US President Donald Trump's midterm setback has raised questions about the future direction of his administration's domestic and foreign policies. What
could this setback mean for US-India relations, the global economy and India in particular? Times Now Digital spoke to Economist and Founder of Nikore Associates, Mitali Nikore to decode the possible implications for India and the world. Q. Mitali could Trump's midterm setback change the direction of US' policy towards India? A. This is a very interesting turn of events, first of all, we all expected, I think, when we were looking at the post-poll data, when we were looking at the numbers coming in across different states, that there would be some sort of a setback. But no one expected the Democrats to really get control of the Houses, of the Senate. I think this really changes the equation when it comes to Washington, because if before there were two or three different centers of power, be it the President's office and then the bureaucrats and then the House and the Senate, now the House and the Senate are belonging to a different party. So I think for different countries, there's a lot of effort now to understand what does this mean from a time where tariffs and illegal tariffs were being imposed to a time now where actually the Senate, before these elections, gave the President the authority to impose tariffs, especially to those who were doing business with Russia, to now when the US themselves are doing business with Russia. The Senate and the House are in the hands of the Democrats. So I think a lot of changes and a lot of uncertainty associated with this transition. We will only come to know maybe in the next six months where things are landing and where things stand. Q. We've seen global markets and investors really cheer this outcome, what explains this positive market reaction and could the optimism then be seen as far as India's stock markets are concerned as well? A. So I think, Sakshi, what is evident is for the last two years, what has been evident with the Trump Presidency is that there has been absolutely no following of the rule of law, no following of established trade principles, no following of established economic realities. So there's been a lot of partisanship. There's been a lot of allegations of corruption. There's been a lot of going backwards in terms of investment in renewable energy, for example, and looking at circular economic principles, looking at even the AI sector, which is really the growth engine for the US economy. Again, the development of AI and AI firms themselves asking for more regulation coming in from the government and the government not being ready with that kind of regulation that the AI companies were asking for. So I think a lot of these sectors, it's not only about having unfettered growth. I think these companies and these growth engines also require government guidance when it comes to certain rules of the game, which they expect the government to come in and set. And really now the US economy, and that's why we're seeing this heightened activity on the stock markets, the cheering on the stock markets around the world, because in the US itself, there is now a sense that some incredibly talented people would come in charge for economic policy, for setting the direction of trade policy. Secondly, for emerging markets, means that there's no favoritism. There's going to be treatment based on a rules-based order, whether it's on trade or on economic cooperation. I think that is what markets around the world are cheering.
