Erratic realities

A Trump comeback spells more uncertainty for India

The Democratic and Republican national conventions are over and America’s 150-million-odd voters have had a chance to scrutinise both policy platforms beyond the stump speeches. After the 2016 shocker when Hillary Clinton consistently led the popularity polls, won the popular vote but lost the presidency in the Electoral College, predictions about Joseph Robinette Biden Jr’s ascendancy to the White House cannot be taken for granted. His overall lead had shrunk from 10.2 points in June to 7.1 on August 26, though a post-convention narrowing is par for the course. This is still three points better than Hillary Clinton did in the same period in 2016. But Mr Biden’s lead in the six battleground states has been tightening — he leads by just one point in North Carolina, two points in Arizona, three points in Florida and Pennsylvania, five points in Wisconsin, and six points in Michigan. Again, this may not tell us much, since Ms Clinton led by eight, seven, and five points in Michigan, Pennsylvania and Wisconsin but lost all three to Donald Trump. But this could mean that a Trump victory remains very much in play, and the Indian establishment needs to be prepared for it. Traditionally Republican administrations have been good for India — the nuclear deal, for instance, was signed under George W Bush’s presidency — but Mr Trump’s presidency cannot be said to have followed that pattern. The evidence of the past four years suggests that the “America First” platform translates into a somewhat unpredictable policy environment driven by the US president’s obsession with playing to his base.

Prime Minister Narendra Modi has gone the extra mile to woo Mr Trump — both leaders favour personal diplomacy as a negotiating style — by generously endorsing him at the Howdy Modi event in Houston in September last year and organising a lavish “Namaste Trump” extravaganza this February. Yet India has few gains to show for all the handholding, hugs and effusions of goodwill. Trade relations have been a major casualty with Mr Trump terminating, in March last year, India’s preferential trade (essentially duty-free) status for a range of products under the Generalised System of Preferences programme, impacting about $5.6 billion worth of Indian exports, mostly from small and medium enterprises. A trade deal, which was likely to address this issue, has proved elusive principally on access to agriproduct markets. At the same time, Mr Trump’s crackdown on immigration in general and his June executive order freezing access to H1B visas, topping months of warnings that the system would be overhauled to limit these permits, has hit the Indian IT industry at an inopportune moment, with the pandemic shrinking job opportunities. 

Bar the Trump administration’s forbearance on the changed status on Jammu & Kashmir, it is difficult to say that India has gained much quid pro quo from the relationship. In February, New Delhi signed on to buy over $3 billion of defence equipment from the US, the defence industry being a major Republican donor. In April, a phone call from Mr Trump to Mr Modi caused India to lift restrictions on exports of 26 pharmaceutical ingredients, many of which were needed to treat Covid-19 patient. The tone of the Republican national convention suggests that this trajectory of asymmetric diplomacy is unlikely to change. In the event of a Trump comeback, preparing for a more transactional relationship would be India’s best bet.