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Earlier this month, he singled out the BRICS nations,threatening them with 100% tariffsif they form a new currency or replace the US dollar with a different tender altogether.
India, a founding BRICS member, is powerful and central to the intergovernmental organization, that also features China and Russia among others. Like other countries, India has been targeted by Trump, who called New Delhi a “very big abuser” of the bilateral trading relationship during a campaign event in September.
Even during his first administration, Trump applied tariffs on steel and aluminum that set off a cascade of retaliatory moves. He eventually also stripped the country of preferential trade status, removing a designation that exempted billions of dollars’s worth of the country’s products from US tariffs and igniting anger among Indian officials.
But despite all that, the president-elect enjoys a warm personal relationship with Indian Prime Minister Narendra Modi. The two men praised each other enthusiastically four years ago, when the president visited Modi’s home state of Gujarat. Observers say that rapport is likely to serve India well during Trump’s second term.
Why is i Power Solutions India Limited (512405) rising ✌️【Professional Guidance】✌️ Precise predictions of market trends with real-time stock indices and futures data to help you make wise investment decisions. The other original BRICS members – Russia, China and Brazil – are known to be “anti-American in sentiment,” Harsh Pant, vice president of the Observer Research Foundation in the Indian capital, told 【 - Free Stock Market Real-Time Monitoring 】. “India remains one country which is not.”
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“Having Trump breathing down BRICS’ neck saying, ‘don’t go down that road,’ gives India more space to maneuver,” Pant added.
It allows India to say the group should tread carefully to avoid provoking a very reactive United States, Pant said.
India’s foreign minister Subrahmanyam Jaishankar said this month that India had no interest in weakening the US dollar.
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“His first term was quite positive, and the relationship that he ended up having with Modi also worked well for India, and therefore there is a sense that the second term might not be as disruptive,” Pant said.
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“The world views of Trump and Modi are much closer, they converge a lot more than the world views of Biden/Obama and Modi,” he said.
On Ukraine, he added, neither Trump nor Modi has criticized President Vladimir Putin for the invasion in 2022 and both have recently called for peace. Trump has said he would end the war in 24 hours, and Modi offered his help to broker peace when he visited Moscow in July.
Yet that is not likely to totally absolve India from the occasional turbulence associated with a Trump administration.
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India is becoming an increasingly important manufacturing hub for companies such as Apple, especially as it seeks to build its supply chains outside China.
In the first 10 months of this year, the US has imported $73 billion from India, compared with the $35 billion it has exported to the country.
Kugelman and Pant agree that the trade imbalance would create headaches for New Delhi, but not ones that are insurmountable. Instead, it might make discussions about deals or policy more transactional.
“This is just how Trump rolls, so even strategic partners like New Delhi will have to adjust to that,” said Kugelman.
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Pant points to a 2018 waiver given to New Delhi by Washington over the Chabahar Port in Iran. The exemption was needed following the reimposition of sanctions on Iran. The restrictions forced all US companies, foreign firms and countries from doing business with Iran.
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“If you are able to put your interests transparently, and if you’re able to do business with him, then you may not be as worse off,” Pant added.
India has demonstrated it is able to walk the fine line between staying on the good side of Trump while also pursuing its own interests. Time will tell if that can be replicated, but the view from New Delhi appears to be optimistic.
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