U.S. elections influence the level of foreign institutional investment in India. A shift in U.S. policies around interest rates, taxation, and trade can make Indian equities either more or less attractive to American investors.
If the U.S. government or Federal Reserve opts for expansionary policies, such as lower interest rates, it could lead to a weaker dollar. This environment encourages FIIs to invest in emerging markets like India.
A stronger dollar (likely with conservative fiscal policies) could lead to a weaker rupee, impacting India’s imports and inflation. Conversely, if the dollar weakens due to an increase in U.S. spending, it could benefit the rupee.
India’s trade with the U.S. is significant, especially in technology and pharmaceuticals. Policy changes, tariffs, or stricter immigration laws from a new U.S. government could affect India’s export sectors,
The Indian IT sector heavily depends on U.S. clients, with a large share of revenue coming from American companies. Changes in U.S. visa policies and corporate tax rates affect outsourcing and the demand for Indian tech services
The U.S. is a major market for Indian pharmaceuticals, with Indian companies supplying a substantial portion of generic drugs. A U.S. administration with a focus on reducing healthcare costs may favor Indian generics
With a focus on green energy and reduced carbon emissions, U.S. policy could boost sectors like renewable energy in India, where companies supply components or work in allied services.