The Houston event with Indian PM Modi and POTUS Trump displaying their amiability is definitely going to play a significant role in building a road for future relationships that both nations plan to achieve, but its the US that stands to gain more.
The “Howdy Modi” event gained worldwide attraction and later the amiability among the two global leaders at the NRG Stadium in Houston on 22nd September was unprecedented and historic. Both the leaders showered praise at each other. In the end, they held hands and walked around the stadium for an apparent victory lap.
Indian Prime Minister Modi and his US counterpart Trump addressed an audience of over 50,000 Indian Americans. 50,000 of Trump’s prospective vote bank and support in the upcoming US elections. Indian PM Modi gave his total support to President Trump in front of an emotional NRI crowd. He concluded it with an anglicized version of his own election tagline from 2019: “Agli Baar, Trump Sarkar!”.
Their chemistry was not just mercurial but almost unprecedented in the way the leaders of the world’s two largest democracies ran the show.
It drew attention from across the globe and relentless media coverage followed. Consequently, the two leaders announced advancements in defense and energy ties between the two nations. But apart from what’s on the face and in the mainstream, there are a number of other facets to this growing affinity between the Indian PM and POTUS.
What President Donald Trump stands to gain?
Election Agenda for Trump 2020
When PM Modi came back in power with an insurmountable majority in 2019, his persona stayed unmatched and factored in majorly for the BJP government’s historic win. Now with Trump set for re-election in 2020, the POTUS has already kicked off his campaign.
The Howdy Modi event in Houston worked out from President Trump in more than one way. It created an allure towards him in the Indian diaspora in the US soil which whole-heartedly supports the Indian Prime Minister.
Significant financial prowess of the Indian Diaspora
The population of Indo-Americans in the US is around 2.4 million. Furthermore, among the median household income in the US, they are the most successful at $107,000, i.e. twice the size of American-born households (Trump’s main vote bank).
NRIs also hold the upper echelons of the societies in many American cities. The particular group is majorly enrolled in higher education, employed in management, business, science.
In the 2016 elections, more than 65% of the Indian Americans voted for the Democratic candidate Hillary Clinton.
With the immense cultural and financial capital at the disposal of the NRI community in the US, their involvement in politics is where Trump wants to turn the tables on the long list of Democrat hopefuls. This presents the Indian diaspora in the US as a tricky but crucial target if Trump wants to get re-elected.
Social Media Gains: Abki Baar Trump Sarkar
Social media platforms have become of great importance in today’s political elections. Platforms like Twitter and Facebook proved substantial in the success proliferation of Indian PM Modi’s narrative in 2014 and 2019. Similarly, in 2016, Trump spent vast amounts to woo young Americans on social media platforms.
In Modi’s tenure as the Indian PM, NRI support for him has been big. Furthermore, social media has been the channel from where it is displayed by Indians overseas (apart from PM Modi’s foreign rendezvous). Modi is a champion among the NRI population voicing out their opinion via social media.
Therefore, his presence and active support online will help Trump make further ground in the Indian vote bank. During his speech at the Houston event, the Indian PM gave Trump perhaps the best election slogan “Abki bar Trump Sarkar.” This is exactly same to the Indian PM’s 2019 winning slogan of “Abki bar Modi Sarkar”, which was big among NRIs too.
Trump’s Attempts to woo the Indian Diaspora in 2016
Even during the 2016 election campaign, Trump visited a Bollywood themed charity event organized by the Republican Hindu Coalition group. There, he outrightly told the crowd that India and the US would be “best friends” and he is a big fan of Hindus and a big fan of India.
Although the right-wing Hindus in the US do have a favoured politico face that’s a Democrat, a number of them firmly supported Trump in 2016 elections.
About financial gains? Trump’s investments in India
In a June 2016 report from the Economic Times, India was the $3.7 billion Trump Organization’s second-largest market outside North America.
Trump Organization entered the Indian market targeting real estate in 2013. Thereafter, the company finalized five commercial and residential projects in India through tie-ups with Indian partners, namely Lodha Group, Panchshil Realty, M3M, Tribeca, Unimark, and IREO The combined revenue potential of these projects is estimated at $1.5 billion.
As part of the tie-ups, these partners will build uber-luxury homes in India. Trump organization will charge a 40% premium for its brand name, as part of the deals. So, the real estate properties under Trump’s brand name are Panchshil Reality- Trump Towers in Pune, Lodha Group- Trump Towers in Mumbai, M3M- Trump Residential Complex in Gurgaon, IREO- Trump Tower in Gurugram, and Unimark Group- Trump Tower in Kolkata.
What the United States of America stands to gain?
Countering China’s growing economic and diplomatic influence
The ongoing trade war between the US and China has become Trump’s biggest challenge. Moreover, the US’ struggle to maintain supremacy over the rising soft power of China is a conflict that started a decade ago. Thus, the US sees India as a partner which can strategically counter China and endorse the US plans to gain a foothold in the Indo-Pacific as well as the South Asian regions where China is gradually increasing its influence.
Furthermore, India has the second-largest population in the world. As a result, this makes India the second-largest consumer of many goods and products. The trade war is now compelling US companies to disinvest in China and choose a better option for foreign bases. With its similarly cheap human resource, ineffectual labour laws, and now attractive foreign investment policies, India is quickly emerging as the preferred next destination for US companies to invest and set up bases.
US Investment and Trade with India in Numbers
The India-US bilateral trade in 2018 reached to $142.1 billion in goods and services. The US exports $58.9 billion to India. Likewise, $83.2 billion of US imports come from India. Furthermore, US sourced FDI (Foreign Direct Investment) into India was valued at $44.5 billion in 2017.
Now, recently announced corporate tax cut from 30% to 22% and with it several relief measures came right before Indian PM Modi’s week-long US trip where Trump declared a Trade Deal was on the cards. This is a step to further entice foreign investment in India and at the same time tackle the global economic slowdown that is threatening the Indian economy too.
Moreover, Indians are in abundance in a number of business sectors in the US like Information Technology, Telecommunication, Engineering, Textiles, and Pharmaceuticals.
Armaments – As Trump said India will buy more
With Trump announcing an enhancement in the India-US relationship, alongside Modi, we observe India’s current defense import scenario. According to the Stockholm International Peace Research Institute (SIPRI), India is the second biggest importer of weapons in the world, sharing 9.5% of the global purchase, after Saudi Arabia at 12%.
India is the second biggest importer of weapons in the world after Saudi Arabia.
Defense imports from Russia, the biggest supplier of weapons to India, have fallen down by 42% in recent years, especially between 2009-13 and 2014-18. However, the trajectory behind this is delayed deliveries and India looking for diversity.
According to SIPRI, India has now turned towards the US, Israel, and France. From 2014-2018, there has been an increase in the arms export from these three countries to India.
The five largest exporters to India between 2014-18 were the US, Russia, France, Germany, and China.
On the other hand, the US’ arms exports grew by 29% from 2009-13 to 2014-18. Moreover, the US share of total global exports rose to 36% from 30%. Thus, the gap between the demand and supply in deals in India is a chance for the US weapon companies to enter into the Indian market legally or illegally.