US Elections 2024: Analysts Weigh In on How Trump's Victory Could Affect FPI Inflows to India

Donald Trump’s re-election has led to a 1% gain in India’s equity markets, as investors anticipate a shift in U.S. economic policies. Increased U.S. economic activity could benefit Indian exports, particularly in IT and pharmaceuticals. However, foreign portfolio investors (FPIs) turned from buyers to sellers in October, selling Rs 94,017 crore after months of buying. The upcoming Federal Reserve meeting on November 8 remains a key focus for market direction.

Sectors That Could Benefit from Trump’s Second Term :

Trump's re-election is likely to benefit several sectors, especially housing, energy, and IT. Increased consumer spending from tax cuts could boost Indian exports, while U.S. and Indian IT sectors may gain from higher investments, though offshoring could face challenges. A corporate tax cut could bring more business to Indian tech firms, which grew significantly during Trump’s first term. In healthcare, the Biosecure Act supports partnerships in affordable healthcare. Long-term impacts may include a shift from bonds to equities, rising gold prices, and potential INR appreciation.