Cameron Gleeson, senior investment strategist at Betashares, noted that India has taken a unique approach to development compared to many of its neighbouring countries, which traditionally rely on export-oriented growth models.
Conversely, speaking on a webinar last week, Gleeson highlighted that India’s growth is largely driven by internal consumption, which could benefit the country if President-elect Trump follows through on his plan to raise tariffs, including a 60 per cent hike on Chinese imports.
“It’s a domestically orientated economy. Exports to GDP are sitting at roughly 20 per cent, but if you look at where those exports are, they are becoming an absolute world leader in services. Whether that be through outsourcing services, business processes, IT consulting,” Gleeson said.
“Where India is able to still exploit growth and demand for their services, and where they’re able to develop a bit of a cost advantage against China for low value manufacturing, India is perhaps the country that is quite well placed for foreign direct investment from both sides of the fence, as well as being able to still access markets for its exports.”
Similarly, last week, Amundi highlighted India as one of the two countries that are “most insulated” from the potential impact of President-elect Trump’s policies, with Indonesia being the other.
“India and Indonesia are positioned as long-term beneficiaries, while we expect continuous re-routing and policy support to stabilise the Chinese economy and mitigate the possible negative impact from tariffs,” the asset manager said in a new report.
Amundi’s outlook projects that resilient economic growth will continue in India, normalising to approximately 6.5 per cent in 2026, driven by a combination of domestic demand and investments.
Separately, Federated Hermes emphasised India’s strategic partnership with the US in the Indo-Pacific region as one that could counter China’s growing influence.
It is expected that under Trump, India and the US will continue to strengthen their defence ties and, given that India’s economy is “largely domestically driven”, the impacts from potential US tariffs is expected to be relatively “muted”, Federated Hermes said.
“Depending on Trump’s administration’s focus, there could be opportunities for increased economic collaboration in sectors like technology, pharmaceuticals and manufacturing. India’s response to the various developments would also play a crucial role in shaping the future of US-India relations,” the firm said.
UK set to benefit too
According to Gleeson, the UK could also stand to benefit from these shifts, potentially reaping the rewards of changing global trade dynamics.
“If you look at US’s measure, the US actually has a trade surplus with the UK, and if you look at the exports from the UK to the US, 70 per cent of them are services. So, financial services, travel, professional services, and the like,” Gleeson explained.
In contrast, the UK’s top import from the US is crude oil, he said.
“If we see Trump ‘drill, baby drill’, reducing the cost of energy for an energy importer is critical, so I think the UK – cheap valuations in the UK and less trade exposed than the EU – is relatively well-placed on the world stage,” Gleeson concluded.
