The outcome of the recent US elections has been surprising indeed with Donald Trump becoming the President; against all expectations. Trump raced to victory with his agenda of anti-immigrant and protectionist policies; with a heavy emphasis on ‘America First.' What do his controversial measures mean for India?
In his campaigns, he has never directly addressed his feelings for India except once stating that he loves Hindus. So it remains to be seen whether India becomes a closer ally of US under his watch or not.
His protectionist policies will affect India adversely. He has concentrated on job creation within the country and is against outsourcing. He went on to state that he was against the very system of H-1B visa; that he would end its use ‘forever.' The H-1B visa system has been responsible for allowing in more than 3,15,000 workers as of 2014; 70% of these visa holders are Indians. India contributes to a significant portion of the highly skilled immigrant labour in the IT sector and this puts them in jeopardy. However, he has also acknowledged the fact that all kinds of specialized labour might not be available within the country and immigrants need to be hired to fill that gap. According to a report in the Hindu, the percentage of Indian origin scientists and engineers has increased by 85% between 2003 and 2013 in the US. Would his approach complicate admission process for Indian students? What he decides to do as a President remains to be seen.
The EB-5 visa which involves investing a certain amount in projects that benefit America and creating jobs for American workers might gain more traction because this is in line with his view to promote American infrastructure and employment. This visa would translate to a green card at the end of 5 years if the above said conditions were met. Indians with sufficient financial resources will benefit if this is played out as expected.
His policies will also impact free trade between nations. During his campaigns, he has called for the renegotiations of many of the free trade agreements like NAFTA etc. and advocated withdrawing from the WTO. India is US’s 18th largest goods export market (as of 2013) and as for services, the trade between the two countries totals up to 30 billion dollars and any change in the trade agreements might indirectly impact this prosperous relationship.
There is also the tax aspect to be considered. If he fulfills his promise of reducing the corporate tax rates to 15% from the current 33%, there will be a reversal in the trend of American companies having offshore branches to reduce costs. Funds, however, might flow into other countries (like India) if the interest rates are to kept low as suggested during his campaigns.
Trump has also taken a very strong stance against terrorism. So India might expect some support from Trump on the Pakistan front. Trump has had called Pakistan the ‘most dangerous' country before and has also tweeted to the effect of calling Pakistan not a good ally as they had sheltered Osama bin Laden for six years. Trump sees China as a close competitor and has criticized it for manipulating currency which has disrupted American production. He wants China to review the trade agreements. This might be helpful for the Indian economy and relations with India could help the US maintain its influence over Asia. But China has already retaliated saying co-operation is the only option and if Trump tries blocking Chinese goods, China will, in turn, stop American goods from flowing into their market. There arises the possibility of a trade war. Putin had publicly supported Trump and this win might mean a new era of better US-Russia relations. Better US-Russia translates into lesser stress for India because historically the animosity between the two countries has created problems in maintaining good diplomatic ties with both of them simultaneously.
One of the biggest areas of concern is the clean energy deals between US and India. Just this year, these countries signed a Memorandum of Understanding (MoU) for work on climate change, clean energy, and energy security. These kinds of understandings won’t make much headway under a leader who thinks that climate change is a ‘hoax’ and has plans of backing out of the Paris Agreement at the earliest.
There is the psychological impact as well which will affect not only India but the whole world. The US is often hailed as an example of a rich, powerful and advanced nation. And when the leaders of such a nation are bigots and give hate dialogues with such openness, the rest of the world is at danger of following their dialogues and using that ideology to further their own ends. We saw this with the ‘havans’ that were carried out to propel Trump to victory. Such acts show that certain groups in our nation align with his hate and extreme nationalist philosophies.
Overall Trump seems positively disposed towards India, hailing it as a land of opportunities and growth. Both the country’s leaderships have portrayed a strong stand against Islamist extremist outfits. He even borrowed Modi’s election slogan and tried his hand at campaigning in Hindi. The US-India Political Action Committee has expressed confidence in better relations between the two countries. India will also have to see what the Trump presidency means for her bid for a permanent seat in the UN and entry into the Nuclear Suppliers Group. Though Trump has anti-immigrant tendencies, he has never expressed discontent with Indians per se. Indian Americans have reportedly been one of the major contributor groups to Trump’s campaign. In fact, one Indian American, the founder of the Republic Hindu Coalition, has been one of the biggest individual donors for his campaign with a donation amount of $ 900,000. India-US relations have reached the stage where they are now through continued efforts at friendship and diplomacy. They are expected to remain at this stage but of course, it is to be seen what new dimensions these ties take under the policies which Trump has hinted at.
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