Trump’s return to the White House could reshape South Asia’s geopolitical and economic landscape, amplifying tensions while opening new avenues for strategic alignment.

However you slice it, the global community isn’t thrilled that Donald Trump is president again. Trump’s second term promises a reshuffling of domestic politics and a seismic shift in America’s posture abroad. Nowhere is this anticipation more palpable than in South Asia, a region once again preparing to recalibrate its strategies in response to Washington’s next chapter.

From New Delhi to Dhaka, from Colombo to Kathmandu, governments are warily eyeing a potential second Trump term. They expect renewed—if unpredictable—American engagement in trade, security, and strategic alliances. But what precisely does a Trump presidency portend for this complex and volatile region?

A muscular foreign policy defined Trump’s first term, much of it focused on containing Chinese assertiveness in the South China Sea. In South Asia specifically, his administration applied pressure on Pakistan to confront domestic terrorism, pursued a negotiated exit from Afghanistan, and strengthened strategic ties with India.

In 2019, the Trump administration negotiated a peace deal with the Taliban for a complete withdrawal, which the Biden administration would later implement—with disastrous consequences. The August 2021 exit marked the end of America’s longest war and a dramatic scaling back of U.S. presence in the region. In the wake of the withdrawal, Washington’s patience with Pakistan’s ambiguous stance on terrorism also wore thin, prompting President Biden to reach out directly to Prime Minister Shehbaz Sharif.

Conversely, U.S.-India relations flourished under Trump, built on mutual concerns over China and a shared interest in technology, defense, and economic cooperation. Trump championed increased bilateral trade, facilitated access to U.S. military hardware for the Indian military, and encouraged Indian innovation through targeted technology transfers.

Smaller South Asian nations weren’t ignored. In 2020, the U.S. opened a permanent diplomatic mission in the Maldives. American foreign direct investment surged in Bangladesh, securing duty-free access for select textile products under the Generalized System of Preferences (GSP). Meanwhile, Sri Lanka and Nepal were shortlisted for the Millennium Challenge Corporation (MCC), signaling U.S. interest in regional infrastructure development.

Security cooperation deepened as well. The Maldives inked a defense agreement with Washington, while Sri Lanka signed the Acquisition and Cross-Servicing Agreement (ACSA). Bangladesh entered discussions for the General Security of Military Information Agreement (GSOMIA). This web of military diplomacy signaled the Trump administration’s intent to reinforce American influence, particularly as Chinese engagement across South Asia intensified.

Donald Trump’s return elicits mixed feelings. His brand of transactional foreign policy could foster instability as much as engagement. South Asian capitals are, therefore, watching closely: Will the new Trump administration double down on its past priorities or veer into new and unpredictable territory?

While some of Biden’s initiatives will likely survive, Trump’s foreign policy is expected to pivot towards a more transactional, bilateral model. The broader strategic lens has already shifted: the U.S. no longer views South Asia merely through the prism of Afghanistan and Pakistan. Instead, it’s an arena of expanding Chinese influence, and Washington is recalibrating accordingly.

That recalibration comes at a time of regional upheaval. Relations between Pakistan and Afghanistan are at a historic low. Myanmar is mired in civil war. Bangladesh is grappling with political instability. Nepal, Sri Lanka, and Bhutan are in economic distress. In this volatile environment, America’s strategic choices carry disproportionate weight.

Trump’s likely focus is outmaneuvering China. The China-Pakistan Economic Corridor (CPEC), a cornerstone of Beijing’s Belt and Road Initiative, has heightened U.S. anxiety. But while Trump may ramp up military posturing in the Indo-Pacific, his administration lacks a nuanced counterterrorism strategy tailored to South Asia, leaving a critical gap in regional policy.

Trump’s return might not bring dramatic changes for nations like Sri Lanka and Nepal. His previous approach favored limited involvement unless strategic imperatives arose. However, any notable expansion of Chinese influence in Sri Lanka could trigger a swift American response. Nepal’s careful balancing act between China and India may draw renewed scrutiny as Trump intensifies efforts to blunt Beijing’s regional clout.

Expect friction in Bangladesh. Trump has previously taken hardline positions against regimes viewed as obstacles to U.S. interests. Human rights concerns could once again become flashpoints, potentially souring relations. Meanwhile, Pakistan is unlikely to receive any reprieve from U.S. pressure. Trump’s critiques of Islamabad’s counterterrorism failures were relentless, and that tone is expected to continue. Restrictions on military aid may well persist until demonstrable progress is made.

On the economic front, Trump’s ambitions are as sweeping as they are disruptive. The Trump administration has already embraced a new era of protectionism. His global tariffs could upend trade flows. To appease China hawks, Trump has already levied steep tariffs on China.

More radically, Trump has floated the idea of weakening the U.S. dollar to make American exports more competitive. Countries attempting to diversify away from the dollar or adopt alternative currencies would face retaliatory tariffs and punitive measures. The cumulative effect? A rollback of decades of trade liberalization, replaced by a system defined by economic coercion and geopolitical competition.

In South Asia, these shifts could hit hardest in economies heavily reliant on exports and development assistance. Nations like Bangladesh and Sri Lanka—already navigating debt and inflation—may be squeezed between competing global powers.

Yet amid the uncertainty, opportunity remains—especially for India. With its rising global stature and strategic proximity to China, India is poised to lead in shaping South Asia’s future. A Trump White House will likely support that ascent, viewing New Delhi as a counterweight to Beijing and a gateway to broader regional influence.

However, this enhanced U.S.-India alignment may also exacerbate existing divides. Smaller South Asian states, many deeply enmeshed in China’s Belt and Road Initiative, face mounting pressure to pick sides. Though some have benefited from Washington’s Indo-Pacific Strategy, their reluctance to fully endorse it has drawn quiet ire from the White House.

Donald Trump’s return presents South Asia with a paradox: the promise of renewed engagement, tempered by unpredictability and risk. His policies may amplify existing tensions or create space for new partnerships—but they will not go unnoticed.

As for the rest of the world, Trump’s second term could mark a profound shift in geopolitical and economic dynamics for South Asia. Whether that shift leads to greater stability or deeper divisions remains an open question. But one thing is certain: the region will not be passive observers.