With the much anticipated US elections set to begin, the battle between Donald Trump (the Republican candidate) and Kamala Harris (the Democratic candidate) promises to be full of politics, drama and news!
Usually, the conversations around any country’s national election often reflect the socioeconomic situation there. And nothing brings the state of American society to the fore like the US presidential election. For this reason, I have always been an avid follower of this quadrennial event. And each time, it has been fascinating — Bill Clinton’s charm, the lawsuit in the Bush-Gore fight, Barack Obama’s oratory prowess (and use of social media), the weirdness of the Hillary-Trump battle — each could spawn books and movies, and they have.
This time is no different. So many things stand out — one party’s nominee hasn’t fought a primary before being nominated. In contrast, the other party’s candidate has faced a primary battle and unprecedented legal challenges, adding a new layer of drama to the race.
In this blog, I’ll discuss a few aspects of the US elections that I find interesting –
- How the USA elects its President: Electoral College
- Factors driving the voter sentiment
- Understanding the electorate
- The real impact of the US elections on India
Let’s dive in.
How the USA elects its President
In the US, voters do not directly elect the president or vice president. When they cast their ballots, they’re voting for a group of electors or delegates (be it Democrats or Republicans) called the ‘Electoral College.’
The Electoral College represents the voters’ interests and consists of 538 electors – 100 senators who form the Senate and 438 representatives who form the House of Representatives. The number of representatives from each state is based on the population of that respective state. For example, Texas and California are the most populous states and, therefore, have more representatives.
Upon formation, the Electoral College casts its direct vote for the President. The candidate with the maximum votes from a state wins all the electoral votes of that respective state. 270 or more electoral votes are required for a candidate to be elected President. This year, the Electoral College will vote on December 17.
This indirect voting system means the winning President might not always secure the majority of the national vote (also called the ‘popular vote’) but can still win by securing the majority vote of the Electoral College. Notably, this occurred in both the 2000 and 2016 elections, where George W. Bush and Donald Trump won through clear Electoral College victories despite not receiving the most votes nationwide.
In 2020, while President Joe Biden won the popular vote by over 7 million, his Electoral College win reached less than 50,000 votes across a few closely contested states.
Americans are increasingly leaning towards the popular vote system, with 63% of US voters preferring that the winning Presidential candidate be the one with the maximum national votes.
Factors driving voter sentiment
Let’s look at some data –
- U.S. inflation, which peaked at 9.1% in June 2022—the highest in over four decades—has eased to around 2.4% in September 2024, but concerns about affordability remain deeply entrenched among voters.
- Unemployment in the USA has slightly dropped over the last 2 months, with the number of jobs being greater than the number of job seekers. However, the number of resignations fell to its lowest in four years, indicating that Americans are growing less confident in the job market.
- The real GDP growth (which tracks the inflation-adjusted total value of all goods and services produced in the USA) has defied recession predictions, creating a complex economic narrative. The real GDP grew by 2.8% in 2024’s second quarter compared to a year ago. That is much better than earlier estimates of 2.1% and comfortably beats the 1.4% economic expansion of Q1.
Now, this is where it gets interesting.
In elections, perception often matters more than reality: if citizens feel they are worse off, they are more likely to vote for change, regardless of what data suggests..
Understanding the electorate
The electorate is divided not just by party lines but also by age, race, and gender. These divisions offer insights into shifting voter sentiment across demographic groups:
- Generational divide: Younger voters aged 18 to 24 overwhelmingly align with Democratic ideals—66% identify as Democrat or Democrat-leaning. Voters over 80 tend to favour Republican candidates – 58% of the cluster. Unsurprisingly, a key storyline in the 2024 election has been Trump’s efforts to connect with younger voters, especially young men—a demographic where he hopes to gain ground.
Some emerging trends indicate a growing political divergence between young men and women, with each group gravitating toward different ideologies. - Racial voting patterns: Race is a crucial factor in US electoral politics. African Americans have traditionally supported Democrats, with 87% backing Biden in 2020. However, the rate of Democratic support among African American voters has been declining slightly since Obama’s 2012 re-election. Kamala Harris, of African American and South Asian-American descent, introduces a new dynamic. Whether this will significantly boost voter turnout amongst these groups remains to be seen.
- Gender dynamics: Women have outvoted men in every U.S. election since 1980. How women vote will become very important for Trump and Harris. White women leaned Republican in 2020, with 55% voting for Trump, while 90% of non-white women backed Biden. Interestingly, recent polls show that more Biden voters are reconsidering their 2020 choices compared to Trump’s base, raising questions about whether Harris can retain female support in 2024.
The real impact of the US elections on India
Let’s explore a few significant areas that will be impacted by the election of the new President of the USA –
- Trade: One of the most critical bilateral engagements between India and the USA is trade. Provisional data from the Commerce Ministry shows that India-U.S. bilateral trade grew by 7.65% in 2022-23, reaching USD 128.55 billion, compared to USD 119.48 billion in the previous year.
A report by the PHD Chamber of Commerce and Industry (PHDCCI) projects that trade between India and the U.S. could reach USD 300 billion by 2026-27, reflecting the significant potential for further growth and collaboration across multiple sectors. - Investments: Over the last 10 years, India has witnessed a cumulative FDI inflow of USD 667.4 billion, registering an increase of 119% over the preceding decade (2004-14). FPI net investment stands at USD 291.7 billion, which has increased by USD 130 billion since FY 2013-14.
Foreign investors have consistently looked at India for different opportunities. Irrespective of who comes to power, FIIs (Foreign Institutional Investors), FPIs (Foreign Portfolio Investments) and FDIs (Foreign Direct Investments) will continue to take advantage of our growing economy.
It will be interesting to closely track how post-election policies aiding growth and stability of the economy will result in increased diversion of capital towards US companies and financial markets. - Foreign policy: The relations between India and the USA have become more intertwined in recent years with stronger collaborations and partnerships in the defence sector, bilateral agreements on national and international security, engagements on conflicts, etc.
Over the last 8 years, India and the USA have signed several important agreements like LEMOA (Logistics Exchange Memorandum of Agreement), COMCASA (Communications Compatibility and Security Agreement), BECA (Basic Exchange and Cooperation Agreement), and undertaken military procurement, including MH-60R Seahawk helicopters, Sig Sauer rifles, M777 howitzers, and MQ-9B HALE (High-Altitude Long-Endurance) UAVs.
The India-US Defence Acceleration Ecosystem (INDUS-X) launch in June 2023 fostered defence innovation and industrial cooperation.
Given the current state of world affairs, the incoming President will have to manage a complex geo-political environment. India will be a crucial partner for the US in the larger scheme of things. We can expect more engagements between both nations to benefit our defence and allied sectors. - Technology: One of the key areas of collaboration in which the private sector and the governments have engaged is advanced technology. The AI revolution will bring more opportunities between Indian and US companies, spurring new avenues for growth and productivity. The economic impact of this technological advancement will be evident in the mid to long term. NVIDIA’s partnership with Reliance Industries to develop AI infrastructure, Microsoft’s investment of USD 3.7 billion, Amazon’s investment of USD 12.7 billion, etc., are just the beginning.
- Immigration: One topic of concern for the US and Indian IT companies is immigration. Depending on who comes to power, a pro-immigration stance of the incoming administration with changes to the H-1B visa policy will considerably improve the IT services segment, which benefits companies in the countries.
- Climate action and sustainability: Over the last few years, the US government and businesses have been championing the adoption of environmentally sustainable practices and climate action solutions. With India, the US Government has been involved in multiple initiatives, including Strategic Clean Energy Partnership (SCEP), energy storage, hydrogen and offshore (RETAP), finance for clean energy technology (IBRD), common standards for sustainability measurement, carbon accounting, etc., which will help our economy in the long run to create a sustainable energy sufficiency. It will be interesting to observe how the incoming administration will further these engagements to improve climate action and sustainability.
These key factors illustrate how the U.S. presidential elections can shape economic interactions and opportunities for India, regardless of who wins.
In summary
While the speculations around who will win elections or the market volatility around an election are unnecessary, I find elections very interesting.
It is a great way to get the pulse of a country, its people and their behaviour, needs and wants.
The outcome of the US elections has far-reaching implications, and its impact on India is no exception. From trade and investment flows to technology and immigration, the policies of the new US administration could significantly shape India’s economic landscape.
While these elections will set the course for future opportunities and challenges, irrespective of who comes into power, we will continue to see deeper partnerships and growth, especially in sectors such as defence, climate action and technology.
What are your thoughts on the elections?
I would love to hear your thoughts! Do write back and share interesting perspectives about these elections that have caught your attention.
Disclaimer: The information contained herein is for informational purposes and should not be interpreted as soliciting, advertising, or providing any advice.