After endorsing President Donald Trump at a Texas event in 2019 and a Gujarat event earlier this year, Narendra Modi, prime minister of India, spoke with President-elect Joe Biden after his win on Saturday. Modi congratulated him for winning and hoped to work further with “India’s largest trading partner.” Analysts believe that Biden’s win has positive implications for India, such as the possible ending of tariffs and going back to the Generalized System of Preferences. Due to economic turmoil in the United States, a trade agreement with India is up in the air, whether it be bilateral or multilateral. Agricultural investment and digital trade are two major markets that India is looking to fulfill, especially with the amount of capital that the United States has.
As a superpower, the United States has the ability to severely impact the economy of countries by ending their trade agreements, or imposing heavy sanctions. Since the United States is going through an economic recession, the new Biden administration does not have as much leverage as the United States has had throughout their relations with India. This means India has a bit of an advantage in many industries of trade, specifically digital and agricultural. India holding out on the Regional Comprehensive Economic Partnership (RCEP) with China and many other countries in that region benefits the United States more than it does India.
India can be seen as a rising power as their agricultural and manufacturing industries have skyrocketed over the past few years. The United States, on the other hand, is already a global power, along with China. The RCEP could be a huge profit for India, both financially and politically. To maintain their elite position in global relations, the United States has to offer India an exclusive free trade agreement. This change in power dynamics is scary for the United States to see because it was hegemon for decades and now they are sharing power with China. It will be interesting to see the steps the new administration takes in order to continue the supreme status of the United States.