A New Don

India’s relationship with the United States enters an era of uncertainty

Trump’s promise to clamp down on the H1-B visa programme has raised significant concerns in the Indian IT industry. julie dermansky / corbis / getty images
Elections 2024
01 February, 2017

Over the past two decades, relations between India and the United States have improved quite dramatically. There have been some vicissitudes, such as those over India’s stance on global trade negotiations and legal issues surrounding the US-India civilian nuclear agreement. But the progress is clear by most measures, such as the volume of trade—while the two countries traded goods worth $9.5 billion in 1996, last year that figure stood at $62.1 billion. Various intergovernmental dialogues, in areas such as education, energy and counterterrorism, also point to the fact that the relationship is now on reasonably secure footing. Donald Trump’s assumption of the US presidency, however, has generated several questions, if not actual misgivings, about the future of these ties.

Even before formally assuming office, Trump upended a series of long-established precedents that have served as guiding principles in US foreign policy. For example, he openly questioned the US commitment to the North Atlantic Treaty Organization, raised doubts about the country’s adherence to the “One China” policy, suggested that he may oversee a drastic expansion of the US nuclear arsenal and even cast doubts on the utility of the United Nations Security Council in the wake of a controversial vote on Israeli settlements. These statements and the stances they embody have rattled much of the US foreign policy establishment, not to mention key allies and some adversaries.

Given Trump’s apparent willingness to move away from a number of key current facets of US foreign policy, a pressing question is how he intends to deal with India. But since he has yet to spell out an overarching framework for his foreign policy, in seeking answers, one is forced to search his public pronouncements for clues.

It is already evident that if Trump is sincere about his stated preferences, tensions with India are bound to arise. Take, for example, his railing against the issuance of H1-B visas, which allow US companies to hire foreign workers for limited periods of time, to perform specialised tasks. On occasion, past US administrations also made noises about restricting these visas. But owing to the needs of US corporations, they rarely, if ever, imposed any meaningful constraints. At most, the visa fees associated with the programme were raised.

Trump fought the election on a blatantly populist platform. In a campaign promise on his website he vowed to “end forever the use of the H1-B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program.” Trump reiterated his commitment to restricting H1-Bs after his victory, claiming that the visa was subject to “widespread, rampant abuse.” More recently, in January, two members of the House of Representatives—Darell Issa, a Republican and a Trump supporter, and Scott Peters, a Democrat—reintroduced an earlier bill that would significantly tighten restrictions on the H1-B programme. Among its other provisions, the bill proposes to make it more difficult for companies that rely heavily on H1-B visas to bypass some of the legal requirements of applying for the visas—by making it more expensive for such companies to hire workers under it, and revoking a rule that granted an exemption from those requirements when hiring individuals with Master’s degrees.

The proposed legislation, if passed, could have adverse consequences for Indian outsourcing companies such as Infosys and Wipro, which earn significant revenue by sending staffers to work for clients in the United States. Azim Premji, the chairman of Wipro, and Vishal Sikka, the CEO of Infosys, both raised concerns of difficult times ahead in letters they sent to their staff members early in the new year. Sikka specifically cited the US presidential election as an aspect of the “strange year gone by.” Policymakers in New Delhi are bound to be concerned about the economic impact of a drastic cut in the earnings of prominent outsourcing firms. These earnings are not only an important source of profits for the companies, but also benefit communities within India in the form of remittances that workers send home.

Trump’s rants about undocumented immigrants, though mostly directed against Mexicans and people from Muslim-majority nations, are another cause for worry. The majority of people of Indian origin in the United States are there through legal means; however, according to the Pew Research Center, undocumented Indians form the fastest growing undocumented community among all ethnicities. Pew’s data put the number of undocumented Indians in the United States at 500,000, as of 2014; these individuals are among those who stand to face the most persecution under the upcoming administration. Trump’s periodic tirades about illegal immigration could also affect those Indians who are documented, by stoking existing hostility towards non-white immigrants, especially among poor, white communities, many of whom have not benefitted from globalisation. The rise of such ill will could easily impact the hitherto very influential Indian diaspora community. Faced with such animosity, they may seek to withdraw from the public arena, and thereby lose their growing voice in the foreign policy realm in general, and Indo-US relations in particular.

Another thing that could spell trouble for India-US relations is Trump’s insistence on bringing back industrial jobs to the United States, and his relentless threats to companies that outsource manufacturing abroad. Even though India is hardly comparable to Mexico or China as a destination for US manufacturing jobs, as a Harvard Business Review article notes, some American corporations, such as General Electric, Cummins (which makes engines, among other products) and the healthcare company Abbott, do have plants in the country. With Prime Minister Narendra Modi promoting his own initiative to fuel industrial growth under the “Make in India” campaign, the two sides may well find themselves at odds if Trump does carry through his promises.

Defence purchases form another key aspect of the trade relationship between the two countries. India’s military expenditure has grown swiftly over the past decade, and it is now the fourth largest military spender in the world. Between 2012 and 2015, India signed deals worth around $4 billion with the United States—second in worth only to those it signed with Russia—making it a significant customer for the US military-industrial complex, and a potential creator of thousands of jobs.

Trump’s statements may have raised concerns, but it is also possible to infer that his presidency may not be inimical to India’s interests after all. It is already evident, for example, that Trump has little love for China. He has charged the country with currency manipulation, and has also railed against the vast trade surplus that it has enjoyed vis-à-vis the United States. More to the point, he has openly questioned the US’s “One China” policy, which officially recognises only the People’s Republic of China, and not the Republic of China, also known as Taiwan. Trump spoke to the president of Taiwan over the phone immediately after his victory, and also remained noncommittal in interviews about his plans for the policy, triggering alarm in Beijing.

Trump’s intransigence towards China suggests that he might continue the same policies that the Obama administration embraced towards India in its second term. During these years, the two sides carefully built upon limited past efforts to forge the beginnings of a viable strategic partnership. If Trump does view China as a strategic and economic competitor, he will have every reason to continue firming up the security and defence partnership with India. After all, barring Japan and a distant Australia, few countries in the Asia-Pacific region with significant economic and political power have demonstrated much willingness to stand up to the growing assertiveness of China. India, for its part, has been home to the Tibetan government-in-exile, and allowed the Dalai Lama to visit the state of Arunachal Pradesh, to which China claims a territorial right. India has also offered to sell missiles to Vietnam, another antagonist of China. If Indian statespersons evince a willingness to continue the policies that they pursued with the Obama administration, there is little reason to believe that the emerging US-India security partnership will run into troubled waters. Indeed, the recent visits to the United States of two key Indian foreign and security policy officials—the national security adviser, Ajit Doval, and the foreign secretary, Subrahmanyam Jaishankar—both suggest that policy continuity is indeed in the offing.

With regard to the fraught India-Pakistan relationship, one that has huge significance for Indian foreign and security policy, there is little indication of Trump’s position apart from his phone call at the end of November to the Pakistani premier Nawaz Sharif. But the sheer vacuity of the conversation, in which, according to a Pakistan government press release, he heaped lavish praise on the country, suggests that his remarks can hardly be seen as serious indicators of policy intentions.

There are other reasons to doubt that Trump intends to cosy up to Pakistan. Chief among them is his choice of Michael Flynn as his national security advisor. Flynn is a retired army officer with considerable experience in dealing with Pakistan while serving in Afghanistan. Though news reports have alleged that he shared classified information with Pakistan, his broader stand towards the country might be more clearly discerned from his statements describing Islam as a “cancer” and the Islamic world as an “epic failure.” In light of such sentiments, it is difficult to imagine that he would be especially well-disposed towards Pakistan—an avowedly Muslim state, and one that has long acted against the strategic interests of the US in Afghanistan, all the while professing to be a staunch US ally.

It remains to be seen how Trump handles the fraught issue of his very substantial business interests in India. According to the Washington Post, he is “involved in at least 16 partnerships or corporations” in the country, accounting for “more business ventures than in any other foreign nation or territory.” Just prior to his inauguration, he categorically refused to divest himself of his vast real-estate ventures both at home and abroad.

Thus, from what indications Trump has given so far, it is fair to assume that in some areas, unless they are very deftly handled in New Delhi, India and the United States could find themselves in opposition. However, in those realms related to key Indian strategic concerns, fears about the future course of India-US relations under a Trump presidency, though understandable, may well prove to be misplaced.

Correction: The print version of this story stated that the bill to tighten the H-1B visa programme proposed to raise the minimum salary for workers hired under the programme and revoke a provision that allowed 20,000 foreign nationals “in excess of the annual H-1B quota to avail of the visa if they hold a Master's degree.” In fact, the bill proposed to target specific categories of companies that relied heavily on H-1B visas, and sought to make it more difficult for them to bypass certain procedural requirements of applying for the visas. The Caravan regrets the error.