Note4Students
From UPSC perspective, the following things are important :
Mains level: Global Geopolitics; Regional Stability; Impact of USA election on Foreign Policy;
Why in the News?
New Delhi’s enthusiastic reception of Trump 2.0 will be moderated by apprehensions about his social media posts and harsh stance on trade and tariffs.
Trump 2.0 Impact on India-U.S. Trade Relations:
- Trade Negotiations and Free Trade Agreement (FTA): Trump is likely to pick up negotiations for an India-U.S. Free Trade Agreement (FTA), a process that began during his first term but was shelved after his loss in 2020. This could provide opportunities for greater market access and trade partnerships.
- Focus on Tariffs: Trump’s administration has been vocal about reducing trade tariffs. This could lead to pressure on India to lower its tariffs, as it did during Trump 1.0 when counter-tariffs were imposed, and India lost its Generalized System of Preferences (GSP) status.
- U.S. Military and Technology Access: India is likely to benefit from increased access to U.S. military hardware and technology. Trump’s administration has historically supported closer defense ties with India, which could be further solidified in his second term, benefiting India’s defense capabilities.
- Energy Deals and Trade: Trump could encourage India to increase purchases of U.S. oil and liquefied natural gas (LNG), as seen with previous deals like the Driftwood LNG plant. This could bolster trade, while also positioning the U.S. as a key energy partner for India.
Note: The Generalized System of Preferences (GSP) is a U.S. trade program that grants duty-free access to certain goods from developing countries to promote economic growth.
Implications for India’s Foreign Policy (Russia and Iran):
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Challenges from Trump’s Domestic Policies (Immigration and Technology Transfer):
- Immigration and H-1B Visa Policy: Trump’s tough stance on immigration and H-1B visas could pose challenges for India, especially in terms of its highly skilled workforce.
- India’s tech sector relies heavily on H-1B visas, and stricter immigration policies under Trump 2.0 could limit opportunities for Indian professionals to work in the U.S., affecting India’s IT and services sector.
- Technology Transfer: Trump has shown a preference for protectionist policies, which may slow down the transfer of advanced technologies to India.
- This could impact India’s aspirations to become a global hub for high-tech industries, particularly in sectors like artificial intelligence, cybersecurity, and defence technology.
- Increased Focus on U.S. Jobs: Trump’s focus on bringing jobs back to the U.S. may result in policies that prioritize domestic industries over foreign collaborations, limiting the scope for Indian companies in certain sectors and creating trade tensions.
Way forward:
- Strengthen Bilateral Trade Negotiations: India should actively engage in FTA negotiations with the U.S., seeking mutually beneficial terms that address tariff concerns, market access, and defense collaboration, while also ensuring safeguards for sensitive sectors like technology and agriculture.
- Diversify Technology and Energy Partnerships: India can focus on diversifying its sources of technology transfer and energy imports, strengthening ties with other global players in these sectors to mitigate potential risks from Trump’s protectionist policies and ensuring sustainable growth in high-tech industries and energy security.
Mains PYQ:
Q What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (UPSC IAS/2020)
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