit” of the tariffs and promised to do the same in return.

Now, as Trump prepares to take office again after defeating Vice President Kamala Harris in the US presidential election, his plans for trade barriers and anti-immigrant rhetoric threaten to add tension to bilateral relations with India.

The US is India’s largest export destination and consistently ranks among its top two trading partners.

“India-US relations could get really tense if all these election promises made by Trump are fulfilled,” said Biswajit Dhar, a distinguished professor at the Council for Social Development, New Delhi. “If he continues with them, it will be very, very bad news for India.”

But there is a silver lining, according to Dhar: Prime Minister Narendra Modi’s personal “spirit” with Trump could help New Delhi navigate the bumpy road ahead.

trade tariffs

Last year, US-India trade reached nearly $120 billion; India’s surplus was $30 billion. Bilateral trade has increased by 92 percent in the last decade. Now, Trump’s “America First” agenda, which aims to offset domestic tax cuts by imposing higher tariffs on imports, could disrupt that relationship.

While higher tariffs would raise the cost of imported goods for U.S. customers, they could also hurt India’s key export-oriented sectors, from information technology and automobiles to pharmaceuticals.

Analysts at the London School of Economics predict a GDP loss of 0.03 percent for India and 0.68 percent for China. “India will take the biggest hit because the US is our biggest market. This is the source of our biggest concern,” said Dhar, an international trade expert. “Trump adopted a complete ‘protectionist attitude’ in his first term, but this time when he returns, he will know that he has received authority for these policies.”

Washington, D.C.-based CEO Michael Kugelman said trade tensions due to an imbalance in trade between the U.S. and India — with India being the dominant exporter — have remained largely under wraps for the past four years under the Biden administration. Wilson Center’s South Asia Institute. “But tensions may now surface and explode under the new Trump administration.”

Walter Ladwig, senior lecturer in international relations at King’s College London, acknowledged that “trade has always been a difficult issue in bilateral relations” and remained “front and centre” during Trump’s early years.

In contrast to Biden’s “crony-support approach” toward key high-tech products such as semiconductors, Ladwig said, “it’s hard to see Trump supporting efforts to produce such products anywhere outside the United States.” Friendly support refers to the concept of encouraging companies to move from rival countries such as China to friendly countries.

Trump’s anti-immigrant policy

Senior Indian diplomat Anil Trigunayat, who serves as India’s trade representative in New York, said India will face an unexpected reality as it tries to build strong ties with the new Trump administration: “America is trying to breed more isolationists and at the same time Delhi is trying to become more cooperative globally.” “It’s trying to grow in that way.”

Trump’s first shot at the US presidency has been marked by concerns from H-1B visa holders, a program for skilled foreign professionals seeking work in the country. Last year, 72.3 percent of these visa holders were Indians. Chinese workers rank second by far with 11.7 percent.

The denial rate for H-1B petitions rose from 6 percent in 2015 to 24 percent in 2018, a year after Trump took office, and rose to 30 percent in 2020 following the COVID-19 pandemic. Dhar said Trump’s tough talk on immigration could also strain relations. “When the issue of immigration becomes acute in political discourse, Indian workers will need to be prepared to make an immediate impact,” he said.

Still, it won’t be the same as Trump 2.0’s first term, Trigunayat said; This is partly because India now knows what to expect from him. “I don’t think the Indian foreign policy establishment is blinded by the fact that Trump also has his own priorities,” Trigunayat said. “We will continue to have some issues, particularly with access to the trade market, H-1B visas and immigration issues.”

Kindness and the China factor

But most experts believe the greater bilateral relationship between the United States and India will continue to grow, regardless of who is in power in Washington or New Delhi. “Modi has developed a personal relationship with Trump over the last decade… this is his style of diplomacy,” said Harsh Pant, vice president of research and foreign policy at the Observer Research Foundation (ORF), a New Delhi-based think tank. “With a person like Trump who trusts his personal instincts, this will benefit Modi.”

King’s College’s Ladwig agrees that a “good equation between Trump and Modi” should help bilateral relations.

According to Ladwig and Kugelman, India’s decline in democratic indexes and disturbing questions about the protection of minority rights will be “raised less frequently” by Washington under Trump.

Trump’s return to office could also ease pressure on India to move away from its historic friendship with Russia amid Moscow’s war against Ukraine.

India’s trade with Russia reached an all-time high of $65.6 billion this year; but the US has recently imposed sanctions on a number of Indian companies for their apparent aid in Russia’s war effort.

However, Trump has pressed for an end to the war in Ukraine and is known to prefer diplomacy over military conflict with Russia. “Some of the tensions that have plagued (US-India) relations in recent years will subside, and that includes the Russia factor,” Kugelman said.

Meanwhile, experts say common concerns about China’s increasingly assertive role in the Asia Pacific region will continue to play a unifying role between India and the US in the Trump era.

Trump and the ‘rogue state’

Bilateral relations stumbled last year over allegations by US prosecutors that Indian agents attempted to assassinate a US-based Sikh separatist. Although experts believe that Trump “will not make a major appeal to India”, there is a slim chance that his administration will give up on its claim that it targeted a citizen on US soil.

“Trump portrays himself as a nationalist, and given his politics, it seems likely that he will gain political mileage by publicly airing his concerns,” Kugelman said. “The biggest point of tension in the relationship was not Russia, China or trade, but the ‘murder for hire’ allegation.”

“This could be a rude awakening for India,” Kugelman added.

But ORF’s Pant said he believes “if India managed this crisis under the Biden administration, you will probably manage it much better under the Trump administration.”

Senior Indian diplomat Trigunayat said today “diplomacy is largely conducted at the highest level on an interpersonal basis.” “And Modi’s good relationship with Trump will be a good and rare access point in the White House.”