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India Confident of Strategic Partnership Under Trump

Anjana Pasricha November 15, 2016

A strategic partnership built between India and the United States in the last two years is expected to deepen under a Trump administration.

However, India's famed information technology sector could suffer, along with Prime Minister Narendra Modi's plan to turn the country into a manufacturing hub, if President-elect Donald Trump acts on campaign pledges to restrict immigration and bring jobs back to the United States, some Indian analysts and observers say.

"When the dust settles down, I don't think India will have cause for complaint under a Trump presidency," said Lalit Mansingh, a former Indian ambassador to the United States

He added that Modi, who has vowed to diplomatically isolate Pakistan for its alleged support of cross-border terrorism, will hope to get more support from Trump, who advocated a tougher stance on terrorism during the campaign. India accuses Islamabad of backing Islamic militant groups fomenting terrorism in India, a charge Pakistan strongly denies.

Mansingh predicted Trump would be a stronger ally on terrorism: "I expect that he will go a step further than what his predecessors did in applying pressure on Pakistan, because all the previous administrations have said the right things but have hesitated from putting pressure on Pakistan because it might affect their operations in Afghanistan. I think Trump may be more forthcoming."

But there is much more uncertainty about how a Trump administration will affect wider Asian geopolitics. Concerns about China's growing assertiveness in Asia and its expanding influence in India's neighborhood helped prompt Modi to deepen India's military cooperation with the United States, shedding its traditional hesitations about moving too close to Washington.

Modi optimistic

For his part, Modi has sounded an upbeat note on the future of India-U.S. ties under Trump. In a phone call to the president-elect after his victory, Modi said he hoped the two nations would continue to build on the "bedrock of strong Indo-U.S. ties" and tweeted about taking bilateral relations "to a new height."

But Jayadeva Ranade, a foreign policy analyst in New Delhi, warned of major changes in Asia Pacific geostrategic landscape if the U.S. opts for a more insular policy. He pointed to the possibility of the U.S. scaling back its presence in the South China Sea.

"What he [Trump] has said about not wanting to be engaged in military terms in the Asia Pacific in effect would mean ceding space to China," Ranade said.

New Delhi, conversely, wants to see Washington deepen its engagement in the region.

Economic concerns

India's bigger uncertainty relates to how a Trump administration will redraw economic and trade policies at a time when New Delhi has been wooing U.S. companies for more investment and business to boost its economy.

If election rhetoric targeting both immigration and outsourcing translates into policies, India's $150 billion information technology sector, already battling a slowdown, could face more turbulence. The United States, one of India's largest investors, employs millions there and accounts for 60 percent of the country's software exports.

The biggest perceived threat is to H-1B visas, which allow foreign professionals to work in the U.S. and are heavily used by Indian software companies. Indians received more than two-thirds of the H-IB visas in 2014.

Trump's earlier statements that these visas hurt American workers and serve as a "cheap labor program" have raised fears that his administration may move to restrict or raise costs.

This would hit Indian IT companies, according to Shivendra Singh, who heads global trade development for the National Association of Software and Services Companies (NASSCOM), which represents India's technology industry.

Singh said he hopes the flow of professionals from India will not be restricted.

"It is not that we don't want to hire locally. Definitely that is not the case," he said. But until the United States can address a domestic shortages of STEM skills – in science, technology, engineering and math – "this approach has proven well."

Investment concerns

The possibility of growing U.S. protectionism under Trump also has raised fears of a slowdown in investment flows from the world's biggest economy. Since taking office, Modi has been wooing foreign firms to set up manufacturing bases in India, hoping to usher in a manufacturing revolution of the kind that China has experienced.

But many analysts feel that India does not have much to fear. They point out that the U.S. is also looking for export markets, and India's growing economy and huge middle class will lure American companies.

Among those who think that Trump will look favorably on strengthening economic ties with India is Mansingh.

"Particularly as Trump himself comes from a business background," the former ambassador observed, "he will be sympathetic to a greater role for business on both sides."

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