Indian exceptionalism over as Trump ends US special treatment consensus

Is United States (US) President Donald Trump’s crackdown on H-1Bs only the latest step in a sustained campaign that targets India, in particular? After all, more than two-thirds of H-1Bs are handed out to Indians, and it is Indian companies that are among this visa’s biggest beneficiaries. 

Perhaps. From one point of view, Mr Trump’s actions, taken together, might indeed look like he is singling us out. Indian goods exports have the highest cumulative tariff rate so far, at 50 per cent. Earlier this year, a remittance tax was imposed, the burden of which might disproportionately be borne by those of Indian origin in the US. The US’ relations with Pakistan appear to be on the upswing, without any objective reason why this should be so. Multiple members of Mr Trump’s Cabinet have gone out of their way to needle India. 

And while the H-1B decision might have hogged the headlines in the past few days, two other developments occurred in parallel. Republican senators introduced a Bill targeting imports of Indian shrimp in particular for 40 per cent tariffs. And the US administration decided to suspend an India-specific waiver to the Iran Freedom and Counter-Proliferation Act, which was being used to ensure that Chabahar port could be built without the threat of sanctions. This waiver was originally granted in 2018, during Mr Trump’s first term, and is an indication of how the vibes have changed since then. 

It’s worth noting, however, that there is considerably more that the US could do. For example, the full provisions of the Countering America’s Adversaries Through Sanctions Act, or  Caatsa , might be applied to India for its purchase of the Russian-made S-400 surface-to-air missile system — particularly if New Delhi indicates that it does not intend to buy any more major American weapons platforms in the immediate future. 

Many Republicans want to go further than Mr Trump already has. There is the looming threat of tariffs or other charges on Indian services exports. White House Trade Advisor Peter Navarro has suggested that outsourcing should receive similar policy treatment to goods imports. There is some support on the Hill for another Republican proposal that would impose a 25 per cent tax on “any money paid by a US company or taxpayer to a foreign person whose work benefits consumers in the United States”. Any of these passing would only increase the sense that India is, for some reason, a particular bother for Mr Trump or his party. 

There is another, less solipsistic way of looking at things. The fact is that many countries around the world, if they examine Trump administration policies that affect them, believe that their nation is being specifically targeted. Mr Trump is about to host President Recep Tayyip Erdogan of Turkey — but many of the latter’s supporters believe, like many Indians, that the White House is singling out Turkish interests. They too can stitch together a narrative: Turkey has been excluded from the F-35 project, for example, and has been denied the Caatsa exemption that India received. Similar patterns are being discerned by Brazilians, who also have been targeted with 50 per cent tariffs, and even Koreans, whose engineers were recently deported from the US in handcuffs. 

Can India legitimately claim that its treatment is different from what these others have been receiving? Perhaps. But the real difference maybe lies elsewhere, in that India has further to fall than most other nations. From a pedestal, the ground is further away. The fact is that there has been, over the past two decades, a bipartisan consensus in Washington that India should be treated with special care. Just taking away the various measures that gave voice to that consensus means that there are many more things a US administration could do against Indian interests than to Brazil or Turkey. 

While the thaw between India and the US began under President Bill Clinton, the special treatment doctrine is most associated with George W Bush. The point behind the nuclear deal between Mr Bush and then Prime Minister Manmohan Singh was to establish a precedent for Indian exceptionalism. Post-deal, India could and would expect to be treated differently from all other nations. And this assumption is now embodied in how we approach the US. It is why, for example, India remains the only country to assume the Trump administration would accept a trade offer that does not involve zero tariffs on US manufactures. The EU ended tariffs on industrial goods imports from the US; Vietnam dropped all tariffs, as did Malaysia, Japan, Indonesia, Thailand, and several Latin American countries. India, secure in its exceptionalism, did not feel the need to make a similar promise. Seen with that context, is it entirely surprising that Mr Trump assigned us a much higher tariff rate than others? 

This confidence in exceptional treatment was apparently felt by Indian companies as well. Outsourcers operating in the US assumed they were so vital that they ignored growing anger in the US over accusations that they were discriminating in favour of Indian employees. Cognizant is appealing a decision that it engaged in a pattern of intentional discrimination against non-Indian employees; various employment-law cases against Wipro, Tata Consultancy Services, and others are all moving through the court system, and there are open investigations against the latter by the US Equal Employment Opportunity Commission. US officials have long complained that the dominance of the staffing or outsourcing companies over the H-1B lottery is artificial, and distorts its original purpose. 

It can feel like both India and Indian IT are being targeted by an administration that hates them in particular. But it might also be that the current US administration simply dislikes all “foreigners” — and India received so much exceptional treatment that removing a significant fraction of these can appear like a targeted campaign. 

Or perhaps Mr Trump has indeed taken against India specifically. We will know for certain in the coming months. But, even if he has not, one thing is certain: The decades in which India and Indians could assume they would receive special treatment from America have passed. Indian exceptionalism is over — at least in the US. We should perhaps look elsewhere for such privileges — to Europe, for example, which this week launched a new India-specific policy that looks a lot like what the consensus in the US used to be.