Indian Economy: A new study from EY the Indian government thinks that the country’s economy will pass Japan and Germany to become the world’s second-largest by 2038. Now is the time for this because former U.S. President Donald Trump is pushing his “America First” plan with tighter trade rules and higher tariffs. India’s economy is growing quickly, which is good for investors around the world, but could also be bad for Trump’s nationalist views.
Why Trump is worried about India’s growth
Trump’s economic plan depends on raising tariffs to protect U.S. businesses and make the country less dependent on imports. India’s fast economic growth, on the other hand, directly contradicts this approach:
Changes in global trade: India is becoming a strong option to China as a place to make things. Since more global companies may move their headquarters to India instead of the U.S., Trump’s plan to bring jobs back home may not work as well.
India is becoming a bigger part of the global tech economy, which is usually led by the U.S., thanks to its strong performance in IT, digital payments, and startups.
Population Advantage: India has a very young workforce compared to the U.S., which has an aging population. This gives India an advantage in businesses that need a lot of workers.
Investment Magnet: People from all over the world are putting a lot of money into Indian markets. India could take money away from U.S. businesses if it keeps getting foreign direct investment (FDI).
On the Way to the Top for India
India’s economy is currently the fifth biggest in the world. It is expected to move up to third place by 2030 and then to second place by 2038. Strong domestic spending is one of the main things that drives growth.
- Infrastructure projects run by the government.
- The digital change and the use of fintech.
- Growth in industry and green energy.
The Bigger Picture
Trump’s policies, which are based on tariffs, are meant to protect U.S. businesses, but India’s growth is a problem. If India becomes a global growth engine, Trump’s claim that the U.S. should be the only country in charge of world trade may lose some of its power. This means that India is not only a friend for Washington, but also an economic rival in the race for power around the world.
