Trump’s Policies Impact India’s Economy and Workers

Source: The post Trump’s Policies Impact India’s Economy and Workers has been created, based on the article “A note for New Delhi on dealing with ‘Trumperica’” published in “The Hindu” on 1st February 2025

UPSC Syllabus Topic: GS Paper2- International Relations-Effect of policies and politics of developed and developing countries on India’s interests,

Context: The article discusses the impact of Donald Trump’s policies on India. It covers immigration crackdowns, trade tariffs, and AI developments. It highlights risks for Indian workers, businesses, and diplomacy. India must adjust policies to handle these economic and geopolitical changes effectively.

For detailed information on Trump’s Re-election and India US Relations read this article here

How Will Trump’s Immigration Policies Affect India?

1. Strict Immigration Rules: Trump has ordered border security, visa restrictions, and mass deportations.
2. High Number of Undocumented Indians: 7.25 lakh undocumented Indians live in the U.S.; 18,000 face deportation.
3. Loss of Remittances: Deportation will reduce remittances and increase unemployment in India.
4. Trade Penalties Risk: Trump forced Colombia to accept deportees by threatening 25% tariffs; India could face similar pressure.
5. H-1B Visa Restrictions: Trump removed spousal work rights and opposed birthright citizenship, affecting skilled Indian workers.

How Will Trump’s Trade Policies Impact India?

1. Trump’s “America First Trade Policy” prioritizes U.S. industries.
2. India lost its Generalized System of Preferences (GSP) benefits under Trump’s first term.
3. The U.S. forced India to stop oil imports from Iran and Venezuela.
4. Trump’s 10% tariff on China may shift global trade dynamics.
5. U.S. withdrawal from global agreements may reduce economic cooperation with India.

What Is Trump’s Strategy Toward China?

1. Trump proposed a lower tariff of 10% on China, which is significantly less than his previous threat of 60%.
2. He invited China’s President Xi Jinping to the U.S. inauguration, signaling a possible shift towards more favorable relations.
3. The softer approach contradicts his previous harsh stance on China, including reversing the TikTok ban.
4. His approach hints at a revival of the U.S.-China “G-2” concept, which would impact India’s position in U.S.-China tensions, previously beneficial for India’s economic strategy.

How Will Trump’s AI Policies Impact Indian Workers?

1. Trump launched a $500 billion AI project to boost U.S. technology.
2. Impact on Indian workers:

• Reduced demand for migrant tech workers due to increasing automation.
• Potential job losses for mid-level engineers as AI takes over coding and other tasks.
• Example: Google CEO Sundar Pichai said AI generates 25% of new code.

3. India’s IT sector (40% of exports) depends on U.S. demand for skilled workers.

What Should India Do?

1. India must prepare for reduced migration opportunities and job losses.
2. Trade policies must adapt to potential U.S. tariffs and changing global partnerships.
3. The government should focus on skilling workers for AI and automation.
4. India needs to reassess its foreign policy to protect economic interests in “Trumperica.”

Question for practice:

Examine how Donald Trump’s immigration and trade policies affect India.