Make in India, or Make America Great Again?

The prospects for India-US relations under Trump

Shreya Upadhyay

PHOTO: EPA

Trade and industry, International relations, National security | Asia, South Asia

25 November 2016

Comparisons have been made between India’s Prime Minister and the US President-elect. Shreya Upadhyay examines how deep any resemblances run and whether they will influence the India-US relationship.

The eyes of the entire world have been fixed on the US elections for the last two years, with India being no exception. Acolytes and critics alike managed to draw similarities between Indian Prime Minister Narendra Modi and President-elect Donald Trump. What are the perceived parallels between the two leaders and how will they affect bilateral relations in the coming years? Will Trump be America’s Modi?

Trump has never hidden his admiration for Modi’s ability to channel socio-economic reforms in India and tends to use the terms ‘Hindus’ and ‘Indians’ almost synonymously. Recognising the electoral potential of the 3.2 million-strong Indian American community in the US, team Trump reached out to them. Talking at an event organised by the Republican Hindu Coalition Trump promised that if elected, “The Indian and Hindu community will have a true friend in the White House”.

He also adapted and tweaked Modi’s 2014 election catch phrase to “Ab Ki Baar Trump Sarkar” (This time Trump’s government). The Indian Prime Minister, for his part, remained careful not to react to any of the controversies that dogged Trump and was swift in congratulating him after the election result, stating that the two sides will take the relationship to new heights. The leaders of both countries are scheduled to meet in the first 100 days of Trump taking office – the tone-setting period for any new administration.

Trump also received support from within India where ceremonial rituals were performed by some groups in the hope that their worship would get him elected so that he could “put an end to Islamic terrorism”.

More on this: ''While the American people have voted against the establishment, so far there isn’t much ‘anti-establishment’ about Trump at all''

There are certainly some similarities in the personalities of Trump and Modi. Trump positioned himself as an outsider who would provide a break from Washington’s politics-as-usual, campaigning on his dream to “Make America Great Again” and censuring Democratic pandering to particular groups, such as illegal immigrants. Modi during the 2014 election also criticised the previous government’s ‘pseudo secular policies’ and called for development, promising ‘Acche Din’ (Good Days). Trump’s speeches connected with ‘common people’ much like those of Modi. For their part, detractors have also alleged that the two leaders ascended to power by polarising voters along religious and ethnic lines, accusing both of having and perpetuating an anti-Muslim bias.

The similarities, such as they are, end there. Trump inherited millions of dollars from his family’s enterprise and presented an anti-establishment image. Before running for president, he had never held political office, instead aiming directly for the White House. Modi, on the other hand, sold tea on railway platforms in the state of Gujarat, of which he later became the Chief Minister before entering the national political fray. He was never anti-establishment. Their personal lives also stand in contrast. Modi, having left his wife, reportedly lives the life of a recluse. Whereas Trump has a penchant for stylish women, has been married three times and has five children.

Throughout the campaign, the media was so focused on reporting Trump’s diatribes against women, Muslims, and immigrants that he was not taken seriously on foreign affairs, trade relations, and geopolitical strategy. Indians remain largely confident that the Indo-US relationship has reached a level of bipartisanship that makes it largely immune from leadership change. Nonetheless, Trump’s election has added an element of surprise to how the relationship might unfold in the future.

Trump’s crusade against China’s economic power and suggestions he will enable legislation to declare Pakistan a terror state has surely helped keep New Delhi onside. To many in India, the Obama administration was lenient towards Pakistan and China and Hillary Clinton would, in all likelihood, have continued on the same path. But Trump’s anti-Muslim rhetoric, ranging from a complete ban to adopting a stringent vetting process, together with his open admiration for India, has induced fear in Pakistan. India has been looking to isolate Pakistan on the global front after the Uri attack and is hopeful to gain from Trump’s presence in the White House.

However, the US is likely to continue military engagement in Afghanistan and will, therefore, not be in a position to abandon Pakistan. The Republican administration can only show a tougher stance to pressure Pakistan into compliance, as well as reducing or blocking additional aid to the country.

More on this: Why China is not to blame for the decline of US blue collar jobs

On the trade front, Trump’s campaign promised to bring jobs back to the US and raise the barrier for imports, which could both prove to be a spoiler for the ‘Make in India’ campaign designed to “transform India into a global design and manufacturing hub”. In the course of his frenzied campaign, Trump blamed India several times for taking jobs away from Americans. In the past, he has also advocated for a 15 per cent tax on companies outsourcing their jobs. Any such move would impact India’s $82 billion software services export sector, of which as much as 60 per cent goes to the US and Canada.

However, we shouldn’t read too much into such promises. After all Obama, during his election campaign, frequently spoke out against outsourcing. Post-election, however, the status quo did not change. The reality is that the US economy depends on access to a global supply chain. Any disruption to this will increase costs for American households. Any protectionist or inward-looking policy will prove detrimental to US needs as well. Aside from that, American companies, such as Walmart, Facebook, and Apple, are looking to boost their presence in India.

Nailing down what Trump will do on immigration once in office remains a perilous exercise. The President-elect has sent some mixed messages, echoing a global backlash against soft borders and at others praising the contributions of skilled Indian workers, while also blaming India and China for being part of “the greatest jobs theft in the history of the world”. Yet he seemed to be in favour of bringing skilled foreign workers into the US legally. Trump’s transition team has outlined a 10-point plan to “restore the integrity” of the US immigration system, which as expected, would benefit educated Indians while countries with “radical ideologies” are set to lose out. He has been in favour of increasing the H1B visa fees and reducing the US corporate tax rate to pressure companies into hiring domestic workers and incentivise them to shift operations back to home soil.

At present India’s IT and outsourcing companies already face challenges due to automation and robotics. The US needs skilled engineers. So India’s challenge is to become more competitive. Rather than being a warehouse of skilled and cheap engineers, it is time that India invested sincerely in research and innovation. This will decrease India’s dependence on any one country while also making it a much more attractive destination for goods and services, mitigating the inherent uncertainties arising from a change in the US administration, whatever the enduring “Trump effect” turns out to be.

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Citation

Upadhyay, Shreya. 2017. "Make In India, Or Make America Great Again? - Policy Forum". Policy Forum. http://www.policyforum.net/make-india-make-america-great/.

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