What does the victory of Donald Trump in USA means to India
Donald J Trump won the 2016 US election to be the 45th President of the United States, during his election campaign he drew the people's attention on many major social, political and economic policies which he promised to take during his presidential term. He also announced his campaign slogan "Make America Great Again". He has coined many policies for the welfare of America and this is how it is impacting India and its citizens.
Cut down on Immigration
Trump wants to cut down on Immigration which is a major impact for top Indian IT companies. Donald Trump's policy of providing more jobs to Americans and thus restricting skilled visas entering into America will cost a lot to top IT Indian firms. As of now Top Indian IT companies are making H1B visas and sending many of their employees to work at a lower cost in the US. In the year 2015 US issued 1, 72,748 H1B visas in which about 86% were issued to Indians employed by companies like TCS, Infosys and Wipro. Many US companies operating in India like Cognizant also sends its employees to work in US as Indians are cheaper compared to the local Americans. Every American presidential candidate does not favor the H1B visa during his election campaign but never follows his promise; how far Donald Trump goes with his stand is to be watched out for.
Reduction of US Corporate TaxDonald Trump has promised to reduce the US Corporate Tax rate from 35% to 15% which could result in companies like Ford, GM and Microsoft rushing back to US. Thus he is aiming at bringing American jobs back from India which is surely a negative sign for India. Ford is currently having its manufacturing unit in Chennai in India, If Trump follows his policy then Ford will shift its manufacturing unit from Chennai to Chicago, this will be a bad news for Ford India as there will be job cuts for the employees of Ford India.
Scrapping of Obamacare
Trump's vow of scrapping Obamacare, is a bad news for Indian pharma sector. Pharmaceuticals constitute the second biggest exports of India to the US. India's strength in manufacturing affordable generic drugs complemented the objectives of Obamacare. Indian generic drug companies had gained massively with a sub-legislation under Obamacare that allowed the use of 'biosimilars'. According to US Census Bureau data, when Obamacare was signed into in 2010, India's pharma exports to the U.S were $31 billion. Five years of Obamacare more than doubled pharma exports from India to the U.S to $66 billion. If Trump implements his promise to junk Obamacare, Indian drug companies could be severely hit. Indian IT companies which provide support to the program could also end up losing their business that could lead to job cuts in India.
Trump has promised to make America energy self-reliant by unleashing its own oil, natural gas and coal reserves. He also promised to open onshore and offshore leasing on federal lands. India is currently importing fuel and is paying a high price for it, and if the fuel prices rise then the prices of all other commodities also hike up. If Trump's promise comes then India will benefit in a large scale. Opening up of US oil sector will result in price stability globally and it will throw lot of opportunities to Indian oil companies like ONGC (Oil and Natural Gas Corporation), OVL etc.
Curtailing Chinese Trade
Trump had criticized China more than anyone in his recent elections. The Republican president coined China as a currency manipulator. He has mentioned of imposing large tariffs on Chinese goods and has forced to cut down its trade subsidies. Throughout his campaign he has elucidated that he would bring down the trade connections with China. If Trump decides to bring down Chinese imports, it would benefit India and will boost the Indian trade with US in terms of electronic goods, communication products, gems and diamonds export will also go on their high.
Reviving the American economy
Trump plans to boost GDP growth to 4% by adding 25 million jobs over the next decade. This would mean big possibilities for not just big businesses in India but also for smaller ones to invest in the US. If any entrepreneur can do this in the US then they are eligible for the most prestigious green card in US.
India has 2.5 lakh millionaires and the number is expected to double by 2025. That would mean more opportunities for Indians to invest in the U.S and get that much coveted green card.
Some of his policies are having positive impact on India and some are negative, we have to watch out and see how far Trump's words are turned into reality, and whether it is truly having a positive or negative impact on India and Indians.
- K.P. Nagasaritha