Trump win could bring added vibrancy to VC interest in Indian startups

Bengaluru: The upcoming Trump administration’s focus on business will boost investment fervour and some of that should reach India, say venture capitalists.

While the change of regime in the US augurs well for India’s startup ecosystem, those who’ve been tracking the sector underscore that the good times ahead were visible even before the election outcome. They attribute this to the buoyancy Indian stock markets and the turn-off from China, among other factors, pushing more money to the subcontinent.

“There should be more money in India, but it’s coincidental that it’s with Trump’s return. Still, Trump and Musk might fast-track things and get a lot of things pushed through,” said Sanjay Swamy, founder and Managing Partner at Venture Partners.

“The Indian startup ecosystem remains largely insulated from US political shifts. A buoyant US economy will provide some tailwind to SaaS players selling to US businesses,” said Dushyant Singh, Managing Director, Playbook Partners.

There are others who see Trump’s win bringing new opportunities for Indian startups in sectors such as manufacturing, tech, and defence, according to VC players.

“People were actually holding back. They were uncertain about what would be the outcome, but now the certainty is there. People know that it will be economy-driven policies. We were already very positive about India's story, but now we will see more vibrancy because of the new development in the world. India will also be busy because of its labour,” said Anil Joshi, founder and Managing Partner at Unicorn India Ventures.

“With a robust startup ecosystem, expected to grow at 12-15% annually, India’s reliance on foreign investment, particularly from US investors, positions it to feel the repercussions of the US election closely. US investors participated in approximately 30% of Indian startup transactions in 2020, contributing 60% of the funding,” said Sandiip Bhammer, founder and Managing Partner of New-York based Indian climate tech firm Green Frontier Capital.

In terms of sectors, Joshi said, “We'll see more acceptance of technology products. Over the next decade, we will see a lot of investments in industries like defence, semiconductors, and space, especially with the US being the pioneer and with Elon Musk. If Indian companies have good things to offer, they will certainly benefit.”

According to Bhammer, “With Trump's victory, the new administration's pro-business approach could increase investments in traditional industries like manufacturing, industrial technology, and infrastructure. Under Trump's admiration, there exists the potential for a lesser focus on green technology.”

Swamy did not agree. “With Musk by his side, Trump will find a way to play a role in climate space which may create a lot of opportunity for Indian startups,” he countered. He also sees a boost in manufacturing for items like chemicals, furniture, as well as tech, software, payment solutions, and cross-border commerce.

Startups echo the sentiment.

"Lowering of taxes may increase money in the hands of investors. In terms of sectors, a huge jump in defence and aerospace will be seen due to large opportunities,” said Abhishek Jain, Chief Business Officer of defence startup Zeus Numerix.

Balaji Srihari, Business Head of crypto startup CoinSwitch, said, “Bitcoin reached a new all-time high following the US election and Trump’s victory, a trend further fueled by the Federal Reserve’s interest rate cuts. Historically, the crypto market has thrived in low-interest environments as investors seek higher returns in alternative assets. It’s clear that a unique, pro-crypto environment is taking shape.”