Modi should woo the Republicans

The Republican wins in the US midterms bring to mind the remarkable victories of the BJP last May. But a closer look shows that the Republican tsunami was even more pronounced than the Modi wave.

In the new US House of Representatives, the party will have a 61-seat majority, the most since World War II.

In the states, the party picked up three additional governors’ mansions for a total of 31 state houses.

So dominant is this position that as a proportion, it is akin to the BJP controlling 19 Indian States (currently the BJP controls seven).

The Republicans may end up with 54 seats in the senate, again well ahead of the Democrats, a feat unheard of in modern elections.

As the Democrats sift through exit polling data, their analysis will likely reveal that the Indian American diaspora roundly abandoned Obama.

It either voted Republican (or did not vote at all) in regions such as northern Virginia, Atlanta, Denver and Charlotte — home to large Indian communities.

This was also true of all the states where the governors’ races flipped — Illinois (Obama’s home state), Maryland and Massachusetts — and where Democrats have ruled for decades.

If this continues, it could have ominous consequences for the Democrats in 2016 when Hillary Clinton is likely to run for President. Indeed, initial reports are pointing to this tectonic shift already.

The National Review confirmed that there was a 21-point shift towards the Republicans from 2012 amongst Asians.

The magazine quoted Karthick Ramakrishnan, a University of California at Riverside political scientist: “Just as the Asian-American vote moved toward the Democratic party over the last two decades, we may be seeing the beginning of a trend where they are moving back closer toward the Republican party.”

Indians have historically been a key part of the Obama alliance although philosophically one would think that they would be more aligned with the GOP platform.

As the most successful ethnic group in the country, Indians are more religious, hold on to conservative ideals, believe in lower taxes, pursue expanded professional opportunities, support increases in legal immigration, and are much less dependent on government benefits.

An immediate casualty of the elections is the immigration Bill which passed the US senate in 2013.

It has not been brought up in the House until now. If no action is taken on the Bill before December 31, it quietly dies — and comprehensive immigration reform, in its current avatar, is doomed.

There would be winners and losers amongst Indians here, if that happens. Indian students would lose because one proposal would have exempted advanced degree-holders in science, technology, engineering and math (STEM) from current employment-based green card caps.

For the IT majors, the senate Bill was always a mixed bag. On the one side it would have helped by increasing the H-1B limit from 65,000 to 1,15,000, and establishing a market-based H-1B escalator, so that the cap could adjust up to 3,00,000 new H-1B visas.

But it would also have severely limited third-party site placement practices — an idea that is anathema to Indian IT majors. This is why many Indian IT majors quietly lobbied against the senate Bill.

This doesn’t mean all action on immigration is dead. Obama vowed in his post-election news conference that he would act unilaterally in the next few weeks to announce executive action.

Any such step would be technically temporary until a Congress-passed Bill becomes law at which time the new provisions would supersede the executive order.

But this could take a year or two — and benefits once doled out by executive action would be hard to withdraw. It is no surprise that the Republicans have warned Obama to “not poison the well” by going alone on immigration.

For India, this dramatic turnaround in Washington power presents an opportunity to build on the Prime Minister Narendra Modi’s recent visit. Philosophically again, the BJP has more in common with the Republican agenda — limited government, support for business and investment, emphasis on defence and trade — than the Democrats. The Modi government should begin to aggressively develop relationships with pro-business leaders in the senate, such as 2016 presidential hopeful Rand Paul and the newly elected David Perdue (former CEO of Reebok); and Congressman Paul Ryan and Fred Upton (chairman of the energy and commerce committee) in the House.

We already know how Modi’s outreach to Japan’s prime minister, Shinzo Abe, is beginning to pay dividends.

One area that Modi could exploit is energy sourcing. The US is brimming with new oil that companies are, by law, forbidden to export. The Republicans would be more likely to ease such restrictions.

Modi would do well to lock up US oil exports at preferential prices in return for not buying oil from Opec rogue states — a move that could bring stability to India’s huge oil import bill while strengthening America’s hand in West Asia.

The writer is the managing director of Rao Advisors LLC

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