Following Donald Trump’s historic win in the US presidential election, attention has turned to how his second term will shape US relations with India and other Asian nations. Moody’s ratings indicate that India could experience significant benefits from the shift in power, particularly given the growing tensions between the US and China and potential investment restrictions in strategic sectors.

Moody’s analysis suggests that these geopolitical changes may lead to a shift in trade and investment flows away from China, as the US increases scrutiny on critical industries. While China’s economy and regional growth could face setbacks, countries like India and other ASEAN nations are likely to seize new opportunities.

The ratings agency also predicts a major realignment in US policies under Trump, especially in fiscal, trade, climate, and immigration areas. This shift marks a stark departure from the policies of the Biden administration. Trump’s campaign emphasized making the 2017 Tax Cuts and Jobs Act permanent, reducing corporate taxes, and offering income tax cuts.

However, Moody’s warns that Trump’s protectionist trade policies could disrupt global supply chains, particularly in sectors such as manufacturing, technology, and retail, which depend heavily on imported materials and goods.

On climate change, Trump is expected to favor increased fossil fuel production through his “American energy dominance” strategy, potentially cutting funding for clean energy initiatives and risking a US exit from the Paris Agreement. This shift could undermine global efforts to curb greenhouse gas emissions.

Moody’s forecasts that Trump’s administration may roll back efforts to reach net-zero emissions by 2050 and loosen environmental regulations, particularly those targeting emissions in the power and automotive sectors.

In the election, Trump secured 312 electoral votes, well above the 270 required for victory, while Democratic Vice President Kamala Harris garnered 226.