In Short : Moody’s has expressed an optimistic outlook for India under Donald Trump’s presidency, predicting that India will benefit from his policies. The credit rating agency highlighted that Trump’s focus on economic growth, tax cuts, and deregulation could drive global growth, creating opportunities for India, particularly in trade, investment, and job creation. Moody’s emphasized that India’s strong economic fundamentals and growth prospects would align with Trump’s economic agenda, potentially boosting foreign investment and trade.
In Detail : India stands to gain significantly from the shift of power if President-elect Donald Trump makes the White House comeback after his historic win in the US presidential elections, according to a report by the global ratings agency Moody’s cited the news portal Hindustan Times on Sunday, November 10.
This move will come forth due to the rising tensions between the US and China and potential investment restrictions emerging in the critical sectors, as per the report.
“In the Asia-Pacific region, the world may witness a reallocation of trade and investment flows away from China due to heightened US scrutiny in strategic sectors. This shift will likely negatively impact China’s economy and dampen regional growth. Conversely, nations such as India and those in ASEAN could find new opportunities in this changing landscape,” said Moody’s, quoted by the news portal.
The ratings agency also expects a pivot in US policymaking under the Trump administration in the field of fiscal, trade, climate, and immigration issues.
The President-elect also indicated his intention to pursue tax reforms by making the Tax Cuts and Jobs Act, 2017 a permanent fixture, cutting corporate tax rates and providing income tax relief, during his election campaign.
These initiatives, along with higher taxes on Chinese imports, are expected to escalate federal deficits, creating a new dynamic in the economy, as per the report.
Moody also sees the potential of a protectionist trade policy under the Trump administration that can disrupt global supply chains and negatively impact sectors reliant on imported materials and goods, such as manufacturing, technology, and retail.
Climate change policies
A reversal is expected as Donald Trump advocates for increased fossil fuel production under the idea of “American energy dominance,” as per the news portal’s report. This can lead to a reduction in funds for clean energy initiatives and a potential withdrawal from the Paris Agreement, undermining the country’s commitments to reducing greenhouse gas emissions.
The Trump administration is expected to withdraw from the Paris Agreement again and reverse its commitments to meeting net-zero greenhouse gas emissions by 2050, as per the report.
“The shift would likely result in renewed support for the fossil fuel industry, reduced funding for clean energy and green technologies, and loosened environmental regulations, including the Environmental Protection Agency’s efforts to reduce emissions in the power and auto sectors,” reported the news portal quoting the report.
