Will India triumph or be Trumped?
Subscribe to enjoy similar stories. If you are the CEO of a global multinational corporation or the chief investment officer of a large global pension fund or a sovereign wealth fund or an insurance company, or an asset manager with a high allocation to emerging markets, India should be the least of your concerns for now. Donald Trump has won and all the scenarios that your staff planned around his potential win will now start playing out in real time.
Trump’s ‘America First’ and ‘Make America Great Again’ rhetoric and soon-to-be-policies will impact countries and corporations who have: a) a commodity in which the US has/wants dominance (oil & gas—Middle East, Brazil, Indonesia); b) high technology at scale (chips, AI, new energy—Taiwan, South Korea, China, EU); c) a large goods trade surplus with US (China, Mexico, Eastern EU, ASEAN); and d) dependence on US foreign policy (Russia/Ukraine, Israel/ME, Taiwan). The Indian state, the country’s economy and most domestic corporations do not fall under any of these categories and, hence, are unlikely to be directly impacted by Trump’s policies. Overseas investments into India, be it foreign direct investment (FDI) or foreign portfolio investment (FPI), need not be upended just because of Trump’s ‘America First’ policies.
Depending on the extent of the Trump rhetoric being converted into policy, it could have some serious macro shocks on economies, business models and, hence, on investment flows into countries listed above. India, from this standpoint, is clearly a relative net beneficiary. That is not to say that the India markets will be immune from the global gyrations.
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