India's great Trump hope

Newly installed US President Donald Trump may be in a hurry to overturn many measures of the previous Obama administration, but a significant area he appears to seek continuity in is the close partnership America has enjoyed with India.

Within five days of assuming office, Mr Trump made a telephone call to Indian Prime Minister Narendra Modi to re-emphasise Washington's closeness to New Delhi.

It was by all accounts a courtesy call, but important in its symbolism, the President hailing India as a true friend and partner in addressing challenges around the world. According to a White House read-out on the call, the two leaders discussed opportunities to strengthen the bilateral partnership in broad areas such as the economy and defence. They also resolved that their two countries would stand "shoulder to shoulder" in the global push against terrorism. Mr Trump signed off with an invitation to Mr Modi to visit the United States, and it is likely that the Prime Minister will make his state visit by April.

Then President Barack Obama made a similar call to Mr Modi on Jan 19, a day before his term ended, where both the leaders discussed the progress they made on shared economic and security priorities, including recognition of India as a major partner of the US in defence and in addressing the global challenge of climate change.

An early Modi-Trump meeting will no doubt sustain the momentum in bilateral relations. In his tweet following his phone call with Mr Trump, the Prime Minister said he too had extended an invitation to the US President to visit India. "Had a warm conversation with President Trump last evening," Mr Modi added. "President and I agreed to work closely in the coming days to further strengthen our bilateral ties."

For his part, Mr Trump has appointed as many as six Indian- Americans to his administration. This includes his one-time fierce critic and first woman Indian- American governor of a US state (South Carolina), Ms Nikki Haley. Her appointment as the US Ambassador to the United Nations makes her the first Indian-American to serve at the Cabinet level in any US administration and the first non-white female member of the Trump Cabinet.

Right-wing activists of India's Hindu Sena party garlanding a poster of Mr Trump during an event in New Delhi on Jan 19, the day before his inauguration as US President. PHOTO: AGENCE FRANCE-PRESSE

The other five appointees are Mr Uttam Dhillon, appointed special assistant to the President where he will be part of the legal team led by White House counsel Donald McGahn, Ms Seema Verma (head of Medicaid and Medicare Services), Mr Ajit Pai (head of Federal Communications Commission), Mr Preet Bharara (US attorney for the southern district of New York, with jurisdiction over Wall Street), and Mr Raj Shah, who is part of the White House communications team. During his campaign and after, Mr Trump has lauded the 3.8 million-strong Indian diaspora in the US for its talents and hard work.

India is keen to move swiftly to elevate its strategic partnership with the new US administration, being one of the largest purchasers of American arms. Both countries have also set a target of expanding their US$100 billion worth of two-way trade fivefold in the near term.

At a charity reception hosted by the Indian organisation, Republican Hindu Coalition, during his campaign - to which it had donated US$1.5 million (S$2.1 million) - Mr Trump had exulted: "I am a big fan of Hindu and a big fan of India; big big fan, big big fan. Let me start by saying right up front that if I'm elected president, the Indian and Hindu community will have a true friend in the White House and I can guarantee you that."

Among those the President chose to meet within days of his win were three property developers from India, where they are building five Trump-branded luxury high-rises worth US$1.5 billion. These are possibly the largest real estate projects outside of North America that Mr Trump has lent his brand name to, with indications that three more projects will be launched this year involving equity investment.

India is keen to move swiftly to elevate its strategic partnership with the new US administration, being one of the largest purchasers of American arms. Both countries have also set a target of expanding their US$100 billion worth of two- way trade fivefold in the near term.

There are challenges, however, given Mr Trump's nationalist and protectionist rhetoric driving his "America First" vision. While he is banning visas for citizens of seven Muslim-majority countries, what is alarming India is his intent to tighten the H-1B visa that he believes is facilitating the entry of foreign workers at the cost of deserving Americans. India is the world's largest provider of information technology services, and 67 per cent of its US$130 billion IT business is accounted for by the US where some 350,000 Indian engineers work, on H-1B visas, with both Indian and American tech companies.

Washington approves nearly 200,000 H-1B visa applications yearly, including renewals and extensions, and Indian professionals whose visas are due for renewal are a worried lot. The visa entitles stay of a maximum six years in the US. Nasscom, India's National Association of Software and Services Companies, estimates that any rewriting of work visa rules to force cutbacks on outsourcing could cost Indian IT companies US$400 million a year, apart from large-scale job losses.

Also, American companies operating in India - whose tax payouts in India are on a par with their parent entities' in the US - will be motivated to return home if Mr Trump delivers on his promise to reduce corporate taxes in the US to 15 per cent from 35 per cent. Also imperilled are India's pharmaceutical exports that had boomed in the six years of Obamacare. Indian pharma majors had exported US$66 billion worth of generics since 2010 when the federal statute was enacted and which Mr Trump wishes to rescind.

With no clearly defined foreign policy as yet from the Trump administration, India is waiting for firmer indications. It is evident that despite their mutual exuberance, both Mr Modi and Mr Trump will have a weighty agenda before them when they meet in Washington.

  • The writer is the executive editor of Business India in Mumbai.
A version of this article appeared in the print edition of The Straits Times on February 18, 2017, with the headline 'India's great Trump hope'. Print Edition | Subscribe