Short-term pain, long-term gain...

Experts rule out significant Impact on India due to Trump’s trade policies.
US President Donald Trump
US President Donald Trump
Updated on
2 min read

NEW DELHI: Hours after taking charge as US president, Donald Trump took a slew of major executive actions to effect major policy shifts, many of them with global ramifications whose ripple effects would be felt across the world including India.

The Indian equity markets felt the tremors on Tuesday with benchmark indices falling by 1.6%, while the rupee tanked 14 paise to close at 86.59 against dollar. However, most analysts and commentators expect limited economic impact on India as most decisions won’t impact India directly, though the uncertainties could shake a few indicators in the short term.

Soon after assuming office, Trump announced his America First Trade Policy and withdrawal from global tax deals. He also declared a national energy emergency.

Trump also hinted he would target countries with trade surplus with the US. India figures in this list but Soumya Kanti Ghosh, SBI’s group chief economic adviser, says the impact will be limited as India has broadened its export market.

Ajay Sahai, CEO, Federation of India Exports Organisation, believes India stands to gain. “These measures create opportunities for Indian exporters to fill supply chain gaps in textiles, pharma and engineering goods,” he said.

Trump also signalled potential sanctions on Russia and Iran, which could disrupt energy imports for India. But on the positive side, there is a possibility of more US energy coming to India, Union minister Hardeep Singh Puri said.

“India must prepare by diversifying energy supply sources to reduce its vulnerability to external shocks,” said Ajay Srivastava, founder, Global Trade Research Initiative.

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