IMPACT OF TRUMP PRESIDENCY ON INDIA

Donald Trump’s improbable victory in the U.S. presidential election provoked global shock and angst on Wednesday over the implications for everything from trade to human rights and climate change. The bombastic billionaire defeated Hillary Clinton in a result that few predicted, as millions of American voters shrugged off concerns over his temperament, lack of experience, and accusations of sexist and racist behaviour.

The India-US “defining partnership” opened a new chapter with the stunning victory of Donald Trump. The element of unpredictability that has just been introduced could go either way, but an initial sweep of Trump’s probable foreign policy gives India an opportunity to up its game with the United States.

In India, Donald Trump’s victory could cause short-term economic panic, but may have long-term foreign policy benefits, argues Neelam Deo, the director of foreign policy think tank Gateway House. Close ties between the US and India under the Obama administration could also take a turn for the worse.

Trump’s view towards India

Trump has indicated that he would work towards a stronger relationship with India, saying he would be “best friends” with India, and broadcasting a message in Hindi saying “ab ki baar Trump sarkar,” referring to Modi’s campaign slogan in 2014 elections. It is unclear if those statements would translate to foreign policy benefits for India as they are designed to woo a small contingent of American Indians.

During the campaign, Trump referred to India in several ways: As a country that was growing fast, as a country that was stealing American jobs, and as a target for terrorists. Early on in his campaign, he declared he was “looking forward to working with Narendra Modi”.

Policy on Government spending and taxation

Trump said that he would leave Social Security as is, trumprepeal and replace Obamacare, and make  government spending more efficient and effective though here he has not been specific.

Trump is proposing lower tax rates for individuals and US companies. The US currently has a federal corporate tax rate of 35%, the highest in the OECD. Trump is calling for it to be lowered to a below-average 15%, with firstyear business investments to be deductible in full.

 

Policy on Immigration

trump2Immigration is one aspect of Trump’s policy that has been heavily covered by the media. The country’s economic potential would be harmed by the greater economic isolation proposed by Trump, particularly his plan to deport over 11 million illegal immigrants and increase trade barriers with Mexico and China, countries he accuses of taking advantage of their relations with the US.

 

Fears over Mr Trump’s anti-trade rhetoric were reflected in the falling shares of major Asian exporters – from car makers to cargo firms to shipping companies. He has promised to bring jobs back to America. Trump has promised to punish firms that send their jobs to Asia which could hurt economies like the Philippines and India that have massive outsourcing industries.

 

Trade Policy

Trump has also promised to ramp up US military presence in the South China Sea (SCS). In the recent past, India has quietly despaired that US’ “rebalance” may remain on paper. Increased US presence in the SCS would be welcomed in both New Delhi and Tokyo.

trump3While Trump has promised to take China to task on unfair trade practices, India would be on the mat as  well because its own trade policies are regressive.

India has benefited from globalisation, but Trump has been elected on a
platform that might make the US more inward-looking. That might cause some amount of crossed wires between India and the US. It’s safe to say that Trump will not move forward with the Trans Pacific Partnership (TPP). For India, which does not qualify for the TPP yet, it might be an opportunity to play a better trade game.

Sources:

https://www.project-syndicate.org/commentary/clinton-trump-economic-policies-by-michael-boskin-2016-09

https://www.theguardian.com/world/2016/nov/10/an-epochal-change-what-a-trump-presidency-means-for-the-asia-pacificregion http://www.bbc.com/news/business-37933376

http://timesofindia.indiatimes.com/united-states-elections-2016-us-elections-news-results-polls/India-seeks-ally-against-PakChina-axis/articleshow/55344108.cms

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