Win Some, Lose Some: What President Trump Could Mean For India

(Trump) has threatened to levy 45 percent taxes on China by declaring it a currency manipulator. He has threatened 35 percent tax on goods coming in from Mexico. He has spoken about how jobs have gone to India and China and Mexico and Japan. Some of it is scatter short. Some of it may actually have consequences. So certainly our IT industry again, has been very shaky and they are very concerned on what this will mean for H-1B visas because it is linked with the hard positions taken on immigration by Trump in the course of his campaign.

...from India’s point of view the fact that the Americans will not sign the Trans Pacific Partnership (TPP) agreement is good, we are not a member of that. The fact that they will not sign a mega trade agreement with Europe, is also good for us. Because those are the agreements which raised the standards so much that we are not ready to fulfill those and they would have further constrained our access to European markets and to all the Asian and South American countries that would have been part of TPP. So actually I don’t see it as harming trade. Will it harm some of India’s exports to the United States itself, Yes. I think it will have an initial chilling effect on the IT industry and IT exports to the United States are alone $100 billion for us. But may be it is the shock that IT industry that needs to become more efficient, to move up the value chain, to not be complacent. 

I can think of two areas in foreign policy where there are expectations of things getting better. One is counter terrorism operations. While the American administrations have been vocal in giving support to counter terrorism, it has not translated into 100 percent satisfaction for India because India’s terrorism comes from its neighbours. Currently, the government is putting this across to the international community to recognise that Pakistan is the primary source of terrorism and we are its biggest victims. So in this situation, Trump, who is also very strong on the security issue and has made it an election issue, will take a tougher line on Pakistan.

As far as China is concerned, Trump has criticised its economic policies and therefore I think he will harden his stance on China in economic issues. But he will also recognise that China has been a threat to the countries in the neighbourhood in terms of its territorial claims and restrictions in sea lanes of commerce. So even on that front, I expect, a new American administration will give a greater support to India as far as the threat from China is concerned.  

There are security tensions between the two major powers. But at the same time, you have the picture of two economies which are perhaps more integrated with each other than any other two economies. They are joined at the hip in a sense. The U.S.-China trade is $1 trillion or more. if there is going to be am impact on that trade which causes economic dislocation and harm to the Chinese economy, which is very heavily dependent on the U.S. economy because of protectionist policies, on the one hand this could exacerbate the security issues. This could add an economic dimension to the rivalry we already see. But on the other hand, Trump also delivers on what is seen as a retreat from the alliance systems that U.S. has been leading, in Euope and East Asia, then that may not be unwelcome to China. But this may not mean a happy developement for India either because it will make the Chinese challenge for India that much more complex, more difficult to cope with.

...we should look positively on an improvement in U.S.-Russia relations because by putting sanctions on Russia, by pressurising Russia, the West had actually driven it into a much closer relationship with China than is good for us in India.