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India cheers Biden win, but there may be clouds too

(ATF) With Americans electing a new president and foreign leaders set to rejig relations with the US, analysts in India are also reassessing how ties will shape up with a Democrat at the helm. 

President Donald Trump and Prime Minister Narendra Modi, after all, invested heavily in their personal relationship over the past four years, while Republicans also have a history of being more supportive of India and the country’s status as the world’s largest democracy.

The Democrats have often been concerned about religious intolerance in India, a lack of religious freedom, as well human rights issues.

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Yet experts believe there is no reason that Joe Biden will undo the efforts of previous US presidents to deepen ties with India. Some say a Biden administration is likely to strengthen bilateral ties even further than the outgoing President Donald Trump did.

Dalal Street – a synonym for Indian stock markets and its financial sector – however, seems to be loving the Biden win.

Much hope seems to be pinned on the fact that Biden was one of the key advocates of strengthening the Indo-US partnership, even before he became Vice President in the Barack Obama administration; and the fact that Biden understands the need to control the Covid pandemic before any sustainable economic recovery can take place – in the US or elsewhere.

Enhancing economic ties

“With the election of Joe Biden as President and Kamala Harris as Vice President, we are looking forward to engaging with the administration’s leadership to promote post- pandemic economic stability, business collaboration, our shared democratic values and increased people-to-people ties that have defined the special India-US relationship,” Uday Kotak, President of the premier industry body, The Confederation of Indian Industry (CII), said.

With rising trade and investment ties between the two countries, the health of both economies is inextricably linked, the CII said, and will tie the two largest democracies together at a “critical time”.

The Confederation is eager to reinvigorate their bilateral economic agenda – to boost economic growth, enhance job creation, support small business and enable cooperation in movement of professionals.

The CII says that prior to the economic disruption caused by Covid-19, bilateral trade peaked at nearly $150 billion in 2019.

It hopes that under Biden, trade with India will rise to a much higher level – “to the shared goal of $500 billion through a new era of revitalised economic cooperation.” 

“The key sectors to watch for enhanced business cooperation will be energy and the green economy, defence and manufacturing, especially providing a boost to small business cooperation, as well as pharmaceuticals and healthcare – all driven by India and the US’ new age businesses and disruptive innovation and technologies,” CII said.

Good for IT workers, students

Under Donald Trump, the US tightened its immigration policy and visa rules, which proved a sore point for the $191-billion IT industry and Indian students, who generally see the US as a top destination for such work.

For the IT sector – which projects revenue growth of 7.7% this year, and adding a further 200,000 jobs to its overall workforce of 4.36 million – Biden’s approach and policies on America’s H-1B work visas will be a big thing.

In June, during the Covid-19 pandemic, US President Donald Trump banned the entry into the US of workers in several key non-immigrant visa categories, including H-1B, until the end of the year, arguing that they would take American jobs at a time when jobs were employment was tight.

The Trump administration’s restrictive and erratic visa rules have been a concern for the nearly 11 million Indian students who go to the US every year to study, some of whom work and aspire to a better life there.

Biden’s stated plan to increase the number of visas for high-skilled workers, and eliminating the limit on employment-based visas by country, would benefit them as well, experts say.

The Biden win has come as a relief for stock markets also that lived with nearly four years of uncertainty, due to Donald Trump’s protectionist stance.

At the close of trading on Monday, both the Sensex and NIFTY benchmark indices rallied to record highs, supported mostly by the belief that Biden’s victory will instill confidence among investors and greatly reduce policy uncertainty.

Tougher on rights, Kashmir

But foreign policy experts say feel Biden is likely to have his own style and nuances.

They expect that the Biden-Harris team will be tougher on India given that both Biden and Harris have been critical of the Modi government’s policies in Kashmir as well as the contentious Citizenship Amendment Act. 

Biden has been “disappointed by the measures that the Government of India has taken with the implementation and aftermath of the National Register of Citizens in Assam and the passage of the Citizenship (Amendment) Act into law”, the Biden campaign policy paper said.

Modi’s citizenship law made life more difficult for Muslims in the country, according to critics, while Harris reportedly did not approve of India’s tightened control over Kashmir, the Muslim-majority state in the north that has been a source of conflict, since Partition with Pakistan more than 70 years ago.

People who know her well expect Harris to speak up more.

Most analysts believe that human rights overall will probably get more attention under a Biden administration, which might make Modi nervous.

Still, according to the US-India Business Council (USIBC) in Washington, bilateral ties have continued to grow and the partnership has continued to deepen over the past two decades under both Democratic and Republican presidents.

“President-elect Biden brings decades of experience advancing US-India ties and played a key role forging the US-India Strategic Partnership in the Obama Administration,” a USIBC statement said.

So, under Biden’s leadership, a continued bipartisan focus on India and a broad-based approach to India and the Indo-Pacific is expected, an embrace that would touch on strategic, security, and economic issues, alongside climate, health, education, science and technology. 

“The US-India Business Council looks forward to working with the Biden-Harris Administration to help the US-India economic partnership achieve its full potential and bring opportunity to the citizens of both countries,” the statement said.

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Indrajit Basu

Indrajit Basu is an India-based correspondent for Asia Financial and wears two hats: journalist and researcher (equity). Before joining AF he reported on business, finance, technology, wealth management, and current affairs for China Daily, SCMP, UPI, India Today Group, Indian Express Group, and many more. He is also an award-winning researcher. If he didn't have to pay bills, he would be a wanderer.


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