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How US relations worldwide affects India

Jan 29th, 2017 9:25 am | By | Category: LATEST NEWS


During the campaign US President Donald Trump famously said “I am a big fan of Hindu. I am a big fan of India.” Did he mean it or was it just campaign rhetoric?

Does Donald Trump present an opportunity or a challenge for India? That depends on how seriously you take what he’s said. Until he acts we’ve nothing else to go by.

First, the impact of his broad handling of international relations. Trump has spoken warmly of President Putin, talked of lifting sanctions and wants engagement with Moscow. His secretary of state is a close friend of the Russian President. In contrast, Trump has threatened a tougher line against China. The one-China policy is open for reconsideration and the country could be penalised for currency manipulation.

Friendly relations between the United States and Russia suit India because we can then pursue closer relations with both without contradiction. Also, a US-Russia détente would diminish Russia’s dependence on Beijing. And any policy that confronts China’s expansion can’t disadvantage India.

Trump tells Modi India ‘a true friend and partner’, invites PM to US

Now to the economic impact. The key concern is what happens to H1B visas. Both the US president and his attorney general talk of reducing H1B visas. This would be bad news for India’s information technology industry, 60% of whose $108 billion exports go to the US. Companies like Infosys, Wipro and TCS could suffer.

However, that could also impact the American enterprises which rely on them. As the latter’s costs rise they’ll be passed on to their American customers. The question is could this make Trump change his position? No one really knows.

Finally, what about Trump’s attitude to American companies that establish factories abroad? Ford has three in India and intends to export most of its cars. Now, undoubtedly, exports to the US will be affected but will that make such companies rethink their India strategy? I guess that depends on how badly they’re affected.

If all this suggests we have more questions than answers that’s undeniable. But a Trump-like change creates worrying doubts alongside great expectations and you have to keep your fingers crossed till you discover what will actually happen.

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