Trump's victory gives Modi a chance to improve India's image in the West

Modi becameone of the firstTop leaders congratulated Trump on his historic victory in Tuesday's election, posting his message alongside photos of the two men holding hands during a meeting.rallyof thousands of supporters in Houston five years ago. He quickly followed up with a phone call.

Trump's return gives Modi a chance to boost India's image with the United States and its allies, who have recently increased scrutiny of the country's close ties to Russia's Vladimir Putin and its role in the violence against Sikh activists in the United States and Canada. Last year, Canadian Prime Minister Justin Trudeau alleged that Indian government agents were involved in the assassination of dissidents living abroad, and cases are currently pending in U.S. and Canadian courts.

Officials in New Delhi, who asked to remain anonymous, expect the new Trump administration to be less strict in demanding accountability from the Indian government for its alleged involvement in extrajudicial killings in Canada and the United States. The Biden administration had pushed India to investigate. and prosecute those allegedly involved. India has officially denied orchestrating any assassination.

Analysts and officials believe the United States under Trump will continue its years-long effort to make India a strategic partner in the face of a more assertive Beijing, an effort that has seen India win big.new investmentsAmerican companies like Apple Inc.

Trump will continue to see China as the biggest geopolitical challenge, and in that equation, India's long-term value as a strategic partner of the United States will be unquestioned, said Irfan Nooruddin, professor of Indian politics at the Georgetown University. Although military cooperation will continue with Trump, the real question is whether the good relations will benefit India's overall economy and trade.

Trade wars

Officials in New Delhi warn that while overall relations may improve, India could experience new trade problems under Trump and a reduction in cooperation in once-key areas like technology sharing and defense. Trump described Modi as the the kindest human being while quickly criticizing India for being the the biggest charger prices.

The United States is now India's largest trading partner, with bilateral trade of $119.7 billion in the last fiscal year, an increase of more than a third in five years. The US trade deficit with India has continued to widen over the years as imports from China have been diverted. Trump plans to impose 20% tariffs on all countries, and a 60% duty on goods from China could cost India 0.1% of its gross domestic product by 2028, according to Bloomberg Economics estimates.

A disproportionate U.S. tariff on Chinese goods could help increase trade with countries like India, but it could also have negative spillover effects. Officials in New Delhi said they would closely monitor whether China starts selling cheap goods to India. If this happens, authorities have not ruled out imposing higher tariffs on Chinese products in response.

New Delhi's other concern concerns cooperation in the areas of defense and critical technologies. The two countries agreed in August to advance co-production projects on a range of high-tech equipment, including jet engines, unmanned platforms, munitions and ground mobility systems. The two sides are also working on a cooperation initiative around critical and emerging technologies announced by Modi and Biden last year.

Both efforts could face new challenges given Trump's protectionist tendencies.

President Trump may not be as open to sharing technology or letting jobs move from the United States to India, said Meera Shankar, a former Indian envoy to the United States.

Russian ties

Trump's return allows India to continue balancing its close ties with Russia, which supplies India with cheap oil and military equipment, while keeping relations with the United States on track. Modi is under pressure from Ukraine and the United States over his ties to Putin.

India would find it easier to manage its long-standing relationship with Russia if President Trump negotiated a settlement ending the war in Ukraine, Shankar said.

Certainly, ties between India and the United States have strengthened under both Republican and Democratic administrations, and Indian diplomats believe that Trump's hawkish stance on China will ensure continued engagement with the 'India.

He was once president. We all know what policies he advocates, India's Chief Economic Advisor V Anantha Nageswaran.saidCNBC TV18. I don't see any major discontinuity or dislocation from the Indian perspective.

Trump has not always been easy for India to deal with during his first term. In 2019, hepulledDesignation of India as a developing country, a status that had allowed the South Asian country to export thousands of products duty-free to the United States. India retaliated by imposing higher tariffs on several products from the United States.

In a second term, he could push for tax breaks and lower import duties for U.S. companies like Tesla Inc. and Harley Davidson Inc., Indian officials said. He has previously cited India's high import duties as a barrier to Harley Davidson's expansion.

Another worry for India: Trump is pushing for stricter immigration limits. Indians are the largest recipients of H-1B visas to the United States, largely issued to tech workers. Trump imposed limits on H-1B visas during his first term and is expected to largely tighten immigration to the United States during his second.

There are two issues in particular that I think he's going to focus on that could make life difficult for Indians, said Milan Vaishnav, director of the South Asia program at the Carnegie Endowment for International Peace. The first concerns the whole question of trade, customs tariffs and access to markets. And the second is immigration.