With just weeks to go, the search for the 45th President of the United States is getting increasingly tighter and fractious. 'India Global Business' evaluates the strengths and weaknesses of the two main candidates - Donald Trump and Hilary Clinton - to see what India has in store under a new US President. Traditionally, the 50 states vote either for the Republican or Democrat candidate largely on a set pattern based on the two parties' take on a host of issues that confront the world's most powerful country. This time around, the challenge posed by multi-billionaire businessman Donald Trump - the outsider - who first confounded everyone when he became the Republican candidate and has continued to befuddle his critics and political experts alike with his strong campaign, has added much spice to the election. Trump does not have a political legacy and lacks experience in fighting electoral battles. Yet, he has used his position as a rank outsider to question the prevailing political discourse and funnel the disenchantment among the people against the political “elites” as a whole. Pitted against a seasoned Hillary Clinton - a former First Lady and Secretary of State - the cacophony surrounding the campaign trail has often bordered on the bizarre. Even though it belongs to the other end of the planet, India has a lot at stake in the November 8 elections. The country enjoys an upper hand in bilateral trade and the growing proximity between the two nations since 2000 has helped India tackle some of its problems, including managing its troublesome neighbours China and Pakistan. The US can do much more but India must first find out where the two stand on issues that impact its interests. Indo-US trade: Who can take it to next level In terms of economy and trade, US plays a critical role for India. Any major step that alters the scenario in the States will have a significant impact in India. The US is the second-largest trade partner to India, next only to China, and bilateral trade between the two countries was $96.7 billion in 2013, up over 400 per cent from $23.9 billion in 2003. Of this, US exports to India were $35.7 billion and imports were $61 billion, producing a bilateral trade deficit of $25.4 billion in 2013 that itself grew from a deficit of $6.3 billion in 2003. The US stock of foreign direct investment (FDI) in India has also increased - over 600 per cent since 2003 - from $4.8 billion in to $28.4 billion in 2012. And while Indian investment in the US has experienced 1,400 per cent growth, this was on a low base of $350 million in 2002 and was only $5.2 billion in 2012. An important aspect of this two-way trade is in services, which grew 600 per cent since 2003, from $5.8 billion to $32.5 billion in 2013. This includes an increase in India's services exports to the US of over 900 per cent since 2003 - from $2 billion to over $19 billion in 2013 - and growth in US service exports to India of over 350 per cent from $3.7 billion in 2003 to almost $13.5 billion in 2013. Even though the US enjoys a services trade surplus with the rest of the world, with India its services trade deficit has been growing since 2006. It is this imbalance in trade both in goods and services that has featured on numerous occasions during the campaign trail of the two candidates. There is a not-so-insignificant chunk of America's population that feels aggrieved by job losses through outsourcing. India and China are the main culprits in popular perception. Trump's campaign has often focused on the bilateral trade mismatch and his attacks on many previous administration's free trade agreements (FTAs) have found support with the traditional American voter. "People are tired. They want to have strength. They don′t want to have trade deals where China has got a trade deficit of $505 billion a year; where we have trade deficits, massive trade deficits with Mexico, with Japan, with Vietnam, with India, with everybody, folks, with everybody," Trump had said at a crowded election rally in Atlanta, Georgia in June. “I mean, practically every country in the world when they do business with the US, it′s called let′s rip them off. It′s like we′re all the big, bad dummies. Those days are over if I win. Those days are over. They're over.”
It is still unclear how much or what exactly he will do should he become the next US President but based on the evidence of his campaign, his victory will not enthuse the average Indian investor or businessman. Despite the progress made in the last 10 years, there are significant opportunities for India and the US to deepen their bilateral trade and investment relationship. The growth in the last decade has been on a low base and seen in context with other countries, Indo-US ties do not look that impressive. America's goods trade with China, a country with a comparable population, was over $560 billion in 2013 - almost nine times its trade with India while with South Korea, a country whose GDP is 60 per cent that of India's, it had a similar level of goods trade in 2013. It is no wonder that Clinton is a more favoured candidate for those who mean business in India. On September 27, the day of the first Presidential debate, the Bombay Stock Exchange (BSE) registered an initial spurt enthused by Clinton drawing first blood against Trump. The Democrat candidate is a known entity in India, has visited the country many times and is generally pro-liberalisation. She also has the unequivocal backing of the small but, in some cases, powerful Indian American lobby that is also expected to have a significant presence in any future Democrat administration. There is little ambiguity in the minds of investors she would be better for Indo-US trade ties. “She helped lay the foundation to deepen the relationship between President Obama and Prime Minister Modi, to get an outcome at the Paris negotiations, and the ambitious clean energy agenda India has set,” says John Podesta, chairman of Clinton's campaign committee. “She will take relations with India to a new level and better economic and strategic ties will anchor the US in the region.” Next President & impact on H1-B visas The most contentious of all issues and one which has particular relevance to India in this Presidential elections is that of reforms in issuing non-immigrant H1-B visas for professionals in the US. Every year, the country issues 65,000 such visas and India's $146-billion IT industry is a major beneficiary of it. There has been a raging debate for reforms on issuing these visas that has divided the country down the middle.
While one section which includes Hillary Clinton wants to raise the number of visas every year by three times, citing the benefits of professionals coming in from around the world and contributing to the US economy, the other section that has Trump as the ring-master severely opposes it. The Republican candidate has repeatedly accused countries like India, China, Mexico, Philippines and Vietnam for stealing jobs from the US, playing to the underlying discomfort with outsourcing of a section of the US population. “The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult for poor and working class Americans - including immigrants themselves and their children - to earn a middle class wage,” says Trump's official campaign website on his immigration plan in August 2015. “We need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office not USCIS [US Citizenship and Immigration Services].” Some of the assertions cannot be simply brushed under the carpet as protectionism. Skilled professionals in the US have often alleged that companies have used H1-B visas to bring skilled but cheap labour from abroad even when such professionals were available. Trump has harped on this issue promising to raise the prevailing wage for H1-B visa professionals and forcing companies to look for talent outside only if they do not get it in US. As the campaign has unfolded and the emotive issue has taken centrestage, even Hillary Clinton has felt the pressure and had to sound conciliatory on a few occasions. In July, Clinton lashed out at replacement of US IT workers with H1-B visa workers, referring to workers at Disney where US citizens had to ironically train their foreign replacements as part of their severance package. “The many stories of people training their replacements from some foreign country are heartbreaking, and it is obviously a cost-cutting measure to be able to pay people less than what you would pay an American worker,” she said. “It's really hard when you are the one who has lost the job, when you are at Disney in Orlando and you are told to train your successors.” The merits of a more liberalised visa regime are also similarly loaded. Jayshree Sengupta, senior fellow at Observer Research Foundation, says the truth is the average American has greatly benefited from trade with China and outsourcing services from India have helped save Americans millions of dollars. “Americans would have to pay much more for services currently outsourced to India compared to what they would pay if they were to be rendered at home by Americans, simply because wages are much lower in India,” she says. “Similarly, China's supply of cheap goods to US has kept its economy afloat and Americans have been able to enjoy a high standard of living and low inflation.” As is his nature, Trump has also flip-flopped on the topic more than once. During the Republican debate in March, Trump admitted he was changing his stance on the visa issue and presented a starkly different view to what was posted on his campaign website in August 2015 (quoted above).
People are tired. They want to have strength. They don't want to have trade deals where China has got a trade deficit of $505 billion a year; where we have trade deficits, massive trade deficits with Mexico, with Japan, with Vietnam, with India, with everybody, folks, with everybody.-Donald Trump, Candidate for President of the United States