As India braces for Trump in 2017, some signals to watch out for

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26 Aug, 2025 12:21

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Moneycontrol BureauTrump watchers are still scratching their heads trying to guess what the President-elect’s policies will look like. His hardline stance on protectionism, anti-immigration, threats to tear up trade pacts and repeal Obamacare has unnerved trade partners. India being a strategic partner of the US has much to fret about. Here are a few signals –and not all of them negatives -- that India will be eyeing when Trump becomes the 45th President of the Free World.

Tightening of H1-B Visas

In campaign rallies earlier on, Donald Trump called for scrapping of all H1-B visas. He might have softened his stance on immigration, but given his unpredictable nature, Indian IT companies are anxious.

Contracts from US-based firms account for about 60 percent of the Indian IT industry’s USD 100 billion plus of annual revenues. Should the US rewrite its work visa rules and force local companies to cut back on outsourcing, Indian IT could be hit hard.

A NASSCOM report estimates that these reforms, if implemented could cost Indian IT companies a whopping USD 400 million a year. The software industry body has already revised growth for the sector downwards to 8-10 percent in FY17.

Possible Loss of Jobs

If Trump delivers on his plans to reduce corporate taxes to 15 percent from 35 percent, it will make the US a more lucrative place to do business in. American companies operating in India will have a sound economic logic to shift jobs back to US shores. Auto companies like Ford India, whose tax payout in India is on par with what it shells out in the US, could head back home where a business-friendly tax regime awaits them. It could mean loss of thousands of jobs in India.

Pharma Exports may Stutter

Under Obamacare, which the outgoing US president had signed into law in 2010, Indian generic companies gained from exporting generics. In the last six years, the legislation allowed biosimilars to be imported into the US and Indian pharma majors exported USD 66 billion worth of drugs. Trump is no friend of this programme and if he scraps it, Indian pharma, a few of whom are reeling under USFDA observations, could face hardship.

Indian Entrepreneurs to Thrive

Trump’s ‘Penny Plan’ or ‘One Cent’ solution aims to cut federal spending by 1 percent every year. As part of the programme, he envisages relaxing rules for private businesses which could open up opportunities for Indian companies to pitch camp there. As part of Trump’s agenda, a green card will be assured to any Indian entrepreneur who invests USD 1 million and creates at least 10 jobs for American workers. Though it is a backdoor entry to an American citizenship, Indian entrepreneurs with deep pockets will jump at the chance to apply for the EB-5 visa – a programme which is used to stimulate job creation and encourage capital investment by foreign investors.

Oil may Get Cheaper 

One of Trump’s controversial proposals includes increasing natural gas and oil reserves in the US. Clear beneficiaries of this move could be countries like India which are dependent on OPEC-determined prices for oil. If US releases more oil, it could reduce prices globally, and India would have an easier time financing its oil imports.