Trump's Triumph: A Trump Card For Indian MSMEs ? Donald Trump's re-election may significantly impact India's micro, small, and medium enterprises (MSMEs). His stance on trade, energy, and reducing reliance on China presents opportunities and challenges.

The re-election of Donald Trump as the President of the United States is anticipated to impact the global economy in multiple ways, and for India's micro, small, and medium enterprises (MSMEs), the effects could be particularly significant. Trump's stance on trade, his pro-energy policies, and his commitment to reducing reliance on China present both opportunities and challenges for Indian businesses across various sectors. As Indian MSMEs are positioned at the forefront of this shift, the evolving dynamics in U.S.-India relations could unlock growth potential for these businesses, sparking new avenues for exports, technology adoption, and collaborative projects.

Under Trump's leadership, the U.S. energy sector is expected to experience a renewed emphasis on traditional fossil fuels. As Dr. Kapil Garg, managing director of Asian Energy Services Limited, notes, "The re-election of Donald Trump has uplifted market sentiments, and notwithstanding concerns over tariffs and trade, is expected to fuel a bullish outlook towards the energy industry." The continuation of favorable policies for fossil fuels, including hydrocarbons, is likely to lead to a boost in U.S. energy production, which could benefit India as an import-dependent nation.

For Indian MSMEs, which are affected by the volatility of global energy prices, this stability in commodity prices translates into lower input costs. Reduced energy prices could strengthen the profit margins of Indian businesses that rely on energy-intensive manufacturing processes, helping them remain competitive in both local and global markets. Dr. Garg further adds, "Trump's favourable policies towards the fossil fuel sector should lead to increased production of hydrocarbons in the U.S., delivering stable commodity-price windfalls for import-dependent India in the form of cheaper energy imports."

Trade Shifts and New Market Openings

Trump's known inclination to impose high tariffs on China could also provide Indian MSMEs with a unique opportunity to capture a portion of the U.S. market. His administration's strategy to de-risk supply chains by encouraging 'friend-shoring'—a concept that prioritizes allied nations as trade partners—could lead to enhanced demand for Indian goods.

As Chandrakant Patel, managing director of Ice Make Refrigeration Ltd, explains, "Donald Trump's return to the U.S. presidency could open new opportunities for Indian SMEs, which focus on specialized manufacturing and technology-driven solutions." Patel highlights that this policy could encourage U.S. companies to source components, machinery, and finished goods from India, allowing Indian MSMEs to take advantage of supply chain shifts. This trend aligns well with India's "China Plus One" strategy, creating fertile ground for Indian businesses across industries such as electronics, pharmaceuticals, chemicals, and manufacturing.

In addition to trade, Trump's policies may pave the way for increased U.S. investments in Indian infrastructure, potentially bringing growth for sectors closely linked to India's MSMEs. Kavita Shirvaikar, managing director of Patel Engineering Ltd, anticipates strengthened bilateral ties in infrastructure and beyond, which would offer growth potential across multiple industries.

"Trump's re-election as the U.S. President is poised to have significant implications for the Indian infrastructure industry, especially in terms of deepening bilateral trade ties and fostering investments. As we envision a future of greater collaboration, we eagerly anticipate the U.S. playing a pivotal role in global infrastructure financing, with an increase in private sector involvement in Indian projects, particularly in sectors like renewable energy, transportation, and smart cities," Shirvaikar remarks. For India's MSMEs, this could mean improved access to advanced technology, expanded export channels, and increased investment in domestic projects that would drive innovation and job creation across the sector.

The Trump administration's push to diversify supply chains away from China aligns with a growing emphasis within Indian policy circles on reducing dependence on China. The potential shift towards Indian MSMEs as suppliers for the U.S. market could open a new era of economic opportunity.

Dr. Sabine Kapasi, an advisor to the Global Strategy Team at the UN, underscores the strategic advantage for Indian MSMEs in this scenario. She said, "Donald Trump's administration's focus on diversifying supply chains away from China aligns with India's "China Plus One" strategy, potentially opening new avenues for Indian businesses in sectors like pharmaceuticals, textiles, and auto parts." Kapasi emphasizes that the alignment of Trump's trade priorities with India's strategy offers a rare advantage, potentially allowing Indian MSMEs to make significant inroads into the U.S. market while contributing to India's vision of becoming a global economic leader.

Challenges in Sustainability and Environmental Policies

While Trump's policies on trade and energy are expected to foster economic opportunities for Indian MSMEs, his stance on climate policy could present challenges. Trump has previously expressed skepticism toward policies aimed at combating climate change, which could impact the global transition to renewable energy—a sector where India has set ambitious goals.

However, Dr. Kapil Garg believes that these policies may have a limited effect on India's own green initiatives. "While there remain apprehensions over Trump's pullback on policies directed towards combating climate change, it is unlikely to negatively impact the Indian economy's drive to push green energy, driven by its increasing competitiveness vis-à-vis hydrocarbons, and the ambition to achieve energy independence from imported fossil fuels." Indian MSMEs in the green energy sector may remain largely unaffected as they continue to innovate and pursue cleaner energy sources under domestic policies and incentives.

As Indian MSMEs look to strengthen their position in global supply chains, this geopolitical shift could foster deeper collaboration between the U.S. and India, creating a solid foundation for economic development. Chandrakant Patel sums up this vision, highlighting the prospect of a mutually beneficial trade environment by stating, "For Indian SMEs, this could reduce barriers to entry into the U.S. market, making it easier to grow exports. Additionally, by investing in cutting-edge technologies and maintaining high-quality standards, Indian SMEs can align with the U.S. demand for reliable and efficient alternatives to Chinese products."

Ultimately, with Trump's policies favoring trade shifts and increased supply chain flexibility, Indian MSMEs stand to gain a stronger foothold in the U.S. market, furthering India's global economic ambitions and elevating its role in diversified and resilient supply networks worldwide.