Engaging with Trump
After US President Dold Trump called up Prime Minister rendra Modi soon after his iuguration, the impression has grown stronger that India figures high in the American geo-political scheme of things. Trump’s outright support for Israel (with which India has been drawing closer), his hardline against the IS brand of jihad and bellicose rhetoric against Chi seem to have struck responsive chords in New Delhi. Given the mutual admiration between Presidents Trump and Vladimir Putin, the possibility of a thaw in US-Russia ties can only be good news for India. Such a rapprochement will obviate New Delhi’s dilemma of prioritizing ties with one over the other; besides, if Washington opens its arms, Moscow will find it less necessary to seek Beijing’s embrace. There is a strong likelihood that the Trump administration will continue the Obama dispensation’s strategy of using India to counter Chi’s growing assertiveness in Asia. With Trump pulling out of the Trans-Pacific Partnership (TPP) in one of his first presidential acts, it leaves the coast clear for Chi to fill the vacuum and seek to be the heart of this prospective trade bloc. This in turn puts India on firmer footing to balance influences and pursue its diplomatic interests, as was evident from Prime Minister Modi’s carefully nuanced reference to Chi recently at Raisi Dialogue. While he spoke of the ‘unprecedented opportunity to tap the vast area of commercial and business opportunities’ between the two neighbors, he also asserted the need to ‘show sensitivity and respect for each other’s core concerns and interests’. Beijing was quick to appreciate Prime Minister Modi’s ‘positive remarks’, though it remains to be seen how far it is willing to accommodate New Delhi’s views on getting JeM chief Masood Azhar blacklisted by the UN and Chi-Pakistan Economic Corridor (CPEC) through Pakistan-occupied Kashmir, not to speak of India’s efforts for NSG membership.
It is clear that USA under Dold Trump is forcing new diplomatic equations, some of which New Delhi can leverage to its advantage, particularly in its struggle against terror. The House White has blandly stated that President Trump and Prime Minister Modi shared views on security in South and Central Asia, as well as discussed opportunities ‘to strengthen the partnership in broad areas such as the economy and defense’. The new US president has already made three high-level appointments of Indian Americans in his administration and two more to senior White House positions. The contours of the emerging engagement will be clearer by the time Prime Minister Modi gets around to visit the US expectedly in September. However, there are dark clouds over the Trump regime moving to lock down the US market with a promised series of protectionist measures. If US consumers are to ‘buy American’ and US firms to ‘hire Americans’, concerns are that it will hurt Indian techies working in that country as well as US firms outsourcing work to or operating plants in India. It so happens that 90% Indian workers use H-1B visas — the non-immigrant visas allowing US employers to temporarily hire foreign workers. The H-1B system has drawn flak for allowing US companies to employ low-wage foreign workers in place of Americans, and Trump on the campaign trail had denounced it as unfair. Now that the Trump administration is set to overhaul the system, it is likely to restrict the numbers of imported workers, push up their wage levels (to them on par with Americans) and ban their spouses from working in the US. For the Indian IT and pharma sectors particularly, these are challenging times. As for American firms like Ford that are exporting cars from plants in India, there is much uncertainty over Trump’s stated policy of tax breaks as carrot and punitive taxes as stick. This could spell trouble for Prime Minister Modi’s ‘Make in India’ campaign, unless the two countries work out wide-ranging deals to increase exports to each other over a wide range of sectors. If President Trump carries out his threat of breaking the near-monopolies of Chinese and Mexican exports in the US market, it could open doors for Indian exporters if New Delhi makes the right moves. It may well encourage top Indian firms to invest in the US market more and hire Americans on large scale, surely a win-win scerio for both sides.