‘Protectionism fears remain, but US-India collaboration to continue’

Indian industry is very optimistic about future of India-US relation under President Trump.

NEW DELHI: With Donald Trump taking over the reins of the US, industry stakeholders in India and the government feel that the fears of protectionism and curbs on H1B visas will remain, but that the US will continue its financial and technological collaboration with India.

“We believe that US will continue to support global growth with financial and technological collaborations and investments,” Finance Secretary Ashok Lavasa told IANS. “We hope to build strong relationship between two dynamic democracies for the mutual benefit of the two biggest economies for the well being and prosperity of its people,” Lavasa added.

“The focus of the new regime in the US is clear and they will be looking inwards. Not much of globalisation is expected. They will have the preference and support to their own people which is natural. Indian Industries have to reinvent itself. Indian industries have to take the opportunity in terms of goods and services, investing in the US,” Sunil Kanoria, President, Assocham and Vice Chairman Srei Infrastructure Finance Limited told IANS.

“Apprehensions over possible negative impact on India’s IT industry is nothing but exaggeration. Indian IT professionals are known world over for their expertise in providing affordable IT products and solutions and the same has been acknowledged globally,” D.S. Rawat, Secretary General of industry chamber Assocham, told IANS.

However, industry chamber Federation of Indian Chambers of Commerce and Industry (FICCI) said Indian industry is very optimistic about the incoming administration under President Trump and future of India-US relations under the incoming new US administration.

“The optimism about President Trump stems from the fact that he promises major tax cuts and reforms, which may instil the US back on a 3-4 per cent growth path, reviving not only the US economy but boosting the global economy,” the chamber added.

State Bank of India chief economist Soumya Kanti Ghosh felt that the US will go for some sort of fiscal expansion - through increased infrastructure spending or tax cuts - which will lead to some capital outflow from India.

“If the US goes for fiscal expansion then countries like India will be at a disadvantage because there will be capital outflow from India,” Ghosh told IANS.

“Protectionist trend is another thing that India is fearful about. It could harm the developing economies more than the developed economies. It could be a drag on the developing economies. Lower growth in India-US trade could be problematic for India,” he added.

The worst fear is the effect on Indian IT industry in terms of curbs on H1B visas as promised by Trump. The stakeholders, however, felt that the issue has always been there and the apprehension could turn out to be an exaggeration.