Trump's victory could help Indian startups, foster better collaboration, say Indian VCs

Trump victory could help Indian startups, foster better collaboration, say Indian VCs

The victory of Donald Trump in the US Presidential election could augur well for the Indian startup ecosystem, according to multiple venture capital investors.

Trump’s running mate and vice presidential candidate JD Vance is a former venture capital investor and has deep connections with Silicon Valley.

The Trump candidacy has divided the Valley into two camps, but the trifecta of a Republican presidency, Senate majority and probably house victory could bring corporate-friendly policies and tax cuts to big companies spurring a virtuous cycle for the tech ecosystem, Indian VCs said.

“I believe the new administration will be pro-business on taxes and regulations and this will be positive for the VC ecosystem in India as well. I foresee more collaboration between the two countries in technology which will be good for the startup ecosystem,” said Naganand Doraisamy of Ideaspring Capital.

Mohandas Pai, chairman of Aarin Capital, said that the victory looks good for the world with interest rates likely to come down and capital will start flowing across the global tech ecosystem.

Trump’s strident anti-China stance along with the courting of Elon Musk and other tech billionaires will bring in policies favouring the industry, VCs hope.

“Trump is anti-China, so there will be more tariffs and less FDI into China. This might help Indian startups, especially those in defence or manufacturing. Musk has been a big supporter and he is big on US building an AI advantage. US is going to go strong on AI. Indian founders who build on top of US AI will benefit,” said Prasanna Krishnamoorthy, managing partner of Upekkha, an AI fund and accelerator.

For several VCs, lifting of the uncertainty that has been hanging around in the ecosystem for the past two years in itself will help companies focus on business rather than externalities.

“I expect more interest in investing in India for sure. Consistency of our policies will be crucial for India to continue to attract American and other Western money,” said Sanjay Swamy, managing partner at Angel Prime.

However, Swamy cautions that there are two parts to this as Trump could make it more difficult to dump products in the US, a big focus area for him.

“The broader strategic focus is to not inadvertently invest in something that can be weaponised against the US - which is independent of who wins,” Swamy said.

For instance, if it is a University Endowment in the US, one would not want to find out later that the money ended up funding the development of something extraordinary in AI that helped Chinese companies defeat American companies - even if these are not Defence-related use cases.

"Since investments in China will go down, India could end up being the beneficiary. But I think people will only invest if they are convinced there is a similar opportunity,” Swamy said, indicating that quality of startups will matter the most as to how much India will benefit from Trump.