Editorial

Paradigm shift

| Updated on January 12, 2018

India should take cognisance of the new normal that is Donald Trump

Last week’s press conference of US President-elect Donald Trump was less than reassuring for those who believed that the responsibilities of office would have a moderating effect on his extreme positions. Trump came across as aggressive, in stark contrast to Barack Obama, who, in his farewell speech, yet again tried to warn the country against divisive currents. The reasons are, however, not far to seek. Perhaps never before has a US president-elect been a subject of such controversy. Trump is under fire for influencing the elections through Russian intelligence and cosying up to Russian President Vladimir Putin. His probable cabinet colleagues are under a cloud for conflict of interest issues. He was defensive, lashing out at adversaries, a victor playing the victim. Whether he is able to carry everyone along, only time can tell. The international community, the EU in particular, is apprehensive. Trump has not piped down on his anti-NATO rhetoric, or on his support for Brexit. He has also provoked China by saying that the ‘one-China policy’ was up for negotiation. While the US’ unprecedented tilt towards old adversary Russia may actually help salvage the situation in Syria, it has deep strategic and economic implications for the world at large — including India. Trump embodies what 2016 was all about — an unprecedented challenge to liberal, universalist values, to the idea of the world as a unified common market for labour and capital; and a rising suspicion of the intelligentsia, be it in the US, the UK or even India. It is notable that even this time’s Davos meet of global business leaders has taken note of this trend.

Back home, Trump is keen to ramp up protectionism. Whether the ploy to get manufacturing back to the US will work is an open question. Trump, however, showered praise on Ford and Fiat Chrysler for having announced their plans to expand and invest in America. He specifically lauded Ford’s decision to halt a billion-dollar plan to construct a production unit in Mexico and putting it up instead in the state of Michigan. He issued a veiled threat to General Motors to follow a similar path. This should concern India’s automotive sector as well as the Centre which is keen on FDI flows. India should also not take lightly Trump’s comments on bringing the pharma industry back to the US. He said as one of the largest buyers of drugs in the world, it will initiate a bidding process in order to save billions of dollars in a few years. This practice, he said, he will follow for all industries.

The era of export-oriented growth can be considered over. India’s IT sector is past its halcyon days; Trump’s ascendancy will lead to a squeeze on H1-B visas. Despite repeated pleas by Nasscom to the Centre to take up the issue with the US, such pressure is unlikely to work. Trump marks a paradigm shift, for better or for worse. For India, it cannot be business as usual — be it economic policy or foreign affairs.

Published on January 16, 2017

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