Donald Trump seems closer to winning the 2024 U.S. presidential elections as he leads the Democratic Party’s Kamala Harris in the polls.

What Happened: Republicans have won the U.S. Senate majority and Trump is eyeing a political comeback four years after losing control over the White House to Joe Biden in 2020.

As Trump takes the lead, India stands to benefit from the cordial relations it has had with the Republican presidential candidate during his previous term. In 2020, Donald Trump made his maiden trip to India with his family when he visited Ahmedabad, Agra and New Delhi. During the trip, he had met with Prime Minister Narendra Modi, and the two leaders had vowed to boost trade ties between the countries.

Earlier this year, during a campaign event in September, Trump said he was poised to meet Indian Prime Minister Narendra Modi during his U.S. visit. However, a meeting between the politicians did not materialise.

Speaking at the event Trump also criticised India as a "very big abuser" of the U.S.-India trade relationship but also praised the Indian prime minister, calling him "fantastic".

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Although India and the US have enjoyed stable trade and bilateral relations over the years, speaking at a recent event in Canberra, India’s foreign affairs minister S Jaishankar remarked that the US is likely to become more isolationist regardless of who won the elections.

Market Performance: The final election results will provide a much-needed relief to the Indian markets which have been in a volatile mood ahead of the polls, Anitha Rangan, an economist at Equirus said.

Clarity on the results will bring the focus back to India’s fundamentals, which remain solid. The recent correction or adjustment caused by outflows over the past month is expected to reverse, predicts Rangan.

“On a medium to longer term, positive outcomes should emerge from the constructive relations India has with both USA and Donald Trump. Currency adjustments can well be managed with the reserves India has built,” she added.

Speaking about the global economy, Rangan said that the U.S. rate-cutting cycle may be slower than expected, which could further lead to a more gradual rate-reduction cycle in India.

Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services remarked that the buzz and actions surrounding the US elections will be short-lived, with economic fundamentals ultimately driving the market’s direction in the days that follow.

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