How Joe Biden Presidency Might Impact the India INC.?

Recently, I read an interesting article about how Indians are more American, in a sense, than Americans themselves. While the article explored the perceptual transformation of ideas; Chinese Whisper for perceptions and ideas if you will, the title, obviously a click bait, however, sent me down an interesting rabbit hole, where I wondered about economies and civilisations, a sort of enlightenment if you will, I realised I emerged still not caring who wins the US elections.

But, turns out its important and stuff, so here, in this space, we shall discuss few of the impacts of our orange meme-generator leaving and being replaced by JoeBama meme generator. With much less attempted-pretentiousness. Let’s start with why orange was so sus in the first place.

What was the Situation under Donald Trump?

For a person who literally snatched the votes of Indo-American voters with the slogan ‘Abki Baar Trump Sarkar’, Mr. Donald Trump wasn’t really all that great for anyone, in general. Except for probably 9GaG and Instagram.

But that is especially true for India. Let’s start where most things start, money and stuff. You see, for the past two decades, all the presidents that have served that White House have commonly agreed on one common thing, that a strengthened Indo-US trade relations is a mutually beneficial symbiotic relationship that is likely to serve in favour of both, with the advent of this brand new global economy.

Things changed however, when at the helm was a whiny man-child whose entire notion was ‘America First’. In his four year term, Trump managed to raise tariffs for pretty much all commodities in our $17.3 Billion net exports (2020, so far) , which obviously acts as a negative incentive for these trade deals for all the parties involved. This coupled with the fact that net exports have been decreasing from $24.3 to $23.3 Billion between the period of 2016 and 2019, is not really a good sign. You see, prior to his term, India was enjoying a preferential treatment of sorts, which encompassed everything from regarding India different from other South-Asian economies to trade licenses and deals. This was not only pulled, India Inc. was kind of forced into buying oil at more expensive prices from US instead of Iran and Venezuela. Again, not nice.

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But all of this for the activity. Let’s talk dormancy. One of the founding principles of all American principles is democratic capitalism, or opposition to communism. In Trump’s term, specially, a ton of human rights issues like internet and communication ban in Kashmir to pulling of CAA occurred, while receiving no solid consequential condemn from US. This is kind of a highlighting factor, and will come much more in play during Biden presidency than you might realise. Hopefully. Let’s look at what changes, again starting with money and stuff.

Joe Biden Presidency: Trade, Money and Stuff

One of the major criticism of Trump presidency was his reduction of numbers in immigration allowance, to US. In a much larger sense, with the wall against Mexicans, increased tariffs and decreased H1B visas, there was an attempt to create a self-sustainable closed economy. However, it just cannot work today. Not in the times of specialisations and cheaper overseas productions.

Mr. Joe Biden has always been an advocate of stronger economic relationships between India and China, so much so that he himself guided the bills that established the current civil nuclear deal post Bush presidency.

Here’s what it means. It is very likely, that the escalated relationships between US and Middle East won’t escalate further, if not calm down. This means India can go back to trading with these countries for things like oil and rice. This is especially essential because while this year’s budget, despite then planned massive LIC IPO, still had a deficit of 3.5%. I mean Governments don’t buy barrels directly, but companies do, profits, GDP, taxes, treasury, you get the idea.

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It is also likely that Biden would restore Generalised System of Preferences, which was scraped by Trump. Basically, under GSP, businesses in India get export and import duty benefits.

India, on the other hand, within the structure of these deals, is said to reciprocate in the following ways. The first, it is to reduce tariff duties for auto-mobile exporters like Harley Davidson, apart from providing a wider access to US towards India’s agricultural commodities like cherries. Moreover, it is said to reduce certain inbound tariffs on stuff like medical equipment like stents and implants, making it attractive for international pharmaceutical companies like Abbot. Moreover, there is talk of America slashing tariffs on Indian Steel and Aluminium in return of slashing tariffs for American goods like walnuts and apples.

Further, Biden is set to liberalise the immigration policies, a boon to IT sector in India, the primary H1B visa applicants, apart from also supporting family based immigration, simply increasing the number of visas offered and also bringing about reforms within the limits of skill and employment based Visas.

Joe Biden Presidency: Politics & Human Rights

Biden’s win marks a historic event, Kamala Harris, the first woman of colour to be elected Vice-President. Biden-Harris’s promised and projected policies involved a heavy emphasis on improving focus on things like climate change and human rights. This is good, because while Trump has usually turned the other way, regarding the decreasing democratic deficit in India, Harris is unlikely to do so, given her track record with such issues.

Besides, one of the central focus would be US-China relationship. China has been facing a lot of backlash throughout the globe for its ineffective communist policies. While Trump would promptly boast that Biden would be soft on China, it is not really an option anymore. If and when, however, Biden does choose to respond, it would be hypocritical to be accusing China of anti-democratic behaviour and choosing to turn the other way with India’s similar behaviour with CAA and Kashmir. I mean, India is no Saudi Arabia. Oil and stuff.

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Talking of China, let’s talk military shall we?

The Obama-Biden presidency declared India as one of the major defense partners, with Biden going so far as to say that he saw a completely developed dynamic between US and India by 2020 (back in 2006). It is easy to guess that he will continue that.

At the end of Obama administration, India and USA also entered into a Logistics Exchange Memorandum of Association (LEMOA). This basically makes these countries allies. The memorandum emcompasses a lot of things, including a allowance to US military troops to replenish their supplies and equipment at Indian military bases, and vice versa, all of which would be reimbursed later.

Impact of United States Elections & Its Results on India

This might be a little opinionated, but with such obvious impact of these elections on Indian economy, sometimes, we are forced to consider the sheer behavioral attributes of candidates, an important process in any democracy, I believe. While Donald Trump’s campaign usually consisted of random outbursts on controversial topics with a short perception overturn window, Biden, in a way tailored his campaign around that, keeping it low-key and calm, allowing in a way, to let Donald Trump take himself out.

Trump was all set to gain victory, so to say, ending his term with a considerable surplus with the US treasury before COVID hit, a reality check in many aspects. With a much more calmer, contemplating presence, it is intriguing, to say the least, how long Biden would take to wipe the consequences of Trump’s short term non-sustainable policies, and how he emerges a victor in the most literal sense of the word, at the end.

For now, let’s wait and watch out for the real results and its impact on the US economy and in other countries as well.

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