Will Donald Trump’s exit bring more investments into India? Here’s how ‘Make in India’ may catch pace

The imminent exit of the US President Donald Trump may bring more investments into India while some of the policies initiated by Trump, particularly relating to climate change, are also likely to be reversed. These policy reversals are expected to augur well for India’s burgeoning alternate energy sector, with renewed vigor in the US ecosystem to seek and fund growth opportunities internationally, Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique investment bank firm, told Financial Express Online. Since India would be well-positioned for the increasing usage of green energy, the country could gain significantly from this shift, Utkarsh Sinha added. 

Trump’s exit may bring more investments into India

Trump’s exit is also believed to increase the fund outflow from the US as there is a perceived notion that the Biden administration will be less right-leaning and business-friendly. This will create opportunities both for FDI and FII outflows, and given the global conditions, India is well-positioned to make the most of it. “Particularly as it would take a while for relationships with China to normalize, and given the soft-connects that both Biden and Harris have with India, it would not be surprising to see even administration driven efforts to channel some of those investments towards India,” Utkarsh Sinha underlined. 

Sword over big-tech giant?

However, if the tax net is expanded, and big-technology companies, in particular, have additional taxation to worry about, it could slow the pace of capital spending and M&A. Biden also proposes raising the share of taxes from foreign income, which would impact the India operations of tech majors, Utkarsh Sinha added. Raise in the minimum wage is also likely to impact the cost of manufacturing in the US, which again, given the China freeze, could benefit India disproportionately. However, it remains to be seen if the Indian administration is agile enough to capitalize on such an opportunity to drive capital investments in high tech manufacturing and deep-tech innovation towards India, he further said.

Meanwhile, given the investment growth in recent years, Indian companies are optimistic about the new President-elect. “India Inc is optimistic to witness revitalized economic growth post-global pandemic crisis with an enhanced collaboration and bilateral trade ties, renewed economic stability and further strengthening of our shared democratic interest, investment growth trajectory and social, economic and cultural ties,” Niranjan Hiranandani, President, Assocham and NAREDCO, told Financial Express Online.