Trump's comeback: Govt in wait-and-watch to study regime change in US

The Trump-led regime's stance on India's laptop and IT hardware import policy is expected to remain the same, he said, adding that India should take action if it deems fit.

The government is closely monitoring the developments and trying to comprehend the impact of Donald Trump coming back to power as President of the United States (US).

 

NITI Aayog chief executive officer (CEO) BVR Subrahmanyam said policies and actions under Trump’s new regime are going to be “quite different” from his previous stint.

 

Besides businesses in India, the government is also trying to comprehend the impact.

 

Considering that the US is the world’s largest economy, and India’s biggest trade and export partner, everything that happens there has economic consequences for India, Subrahmanyam said at an industry event.

 

 

While votes across several states are still being counted and the transition to a new regime under Trump will take a few months, experts believe that his new policies may be more restrictive in nature.

 

Besides, his victory may have significant bearing on India's proposed regulations on e-commerce, cryptocurrency and import policy for laptops.

 

Ajay Srivastava, founder of think tank GTRI, said that during Trump’s previous stint (from 2017-2021), the US withdrew from most global agreements on trade, health, and climate change.

 

However, when Joe Biden took over in 2021, his administration not only continued with Trump’s policies, but also saw regulation with more restrictions on China. Also, there were more barriers to trade, and subsidies to boost domestic manufacturing through the inflation reduction act.

 

“We may see even more restrictive policies during 2.0,” he said.

 

India is attempting to reduce dependence on China and boost local manufacturing through a laptop and IT hardware import management policy. But the US has been pressuring India not to stop imports from China, despite its anti-China stance.

 

The Trump-led regime’s stance on India’s laptop and IT hardware import policy is expected to remain the same, Srivastava said. He added that India should go ahead and take action if it feels fit.

 

India is currently exploring tightening of import norms under the laptop import management system, in its attempt to reduce dependence on China. Companies will have to seek fresh approvals for imports, based on new guidelines, from January 1.

 

Similarly, there could be continued pressure on India to liberalise foreign direct investment (FDI) in multi-brand retail.

 

Pradeep S Mehta, secretary general, CUTS International, said that there will be continued pressure from the US to liberalise FDI in multi-brand retail due to pressure on the American government from e-commerce giants.

 

“India is unlikely to liberalise FDI in multi-brand retail. We are already familiar with the popularity and the impact of quick commerce,” Mehta said.

 

India has time and again conveyed its stance to the US regarding its reservations against the entry of multi-brand retail in the country. The Centre believes that such a move would destroy pop-and-mom or local kirana stores.

 

Biswajit Dhar, distinguished professor at the Council for Social Development, said the next steps towards the World Trade Organization (WTO) will also have to be closely watched. This is because Trump hasn't been particularly fond of the WTO.

 

Under the Trump administration, the US had blocked appointments of members in the appellate body — the highest dispute settlement authority at the WTO — which has now stopped functioning.   

What's at stake 

- Experts believe that Trump victory may have significant bearing on India’s regulations on e-com, cryptocurrency

- The Trump-led regime’s stance on India’s laptop and IT hardware import policy is expected to remain the same

- Companies will have to seek fresh approvals for imports, based on new guidelines from January 1, 2025

- There could be continued pressure on India to liberalise FDI in multi-brand retail