Trump’s America will be a challenge. It’s also an opportunity for growing economies like ours

Donald Trump and Narendra Modi | ANI

Unlike any other time in recent history, 2025 represents much suspense and hope for governments, economies and people around the world. 

The post-Covid years have been difficult for the world and the scars of the pandemic on global economies are yet to heal fully. The healing process was delayed because of the conflicts in Europe first, and then in the Middle East.

Many of the “big” economies, especially in Europe, have slipped into a kind of declining spiral—caused by Covid, and then exacerbated by the war in Europe, high energy prices, and immigration from the Middle East. These factors have converged into almost a perfect storm. Recent results from the previously unassailable German automotive industry— where every major auto company has shown deep declines—highlight how deeply disruptive technology and energy prices have been, wreaking havoc on these economies.

Call it fate or the good sense of voters in India, but from 2014 onwards, India embarked on a very different direction economically compared to the 10 years of profligacy that Manmohan Singh’s government had journeyed. The focus on the financial sector strengthening, in particular the public sector banks, meant that when Covid hit India and the world, the country had built up its strength from the weak days of 2014. God forbid, if we had stayed on the UPA course, a very different history would have been written about India today – rather than the one about the fifth largest economy now poised to become the third largest. 

But the scars remain—of not just the pandemic but more significantly the war in Europe and the 7 October terror attack by Hamas on Israel that plunged the stabilising Middle East into chaos and war yet again. And the list of collateral effects included supply chain disruption, increased risk in trade routes, and energy prices among others. The endless stream of illegal migrants to Europe and the US, attracted by liberal governments, loose borders, and the mindless woke idealogy-driven Left Liberals who have shrilly normalised this has caused havoc and more so in democracies. 

America in the new era

US President Joe Biden’s Administration was seamingly at sea through most of this time, sending a mixed bag of confusing messages to the world and these hot spot events. A country that, in the post-World War II era, represented most of what the world hoped and aspired for, seemed lead-footed and uninspiring at a time when the world needed decisive leadership. 

And during this period of economic weakness and conflict, a few countries have gained. Oil and energy-producing nations have accumulated an additional windfall exceeding $ 1 Trillion in just four to six months after the start of the Russia-Ukraine conflict. China, which dominates the electronics Global Value Chains (GVC), enjoyed the rapid growth of digital and electronics products as digitalisation expanded before the China Plus One started kicking in.

Certainly, as we look ahead to 2025, the event that could reset and redraw the world is US President-elect Donald Trump’s second term.  He was voted in with a mandate to deal with the global hot-button issues, he has promised no more war and conflict, peace in the Middle East and lower energy prices. A clear firm approach to dealing with illegal migration, rein in government spending (and so to taper down the printing of US dollars), addressing China, economic growth, and cementing US leadership in technology and innovation. 

Truth be told, we can expect Trump’s “America First” but in many ways, the issues that drive such policies could also spur global recovery. His presidency threatens to upend the global status quo. In the last few months, trade-ists and almost every government have looked at the arrival of the Trump Presidency with anticipation (not all good)

President Trump’s America will certainly be a challenge but it also presents opportunities to growing economies like ours. On 10 November, a few days after the Trump win, I was invited to a video conference chat with some of the big boys of US Tech – most of whom had become Trump supporters. It was a light-hearted celebratory chat but there was a new confidence in US tech and as one of the iconic tech names in the call told me, “If you think US is anytime going to give up leadership of tech, AI, semiconductor or anything anytime soon, perish the thought – because we are back. Bigger and more confidently.” I am one of those who have been predicting India’s rise and growth in tech and innovation – and so it was clear I was invited into the chat for that message to be heard. 

Third largest economy

Tech and innovation will also be a big part of India’s ambitions both to grow our economy as well as to create a globally competitive and efficient economy. Our own momentum of growth can increase in the coming year. With almost no election to slow down governance and investments, Budget 2025/26 can set off the next stage of growth for India’s economy. The start of our national mission is to transform India into a Viksit Bharat, with the first stop being the #3 global economy. That will be a subject of my next musing.

Buckle up – 2025 is going to be an interesting ride.

The author is a former Union minister and tech entrepreneur. Views are personal

(Edited by Ratan Priya)