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5 ways Donald Trump’s election could affect India
It came as a shock to the world – almost like Britain’s decision to exit the European Union. But Republican candidate Donald Trump would take over the Oval office after a thumping win. He won 288 electoral votes, much higher than the minimum 270 needed. This is quite a departure from the exit polls that indicated Hillary Clinton would win by a minor margin.
Most financial markets fell as reports emerged of Trump’s lead. The Sensex too fell over 1,500 points, wiping out investors’ wealth worth Rs 6 lakh crore. However, markets recovered towards the end once the election results became decisive.
Now, all thoughts are turned towards the implications of Donald Trump’s election win. We expect one problem and five benefits:
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Problems with outsourcing:
It’s not been a good year for Indian IT companies. Now there’s another bad news on the horizon—President-elect Donald Trump’s anti-offshoring policy. Trump’s 100-day agenda talks about ending the Offshoring Act. He also talks about levying a 35% tax on companies that shift their production outside the US. This affects the Indian IT companies directly. Visa rules could become tighter too, making it difficult for Indian IT companies to service their US clients. However, many experts foresee only a short-term effect. “Once he takes over the Oval office, the businessman in him shall surface,” Rituparna Chakraborty, co-founder and Senior Vice-president, TeamLease told the Press Trust of India (PTI).
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Pharma to benefit:
Trump’s 100-day plan also mentions reforming the US drug regulator, FDA. He talks about cutting the red tape to speed up approvals. This is good news for Indian pharma companies whose biggest market is the US. Plus, pharma companies were wary of Hillary Clinton, who had spoken against high drug prices. Many Democrats also proposed to set a cap on drug prices. This would have eaten into pharma company profits. With the Republicans in power, this issue is unlikely to crop up. This is one reason why shares of pharma companies rallied in an otherwise falling market on 9th November.
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US energy sector to open:
Trump also plans to remove limitations on the production of Shale Gas. This could affect the price of oil in international markets. If the US starts producing its own oil and natural gas, supply could increase in the market. This could lead to a fall in prices—a great news for an import-dependent country like India. Moreover, India could import directly from the US. This could reduce its dependence on oil from the OPEC nations in the middle-East.
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Better US-India relationship:
Trump, in the past, has spoken about maintaining a strong relationship with India to woo businessmen and students. Plus, he himself has business interests in India. This could mean a prospering relationship with India. Moreover, Trump indicated he wants to curtail trade with China and clamp down on Pakistan. This could help Indian businesses as well as its defense interests.
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Tax breaks for Americans:
In his campaign, Trump promised to change the tax system through simplification of rules, cuts in tax rates and other reforms. He also spoke about cutting the business tax rate to 15% from 35% earlier. This could mean good news for Indian businesses in the US.
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1,98,400
Yes, Donald Trump won the US Presidential election. This is because he got more electoral votes than the 270 needed. However, in terms of the total number of votes, Hillary Clinton had the upper hand. She got 59,626,052 votes—47.7% of the total votes. This is 1,98,400 more than Trump’s 59,427,652 (47.5% of the total votes). This makes Clinton the fifth candidate to lose the election despite winning the popular vote, as per an NPR report.
