Tariffs and Tensions: Is Trump Hiking Tariffs on India Because Indian-Americans Back Democrats?

New Delhi- The relationship between the United States and India has been a cornerstone of global diplomacy, marked by economic partnerships, strategic alliances, and a shared commitment to democratic values. However, recent trade policies under former President Donald Trump, particularly his administration’s imposition of tariffs on Indian goods, have sparked debates about the underlying motivations.

A groundbreaking study titled An Emerging Lobby: An Analysis of Campaign Contributions from Indian-Americans, 1998-2022 by Karnav Popat & Vishnu Prakash (Ashoka University) and Joyojeet Pal (University of Michigan) offers a compelling perspective: Trump’s tariff policies toward India may be partially explained by the Indian-American community’s overwhelming financial support for Democratic candidates.

The study reveals a consistent and pronounced Democratic lean among Indian-American political donors, with Trump receiving one of the lowest shares of their contributions in recent electoral cycles.

The Indian-American community has emerged as a significant force in U.S. politics over the past two decades. From 2000 to 2023, their population surged by over 150%, growing from 1.9 million to more than 4.9 million, making them the largest Asian-American subgroup. This demographic expansion has been accompanied by increasing affluence, with Indian-Americans boasting a median household income of $147,000 and 80% holding bachelor’s degrees or higher, according to Pew Research Center data from 2024.

Their socioeconomic profile aligns with high political engagement, evidenced by a 71% voter turnout in the 2020 election, the highest among Asian-American subgroups. The study highlights that this growing influence is reflected in campaign contributions, meticulously documented by the Federal Election Commission (FEC) and compiled by OpenSecrets, a non-profit tracking political finance. By employing a novel name-based ethnicity classification method, the researchers analyzed contributions from Indian-Americans between 1998 and 2022, uncovering trends that reveal both their political preferences and their impact on U.S. elections.

One of the study’s central findings is the Indian-American community’s strong preference for Democratic candidates. In the 2020 election cycle, Indian-Americans contributed $46.6 million to Democrats compared to just $16.3 million to Republicans, supporting 656 Democratic candidates versus 484 Republican ones. This Democratic lean is consistent across nearly every state and industry, with states like California, New York, and New Jersey, home to significant Indian-American populations, showing particularly strong support for Democrats. For instance, in California, which accounts for 20% of the U.S. Indian-American population, approximately 30% of Indian-American campaign contributions originated in the 2020 and 2022 cycles. The finance and healthcare sectors, where Indian-Americans are heavily represented, further amplify this trend, with finance professionals contributing $24.8 million and healthcare professionals $20.2 million in 2020, predominantly to Democratic causes.

The study’s methodology is a critical component of its insights, addressing the challenge of identifying Indian-American donors in FEC filings, which lack explicit demographic markers like ethnicity. The researchers developed a hybrid name-based classification approach, leveraging datasets like the 2021 Facebook dump of nearly 38.5 million names to estimate ethnicity based on the relative popularity of first and last names in India versus the U.S. For example, a name like “Vinod” was found to be 56.8 times more popular in India, making it a strong indicator of Indian origin. The process involved three stages: assessing name popularity, using n-gram classification to identify patterns in names, and manually verifying results for accuracy. This method achieved a 99.71% accuracy rate on a test set of 60,830 unique donors, with an F1 score of 87.61%, demonstrating its robustness despite challenges like ambiguous names (e.g., “Roy” or “Khan”) that are common across multiple cultures.

The implications of these findings are particularly striking when viewed through the lens of U.S.-India trade relations, especially Trump’s tariff policies. During his presidency, Trump imposed tariffs on Indian steel and aluminum in 2018, prompting retaliatory tariffs from India on U.S. agricultural products and other goods. These moves strained bilateral trade relations, despite India’s strategic importance as a counterbalance to China. The study suggests that the Indian-American community’s minimal financial support for Trump, evidenced by his campaigns receiving less than 0.8% of their funds from Indian-American donors, may have contributed to his administration’s willingness to adopt protectionist measures against India. In contrast, Democratic candidates like Hillary Clinton and Joe Biden received significantly higher support, with Clinton raising $8.7 million (2% of her total funds) and Biden $10.7 million (1.6%) from Indian-Americans in their respective presidential campaigns.

The study also highlights the role of “mega-donors” and “bundlers” in amplifying Indian-American political influence. Mega-donors, such as venture capitalist Vinod Khosla, who contributed $2.4 million in 2020, and healthcare magnate Prem Reddy, who donated $2.2 million from 2018 to 2022, wield significant financial clout. However, their contributions pale in comparison to top donors like Timothy Mellon ($45.1 million in 2020) or Elon Musk ($275 million in 2024), underscoring the absence of Indian-American donors among the very top tier. Bundlers, like Ramesh Kapur and Vivek Murthy, play a different but equally vital role by organizing fundraisers that channel community wealth to candidates. In 2020, Indian-Americans comprised 3% of Joe Biden’s bundlers, double their population proportion, indicating their growing organizational influence. This fundraising prowess was evident in Kamala Harris’s 2024 campaign, which reportedly raised millions from Indian-American donors, despite her emphasis on her African-American heritage over her Indian roots.

Geographically, the concentration of Indian-American donors mirrors their population distribution. California, New York, and New Jersey account for a significant share of contributions, with California alone contributing $34.3 million in 2020. The study notes that these states are home to key industries like finance, tech, and healthcare, where Indian-Americans are overrepresented. For instance, in California, finance professionals contributed over $10 million in 2020, driven by figures like Khosla and Sameer Gandhi, a venture capitalist with investments in Dropbox and Spotify. Healthcare, another dominant sector, saw contributions from professionals like Prem Reddy, whose Republican leanings contrast with the broader Democratic trend among Indian-American donors. In New York, financial sector donors like Bharat Bhise, who contributed $660,000 in 2020, further illustrate the community’s economic influence.

The study also explores the cultural context of Indian-American political engagement. Unlike India, where private political contributions are often viewed skeptically, the U.S. culture of transparent campaign donations is a learned behavior for Indian-American immigrants. The 2020 election marked the first time Indian-Americans contributed at a lower rate (1.3%) than the general U.S. population, suggesting their political behavior aligns more closely with other affluent, educated American groups. However, their contributions remain significant, totaling $122 million in 2020, 1% of the cycle’s $12 billion total, slightly below their 1.5% population share. This gap highlights the lack of Indian-American mega-donors capable of rivaling the likes of Sheldon Adelson or Elon Musk, whose contributions can single-handedly shift electoral dynamics.

The Indian-American community’s political preferences are further complicated by their dual identity. The 2020 and 2024 Indian-American Attitudes Surveys reveal a paradox: Indian-Americans are liberal on U.S. issues but more conservative regarding Indian politics, often expressing favorable views toward India’s Prime Minister Narendra Modi. This duality was evident in the backlash faced by Preston Kulkarni, a Democratic candidate in Texas, whose ties to Hindu nationalist groups alienated moderate and Muslim constituents. Despite such incidents, the community remains a reliably Democratic bloc, with all six Indian-American members of Congress in 2024—known as the “Samosa Caucus”—affiliated with the Democratic Party. Candidates like Ro Khanna and Raja Krishnamoorthi initially relied heavily on Indian-American donors but diversified their funding base over time, reflecting the community’s role as a “launchpad” for its political figures.

The study’s findings also shed light on specific candidates favored by Indian-Americans. Beyond presidential candidates, Congressional candidates like Shiva Ayyadurai and Suraj Patel stand out. Ayyadurai, a controversial figure who self-funded his campaigns, raised significant funds from Indian-American donors, while Patel’s strategy of tapping into the Gujarati community resulted in $5.5 million from Indian-Americans, with $4.38 million from donors named “Patel.” These examples underscore the community’s tight-knit networks and financial might, particularly in supporting candidates with cultural or ideological ties.

The broader context of U.S. campaign finance, shaped by the 2010 Citizens United v. FEC decision, has amplified the influence of wealthy donors and political action committees (PACs). The study notes that PAC contributions, particularly among Republicans, have grown significantly, with Republican PACs receiving $2.5 billion in 2020. Indian-American contributions to PACs, while still Democrat-leaning, favor Republicans more than direct candidate contributions, reflecting strategic differences in how the community engages with political structures. The rise in overall campaign spending, $24.3 billion in the 2023-2024 cycle, per FEC data, further underscores the growing importance of financial contributions in U.S. elections.

Read the full report here.