The election of Donald Trump has sparked concerns in India and across the world that the President-elect’s America First policies will raise the heat for other countries and their companies.
Tighter regulation of Indian companies’ investments and hiring in the US, and stricter enforcement in cases of malpractices are likely, law firms said, as they suggest clients to include ‘Force Majeure’ and ‘Material Adverse Change (MAC)’ provisions to cover shifts in trade policies, tariffs, and sanctions. Force Majeure is a legal concept the absolves the parties from their obligations in case of events beyond their control.
“Trump’s increased focus on an ‘America First’ policy means inbound investments from India—and potentially from global investors—will become more complex. Heightened regulatory scrutiny will likely affect sensitive sectors like technology, critical minerals, and issues related to local job creation,” said Rishabh Shroff, partner (co-head, private client and head, international business development), Cyril Amarchand Mangaldas.
Trump was elected the 47th US President, defeating incumbent vice president Kamala Harris after the 5 November polls. This marks his second term after serving from 2017 to January 2021, a period marked by tariff wars, trade restrictions, and unpredictable foreign policy. Trump will officially take office on 20 January for a four-year term, alongside his vice president J.D. Vance.
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An MAC clause, typically used in mergers and acquisitions, permits a party to back out of a contract if significant change happens that substantially lowers the value of a company or negatively impacts the outcome of an agreement.
Russell A. Stamets, partner at New Delhi-based law firm Circle of Counsels, warns companies of stricter enforcement of US laws under the Trump administration. “I foresee greater extraterritorial enforcement, especially of the US Foreign Corrupt Practices Act (FCPA), which has been quiet in recent years. About half of those convicted under the FCPA are foreign nationals. If the US wants to find you, they will. Companies should prepare accordingly or face the consequences.”
The Foreign Corrupt Practices Act is a US law that prohibits American firms and individuals from paying bribes to foreign officials to further business deals.
There are other clauses that law firms are pitching to clients across sectors in their deals with US-based firms.
Shroff of Cyril Amarchand Mangaldas advises focusing on the ‘conditions precedent’ clause to ease extensive filings and pre-approvals that are time-consuming. A condition precedent in a commercial contract details an event which must take place before a contract, or a party’s obligation(s) under a contract come into force
Shiju P.V., senior partner at IndiaLawLLP, recommends including price adjustment clauses (escalator clauses) to adjust contract prices due to increased tariffs post-execution. This clause allows for an automatic increase in wages or prices if certain specified conditions change in the future.
Trump’s protectionist policies, marked by his Make America Great Again slogan, include higher tariffs—10% on all imports and up to 60% on Chinese-made products.
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The US was India’s top trading partner during the first half (H1) this year, with exports hitting $41.6 billion—a 10.5% rise year-on-year (y-o-y), according to a report by Global Trade Research Initiative (GTRI).
India and the US have comprehensive global strategic relationships, said S.P. Sharma, chief economist at PHDCCI. He said trade between the two nations had increased during Trump’s first term, and business sentiments are expected to be even higher in Trump 2.0.”Going ahead, we expect bilateral relations to expand further in Trump 2.0,” Sharma said.
Indian companies are actively investing in the US, with total investments reaching $80 billion to date and creating over 400,000 jobs, according to a Confederation of Indian Industry (CII) 2023 report. In 2023 alone, Indian companies made fresh foreign direct investment (FDI) of $4.7 billion, representing about 3% of the US’s total inward FDI.
Indian mergers and acquisitions (M&A) activity in the US has also been robust, marked by deals such as Cognizant’s $1.3 billion acquisition of Belcan, Bharat Forge’s purchase of AAM India Manufacturing for ₹544.5 crore, and Exicom’s $37 million acquisition of Tritium, a fast-charging tech firm.
However, law experts say M&A deals by Indian firms in the US will have to pass through stricter regulatory scrutiny under the new Trump administration.
Law firms from New Delhi to New York are speaking to investment banks and clients on M&A opportunities, Bharat Anand, senior partner, Khaitan & Co, said.
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Kunal Sharma, a partner at Singhania & Co., said, “The Trump administration’s protectionist policies and tariffs will make cross-border deals more challenging, especially for companies with supply chains impacted by US-China trade restrictions.” He added that the Committee on Foreign Investment in the United States (CFIUS) is likely to increase scrutiny in sensitive sectors such as technology and defence, while potential rollbacks on Biden-era antitrust policies could further complicate M&A activity.
Law firms are also tracking how the new government will change visa rules that will impact workforce movements. Indian companies conducting business in the US must implement legal safeguards to address immigration challenges affecting workforce mobility.
Yogesh Singh, partner and head of corporate practice, Trilegal, has advised its clients that they should include contingencies in employee agreements to address labour migration issues.
Lawyers also recommend that Indian firms ensure compliance with US immigration laws, maintaining meticulous documentation and records for all visa applications.
IT services companies move employees to markets where their clients are located on temporary work visas. In June 2020, during his previous term as US president, Trump had suspended the issuance of all H-1B work visas, including for Indians. The US typically offers 85,000 H-1B visas annually, with a large proportion going to Indian nationals.
Queries emailed to Tata Consultancy Services, Wipro, Infosys, Tech Mahindra and HCL Tech, which have large workforces in the US remained unanswered.
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The bigger demographic watching his moves will be Indian students, for whom US colleges have always been a top choice—more so now as Canada and Australia have clamped down on the number of international students. According to a Mint report in April, more than 260,000 Indian students went to the US in the 2022-2023 academic session, a 35% jump over the previous session.
Trilegal’s Singh said, “One short-term impact of such protectionist policies, border checks, and import controls could be rising prices for select commodities—costs companies may pass on to consumers. In the long term, key changes could emerge in tax regimes, enhanced labour management checks, corporate compliances, and USD-INR currency fluctuations.”
“The India-US relationship has progressively improved due to our shared values of democracy and free markets,” said Gopal Jain, managing partner, Gaja Capital. “India’s progress has received bipartisan support from the US political establishment. The strong chemistry between our respective leaders, Modi and Trump, will help in accelerating the progress that the two nations have made in multiple aspects of the relationship including and beyond trade, investments and global security,” Jain added.
