Trade gains or headwinds? Experts divided on US election impact on India's economy

As the United States goes to the polls on November 5, economists believe the results could raise several issues for the Indian economy, from increased protectionist measures to impacts on domestic growth and employment, depending on who wins the race.

- RUCHIKA CHITRAVANSHI

India, at the same time, is hopeful of benefiting from the US's anti-China stance, which could boost its exports to the country regardless of the election outcome.

Experts feel India-US trade relations could face headwinds if the US turns to more protectionist policies to boost its manufacturing sector. Although India's domestic fundamentals are stable, economists said Donald Trump's victory could raise some concerns.

"Trump's preference for America and imposing taxes on imports can be an issue.

Secondly, his ability to put pressure on the Fed can be an issue and create distortions in the bond market. Third, his high deficit preference will be inflationary and can affect bond yields. Fourth, keeping the dollar strong is another aim which can put pressure on the rupee," said Madan Sabnavis, chief economist Bank of Baroda.

While a Democratic coming back to power would likely mean continuity, Trump as President could introduce tighter trade restrictions, including broader tariffs of 10-20 per cent on all imports, impacting India's price competitiveness in the US.