Context:
Republican Party nominee Donald Trump has won the presidential elections in the US by beating Hilary Clinton.
Possible impact on India:
Positives:
1. Trump has used strong words on the need to curtail ISIS and curb immigration from countries that export terror. This would be in concurrence with India’s fight against terrorism.
2. Trump has promised to unleash America’s shale oil, natural gas and coal reserves to make U.S energy self-sufficient.
a. Opening up of the US oil sector could lead to price stability globally.
b. It could also throw open massive business opportunities for Indian oil companies including the state owned ONGC whose foreign arm ONGC Videsh Limited has been expanding its operations globally.
3. He has labelled Pakistan as semi-stable and a safe haven for terrorists.
a. This could mean the continuation of US’ Pivot to Asia policy where India is seen as a counterbalance to China.
b. Trump’s hard stance on terrorism could also result into deeper Indo-US defense and strategic ties.
4. Donald Trump has called for imposing higher tariffs on Chinese goods, initiate litigation against China for stealing American trade secrets and bring trade cases against China at the WTO to force it to cut down its trade subsidies.
a. If Trump fulfills his promises and decides to curb Chinese imports, it would have some benefit for India as India could diversify its export to US.
b. But it would be a challenge as India is still lagging far behind China in manufacturing sector.
Negatives:
1. Trump has promised to reduce corporate taxes to 15% (at present 35%). This would make US an attractive business destination around the world. This may result into the moving back of the US companies from India, hitting its make in India push.
2. Immigration: Although his immigration plan is directed towards the Mexican, Trump has called for restricting skilled visas to make more jobs available to Americans.
a. That would hurt the top Indian IT companies that make their billions by using the H1B visa programme that allows low cost skilled Indians to work in the U.S.
3. Scrapping up of Obamacare is one of the prime goal of Donald Trump. The scheme aimed at providing affordable healthcare to Americans.
a. That could be bad for the Indian pharma sector. Pharmaceuticals constitute the second biggest exports of India to the U.S. India’s strength in manufacturing affordable generic drugs complemented the objectives of Obamacare.
b. Indian IT companies which provide support to the program could also end up losing their business that could lead to job cuts in India.
4. Trump’s policy of less US intervention in west Asian region could mean a heightening of security and economic risks for India. Less US attention in the Gulf-Middle East region could mean a spurt in tensions in the region.
a. This is the region where India has a large number of expatriates and remittances are to the tune of about $70 billion. It is a major source of energy for India.
c. Less US attention on the Af-Pak region could mean a spurt in terrorist activities that would impact India.
Conclusion:
Traditionally, it has been seen in India that a republican president is better than Democrat when it comes to serve India’s interest. However, the Republican v/s Democrat debate with respect to relations with India has little relevance now.
Since the Bill Clinton Administration, relations between India and the U.S. have warmed up to a scenario where the idea of estranged democracies seems implausible. The Obama Administration continued with Bush’s legacy with regard to India, by strengthening ties between the two countries on a variety of fronts including defense, economy and terrorism.
Therefore, Donald Trump has inherited a foreign policy towards India that has been on an upturn for at least a decade now. However, The U.S. executive does have massive discretionary powers with regard to foreign policy. But they are still subject to democratic checks and balances. The U.S. President is the face of America but foreign policy is not contingent on their worldview alone.
At the end of the day, international relations do not depend solely on leaders.
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