Trump 2.0: With the government in wait-and-see mode, strategies are in place for various scenarios.

With Donald Trump sworn in as the new US president, India is closely monitoring the impact of his policies on the domestic economy. A number of ministerial discussions have taken place and ministers have devised various strategies to mitigate any impact of his announcement. But now the government is waiting and waiting, sources pointed out.

Trump’s tariff policies are a key watch in India, and the Union Budget 2025-26 is looking under review to reduce customs duties on various goods, but this is expected to send a positive signal to the US on India. Tariff position.

On Day 1, Trump signed an executive order to investigate the causes of the U.S.’s trade deficit with foreign countries, including tariffs. It has announced that it will impose 25% tariffs on imports from Canada and Mexico effective February 1, but has yet to outline any further tariff action plans.

“On the first day of President Trump’s While they may create strategic and economic disruptions, they also provide an opportunity for India to review its energy policy, strengthen public health infrastructure and reduce dependencies in critical sectors,” said Ajay Srivastava, founder of the Global Trade Research Initiative (GITR). In the report, he said many executive orders on day one are just the beginning. “We need to be ready for surprises on tariffs and trade soon,” he said.

The threat of a global tariff war is growing as Trump is expected to raise tariffs on imports.

Macquarie global strategists Victor Shvets and Kyle Liu said they expect average U.S. tariffs to double from 5 percent to 10 percent under Trump 2.0. “Furthermore, we continue to believe that penalties on board tariffs are not even possible as a bargaining chip,” he said.

Nomura analysts believe China will impose the largest tariff hikes among America’s trading partners, including many consumer goods that were not targeted during Trump’s first term.

“We expect Trump to follow through on most of his campaign promises, but the proposals could soften tariffs on Canada and Mexico in particular. We expect Chinese tariffs to rise by a combined 35pp. Trump may also impose additional 10% tariffs on several other European and Asian countries and a 5% tariff on Mexico.” As a result, the effective rate of tariffs on products imported from the United States will increase to 10% They indicated in their report that they will wait.

Trump’s other executive orders, including a plan to end automatic citizenship for children born in the US to non-citizen parents, may have a direct impact on India but may face a legal challenge.

“President Donald Trump’s proposal to end automatic citizenship for children born in the US to non-citizen parents has raised concerns among Indian families. This policy will directly affect thousands of children of Indian parents who hold US green cards or serve as Indian diplomatic staff, potentially altering their long-term residency and citizenship trajectory,” the memo, reported by GTRI, said.

Meanwhile, the impact of Trump’s policy on inflation and the pipeline should also be considered. There are concerns that his policies could lead to inflation in the US leading to the Federal Reserve raising interest rates. This could have a negative impact on the global economy.