The Trumps & India: Trade follows the flag
Despite Donald Trump Jr’s somewhat garbled protestations in Kolkata, the reverse of the “flag follows trade” saying is also true. Without necessarily admiring the senior Trump’s views and policies, this column has always held that India can’t go wrong with an American President who hopes to make money in this country. The claim that “the Trump Organisation has more business entities in India than in any other foreign country” — first advanced by the Washington Post and proudly repeated since then by India’s highlyflattered media — is reason enough for Narendra Modi to shape the relationship to this country’s benefit instead of being bowled over again by the attentions of yet another Western leader.
A more sensitive Prime Minister would have reasoned that India needs housing for the poor far more desperately than luxury apartments. But that is not something that a foreign businessman with no interest in India except its potential financial yield can be expected to appreciate. It must also be stressed that the Trump Organisation is probably not investing its own money in India. It is selling its brand at a huge profit to Indian promoters and developers (neither being the most respectable of professions in this country) who will cash in on its snob value for the aspiring newly rich. However, it is just possible that successful business relations abroad might free Indian resources for the neglected welfare responsibilities that should be the first priority of any caring government. P.V. Narasimha Rao justified inviting foreign capital with the argument that there would be “blood on the streets” if he didn’t provide housing, schools and hospitals for the poor.
Like his brother Eric, Donald is also a Trump Organisation executive vice-president. The two brothers are running the firm while their father is in the White House, adamant that the President is not connected with the business. The numerous deals the Trump Organisation has built up through intense marketing and negotiations over a decade cannot be finalised for the time being. Mr Trump Jr may have lost five or six other potential deals in India because of his decision not to take on new projects after his father became US President to avoid a conflict of interest. Asked if he would meet Mamata Banerjee or West Bengal’s finance minister, Amit Mitra, during this maiden trip to Kolkata (although he has been to India seven times), he replied: “Frankly, it is just easier for me to avoid it.”
No doubt Eric Trump was also right to claim in an article in Forbes magazine that there is a “clear separation of Church and State that we maintain” between the business and the President. But it stands to reason that a hard-headed billionaire businessman like President Trump will not take an unkindly view of a country that encourages his hotels, golf courses, resorts, spas, condominiums and wineries.
The hoardings in Haryana read “Trump has arrived. Have you?” In West Bengal, it is “Trump is redefining the skyline of Kolkata”. No doubt the legends in Maharashtra are equally ambitious for there are grand projects there too. They are what matters to India. Not President Trump’s Russian connection, his contortions on the Paris climate agreement, the belligerence towards Iran and North Korea, encouragement of Asian weapons sales, or attempts to drum up a military alliance against China. These positions are not in India’s interest. He has business operations in more than two dozen countries, including Canada, Dubai, Ireland, South Korea, Israel, Scotland, Uruguay, the Philippines, the Dominican Republic, Indonesia, Brazil and Turkey. In India, the Trump Organisation is “involved in at least 16 partnerships or corporations”.
The projects are in Kolkata, Mumbai, Pune and Gurgaon. The Trump Organisation has partnered Panchshil Realty in Pune. It tied up in 2014 with the Lodha Group to build a 78storey Trump Tower in Mumbai. Its partners in Kolkata, where it is building 137 ultra-luxury apartments, are the Unimark Group, RDB Group and Tribeca Developers. Some reports claim that 75 per cent of the flats have been already sold since the project was launched in mid-October. Others place it at a more modest 50 per cent. But with a starting price of `3.75 crores for a 2,500 sq ft unit (going up to `6 crores), one can be certain the buyers are among the movers and shakers of the Indian world. “We have been able to deliver the best of the best product here” (Mr Trump Jr said in Kolkata). Trump Towers must be the envy of other promoters who have been struggling for years to sell their luxury units.
Some of President Trump’s colleagues also value business opportunities in India. In 2006, Wilbur Ross, who is now US commerce secretary, established a $300 million fund and bought the textile company OMC India Ltd. Two years later he bought $80 million in convertible bonds issued by SpiceJet airline, which he later sold. President Trump’s treasury secretary, Steven Mnuchin, was earlier employed by Goldman Sachs, which is well-known in India and has provided support to renewable energy firm ReNew.
President Trump’s foreign relations have not been as strikingly successful as his business deals. He has rubbed up the wrong way leading British, German and Australian politicians. It may say something for his politics and political style that he seems to get on better with the rulers of the Philippines, Saudi Arabia and Israel than with liberal democrats. But it’s not India’s role to sit in moral judgment over the US President. India needs oil, technology and weapons as well as strategic support against terrorism. Perhaps in return India can concede some land and tax reforms but Mr Modi must know that a provocative four-nation alliance against China would be counter-productive.
President Trump’s foreign relations have not been as strikingly successful as his business deals. He has rubbed up the wrong way leading British, German and Australian politicians.