India Inc wants Donald Trump to dump protectionist policies

Responding to the victory of Donald Trump as the President of United States, India Inc leaders said they’d like Trump to pursue pro-business policies and not build trade barriers hurting Indian businesses.

“We have always admired America’s capacity of re-invention. Let’s be optimistic that the country and its new President re-invent themselves,” said Anand Mahindra, chairman of Mahindra & Mahindra.

During his election campaign, Trump promised aggressive protectionist measures along with a strategy to keep minimum wages at competitive levels to bring jobs back to the US from India, China, and Mexico to revive US manufacturing. Indian infotech companies have reasons to worry – if Trump follows his protectionist policies.

N R Narayana Murthy, former chairman of Infosys, said as long as the US did not follow policies that India was following before 1991, then there was no reason to be worried. “Indian infotech companies should improve productivity and quality.”

Adi Godrej, chairman of Godrej Group, said he was surprised with the result given that most media outlets were predicting that Hillary Clinton would be the winner. “But now that Trump is the President, we have to accept the reality. And, if Trump sticks to what he has said in his victory speech, rather than what he said during campaigning, then things will be fine.”

Harsh Mariwala, chairman of Marico, said he expects Donald Trump to be pro-India in his policies. “That’s a reassuring factor for me.”

K Satish Reddy, chairman of Dr Reddy's Laboratories, said the US elections have thrown up one of the most unexpected results in recent US history. “The US election has thrown up one of the most unexpected results in recent US history. Post Brexit, this is yet another event that that can bring about a great deal of uncertainty, at least in the short term. One will need to see how things pan out from here, US has always shown a capacity to reinvent itself in adversity ,” said Reddy. The Indian pharmaceutical companies have identified the US as one of their priority markets and earn substantial revenues from the country.

Trump’s is thought to be opposed to free trade; he has accused the US’ trading partners such as Mexico and China of unfair trade practices, currency manipulation, and intellectual property theft. He has also threatened to unilaterally impose tariffs (as high as 45% and 35% on Chinese and Mexican imports, respectively) and other punitive measures if they do not implement reforms.

Trump’s economic proposals, therefore, suggest renegotiating existing trade deals using “negotiators whose goal will be to win for America” and withdraw if the US’ demands are not met. Trump was also against the outsourcing of infotech contracts to India and is likely to impose visa bans. “While Trump is not against global trade, we suspect his anti-free trade rhetoric could be matched by other countries – China in particular – if he implement his drastic proposals. This could set the stage for anti-trade sentiment globally and initiate a trade war,” said a report by HDFC Bank.

Indian business lobby body FICCI said the election of Trump came at a time when relations between India and the US were witnessing a paradigm shift marked by significant convergence on strategic perspectives and enhanced economic engagement. “FICCI is confident that under the Presidency of Donald Trump, we will do even better and touch higher trajectories of growth in our bilateral ties and economic cooperation. FICCI has always been at the forefront of carrying forward our government’s mission to develop close and friendly ties with the US and we look forward to working with the new US administration towards substantial progress in all aspects of bilateral cooperation.”