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Kerala Kaumudi Online
Wednesday, 12 February 2025 1.42 PM IST

Trump 2.0: Implications for India and the World

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The inauguration of Donald John Trump as the 47th President of the United States heralds the dawn of "Trump 2.0," a presidency likely to bring both continuity and transformation in domestic and global policies. For countries like India, Trump’s second term offers a blend of opportunities and challenges that will shape bilateral ties and geopolitical dynamics.

A More Assertive American Foreign Policy

Trump’s return signals the resurgence of a more assertive U.S. foreign policy, heavily influenced by his "America First" doctrine. Central to this approach will be strategic partnerships with nations like India, especially in the context of an increasingly multipolar world. The geopolitical landscape is marked by rising tensions with China and Russia, compelling the Trump administration to strengthen alliances that serve American interests.

For India, this could translate into enhanced defense cooperation, greater technology exchange, and alignment in countering China's assertiveness in the Indo-Pacific region. However, the administration’s potential adoption of protectionist policies—including increased tariffs on imports—poses a challenge to the global trade order, with ripple effects likely to impact India’s export-driven industries.

Strengthening US-India Relations

India is well-positioned to deepen ties with the United States under Trump’s second term. The Quad, comprising the U.S., India, Japan, and Australia, may gain renewed momentum as a counterbalance to China’s growing influence. Defence agreements such as BECA (Basic Exchange and Cooperation Agreement) and expanding joint military exercises underscore the strategic importance of this relationship.

However, challenges remain. Trump’s emphasis on "fair trade" could strain economic relations, particularly if the administration imposes tariffs or seeks to renegotiate trade deals unfavourable to India. Policymakers in New Delhi will need to navigate these tensions carefully while leveraging areas of mutual interest, such as technology collaboration and energy security.

Immigration: A Double-Edged Sword

Trump’s immigration policies are poised to significantly impact India’s diaspora, particularly in the realms of legal immigration and undocumented residents. His administration’s historical tightening of H-1B and L-1 visa norms, coupled with stricter scrutiny under the "Buy American, Hire American" policy, could challenge Indian IT firms and professionals seeking opportunities in the U.S. For undocumented Indian immigrants, the specter of mass deportations looms large, with Trump’s plans to deploy the National Guard for enforcement adding to their insecurity.

Naturalisation policies may also see a shift, potentially affecting children of undocumented immigrants born in the U.S. Such measures could strain Indian-American communities, which have historically been significant contributors to sectors like technology and healthcare in the United States.

Geopolitical and Economic Challenges

Globally, Trump 2.0 is expected to bring heightened unpredictability. His unconventional leadership style and penchant for unilateralism could disrupt international agreements and alliances. For developing nations like India, the challenge lies in adapting to these shifts while safeguarding national interests.

Economically, Trump’s focus on reshoring American manufacturing and imposing tariffs may alter global supply chains. India, with its push for self-reliance under initiatives like “Make in India,” could emerge as an alternative hub for industries relocating from China. However, infrastructure deficits and bureaucratic hurdles may limit India’s ability to capitalise on these opportunities.

Challenges in AI and Emerging Technologies

One of the critical issues India is preparing to address with the Trump administration is the U.S. directive imposing a country-specific cap on AI compute and foundational models. Under this directive, India is limited to importing 50,000 GPUs annually, requiring a license even for this allocation. This restriction could hinder India’s ambitions for large-scale AI hardware deployment, as outlined under the India AI Mission.

The Ministry of Electronics and Information Technology (MeitY) has initiated discussions within the government, including the office of National Security Advisor (NSA) Ajit Doval. The issue will be raised under the India-US Initiative on Critical and Emerging Technologies (iCET) framework, launched by Prime Minister Narendra Modi and former President Joe Biden in 2022. With companies like Reliance Industries and data center providers such as Tata Communications and Yotta Data Services expanding their AI cloud capabilities, these restrictions could create compliance complexities and put Indian firms at a disadvantage compared to US. rivals.

While this cap is not an immediate crisis, long-term implications for India’s tech ecosystem necessitate strategic engagement with the Trump administration to mitigate its impact.

Opportunities in the Indo-Pacific

The Indo-Pacific region remains a critical arena for U.S.-India collaboration. As China’s maritime ambitions grow, Trump’s administration is likely to bolster initiatives that reinforce freedom of navigation and strengthen maritime security. India’s role as a regional power aligns with these objectives, offering scope for deeper cooperation.


Conclusion: Strategic Manoeuvring in a New Era

As Trump 2.0 unfolds, the extent of its impact will depend on how nations, particularly India, adapt to the evolving global dynamics. Strengthened bilateral ties in defence, technology, and the Indo-Pacific provide a robust foundation for collaboration. However, challenges in trade, immigration, and economic policies will require deft diplomacy and strategic foresight from Indian leaders.

Ultimately, Trump’s second term will test the resilience of global institutions and alliances. For India, it represents an opportunity to assert its position as a key player in shaping the new world order while navigating the complexities of Trump’s unpredictable yet impactful leadership. The coming years will reveal how effectively India and the world respond to the challenges and opportunities presented by Trump’s renewed presidency.

CA M R Ranjit Karthikeyan | ranjit@karthikeyan.ca

TAGS: TRUMP, IMPLICATIONS, INDIA, WORLD
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