Should India worry about Donald Trump’s tariff plans? Ruchir Sharma explains

Ace investor and author Ruchir Sharma warned that Donald Trump is likely to impose more aggressive tariffs in his second term.
“Firstly, as far as tariffs are concerned, he (Donald Trump) doesn’t even need the Congress for that. That’s an executive authority. Where he needs the Congress is for him to pass his tax cuts and more of the fiscal position,” Sharma told India Today TV in an interview.
“As far as tariffs are concerned, he is definitely going to do more than last time,” he warned.
Ruchir Sharma cautioned against overestimating the significance of Donald Trump and Prime Minister Narendra Modi’s relationship. While he said that India and the US share a strong strategic bond, he noted that it is important to understand that the “essence is transactional”.
“I think America has just become a much less dependable ally currently that tomorrow, if America sees in its interest to cut a deal with China, for whatever reason, they’re not going to think about ‘Oh, India is an ally’,” Sharma explained.
However, he warned that under the Trump administration, India needs to be “prepared for very transactional approaches, where he may sort of decide tomorrow if he has to strike a deal with some country, because it’s in that country’s interest in America’s interest”.
“I think those days are gone.”
He also noted that India remains largely a bystander in American politics. “Even the campaign, if you look at it, India was barely mentioned. A couple of times India was mentioned. It made headlines here. But if you really track it from an American perspective, it was barely mentioned,” he added.
Despite this, Sharma pointed out that India’s brand remains strong in America, particularly due to successful immigrants.
“The Indian brand today is very strong. It’s largely associated these very successful immigrants who have come even though India, I think, is the source of the second largest contingent of illegal immigrants even. But generally the Indian brand is strong. It’s you know, all these successful CEOs and all from India.”
Analysing the factors behind Donald Trump’s victory, Sharma highlighted deep economic discontent among Americans. He noted that 70% of Americans are dissatisfied with the nation’s current trajectory, with a majority expressing that capitalism and the existing economic framework no longer serve their interests.
“70% of people in America felt that the system needs to be torn down or something dramatic needs to be done. So this is a vote against the system. It’s a protest vote,” he explained.
“This is a vote against the system. It’s a protest vote. It’s an anti-incumbency wave that’s been stoked by this huge sense of dissatisfaction,” Sharma added.