India's Strategic Rise in AI and Semiconductors Amid Shifts in US Trade Policy

A report by Motilal Oswal suggests India could enhance its global supply chain presence, particularly in AI and semiconductors, amidst potential changes in U.S. trade policies under Donald Trump. Although challenges may arise, India could strengthen its global position with strategic investments and collaborations.

India is on the cusp of expanding its role in global supply chains, particularly in sectors like artificial intelligence and semiconductors, as indicated by a Motilal Oswal report. This comes amidst potential shifts in U.S. trade policies, notably under a prospective second term for Donald Trump.

While Trump's policies, including stronger tariffs and a robust U.S. dollar, may pose challenges to Indian exports, they simultaneously present significant opportunities. According to the report, India's 'China+1' strategy and historical investments in strategic industries could enable it to play an increasingly pivotal role in reshaping global supply chains, especially in technology domains.

The report further asserts that technology sectors, including AI and semiconductors, are poised for growth as international players seek alternatives to China. Indian enterprises in pharmaceuticals and defense might also discover new growth opportunities, particularly if U.S.-India ties deepen in response to a more robust Indo-Pacific defense strategy. However, emerging markets could face hurdles due to heightened U.S. tariffs and a stronger dollar, affecting export costs in IT and pharmaceutical industries.

(With inputs from agencies.)