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Editorials/Opinions Analysis For UPSC 07 November 2024

  1. What Trump 2.0 means for India
  2. A win that will affect the global economy


Context:

A second Trump administration may reshape India-U.S. relations, offering both strategic opportunities and renewed challenges.

Relevance: GS 2 ( International Relations )

Practice Question: Analyse the possible opportunities and challenges for India-U.S. relations in the event of a second Trump regime. (150 words )

Positive Areas for India-U.S. Relations under Trump:

Economic co-operation :

  • Trump aims to strengthen trade with India, reviving Free Trade Agreement discussions from 2019-2020.
  • India could benefit from technology transfer, defence purchases, and greater access to U.S. markets.

Energy Collaborations:

  •  Trump likely favours increasing India’s purchase of U.S. oil and LNG, as seen in the past MoU for investment in the Driftwood LNG plant.

Democratic Norms:

  •  Unlike the Biden administration, Trump’s policies may reduce scrutiny on India’s human rights, minority issues, and NGO regulations.

On Khalistan Activism:

  • Expected a stricter approach towards Khalistani groups, promoting India’s stance.

Stronger Stance on Canada:

  •  Trump’s stance may align with India’s current tensions with Ottawa, particularly around the Nijjar case and related diplomatic disputes.

Potential Trouble Areas :

Trade Disputes:

  • Trump’s tariff policies led to U.S.-India trade frictions, including WTO disputes and the removal of India’s GSP ( The Generalized System of Preferences )status.

Unpredictable Communication:

  • Trump’s tendency to reveal or exaggerate private discussions with world leaders potentially complicate diplomatic relations.
  • For Instance, his comments on Kashmir with Pakistan’s Imran Khan and statements on the LAC standoff with China.

Pressure on Allies :

  • Trump can adopt a coercive approach to allies.
  • For example, his pressure on India to halt Iranian oil imports strained India-Iran relations, affecting India’s energy security.

Inconsistent South Asia Focus:

  • Pakistan and Bangladesh may experience policy shifts. Reduced U.S. aid and attention might increase these countries’ dependency on other powers, like China, shifting regional balances.

Complex Middle East Relations:

  • With Trump’s warm relations with Russia, India may find it easier to balance ties with Moscow.
  • Trump’s approach to Israel, Iran, and the Gulf countries may affect India’s trade, energy interests, and security.

Conclusion:

Trump 2.0 promises deeper economic and strategic ties, but India must cautiously navigate the complexities of his unpredictable approach to maintain a balanced and mutually beneficial partnership.



Context:

Trump’s victory may reshape the global economy, with significant implications for trade, inflation, and international relations.

Relevance: GS 2 ( International Relations )

Practice Question:Evaluate how a Trump-led U.S. administration’s protectionist policies might impact global trade and inflation, with a special focus on emerging economies like India. (250 words )

Trade Sector :

  • The USA may shift back to protectionist policies, particularly with China and India. This could involve raising tariffs on imported goods, particularly targeting China with tariffs as high as 60%.
  • The U.S. is India’s second-largest trading partner, with a trade surplus in India’s favour ($36.74 billion). Trump’s protectionist approach could involve tariffs or import restrictions on Indian goods.
  • Focus on Bilateral Deals: Trump’s preference for bilateral over multilateral trade could undermine global institutions like the WTO and may impact smaller economies.

Inflation :

  • Proposed import tariffs (e.g., 10% on all imports) could drive up consumer prices in the U.S., leading to increased inflation domestically and ripple through global supply chains.

China’s Concerns :

  • China as a Key Target: China’s substantial trade surplus with the U.S. ($380 billion) makes it a primary focus for Trump’s trade policies.
  • China may face significant trade barriers on certain products (e.g., electric vehicles in the EU and steel in India) limiting its reach.

Impact on India’s Key Sectors :

  • Trump’s policies could again limit H1B and L1 visa approvals for skilled Indian workers, particularly affecting the IT sector.
  • Indian companies might need to hire more U.S.-based workers, as seen with Infosys, which employed 10,000 American workers in response to prior restrictions.
  • Pharmaceuticals: Indian Pharma and generic drugs could face more stringent regulatory or tariff barriers.

Energy Sector

  • Increased Fossil Fuel Production: Trump’s pledges to expand oil and natural gas exploration which hampers U.S. commitment to climate goals.

NATO and Allies

  • Strained NATO Partnerships: During his first term, Trump’s often contentious approach toward NATO and European allies signalled a shift from U.S.-EU cooperation.

Conclusion:

Trump’s policies may drive economic shifts worldwide, affecting trade balances, sectoral growth, and international alliances.


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