China seeks improved ties with India to ease US pressure: Business leader

China is trying to improve ties with India in an attempt to ease pressure from the incoming Trump administration, the head of a top India-centric US business advocacy and strategic group said on Tuesday.

During his presidential election campaign, Trump proposed a 60 per cent tariff on goods from China -- and a tariff of up to 20 per cent on every other US import.

Mukesh Aghi, president of the US-India Strategic and Partnership Forum (USISPF), said: "So, we are seeing an early impact of the Trump administration coming in that has created pressure on China to ease dealing with India. So that's why border patrolling has been agreed upon. Direct flights have been agreed upon."  "They will also issue more visas to Chinese coming to India. You are seeing the impact of Trump coming in having a positive impact on the India-China relationship," he further said.

 

Last month, India announced that it had reached an agreement with China on patrolling along the Line of Actual Control (LAC) in eastern Ladakh, in a breakthrough in ending the over four-year-long military standoff.

"The calculation on the part of the Chinese was that Trump was coming in. The relationship with the US will get stressful. So, why have multiple fronts of this stressful relationship? 'Let's at least ease the partnership or potential relationship with India itself'," Aghi told PTI in an interview.

India is likely to play an important role in Trump's "America First" policy by offering a place for secure sourcing while the new administration plans to move manufacturing away from China and create jobs in the US, he added.

"Efforts by the Trump administration to put in tariffs so it can put pressure on companies to move manufacturing back to the US, it's not going to happen overnight. It took almost 40 years for manufacturing to move out of the US. The challenge we have is we don't have enough skills. We don't have enough manpower to help us from that perspective. So, the transition will take time," Aghi said.

"That's where India can play a pivotal role by saying, 'Yes, we'll help you move manufacturing back to the US but we will also manufacture a lot of these components in India' and they become part of the global supply chain. It helps you because you're not dependent geopolitically on a risk factor in China but you depend on a friend. I see the concept of secure sourcing becoming much more pivotal and stronger than outsourcing or friend-shoring itself," the USISPF boss added.

"You will see India's role becoming much more pivotal as you look at building America first. At the same time, Atmanirbhar Bharat also within that supply chain becomes very critical," he said.

Aghi also claimed that corporate America was "very happy" with the election results.

"They feel Trump understands how challenging it is to run and grow businesses. He will hopefully bring the taxes down for corporations, which will help them to become much more profitable and grow the business itself. The corporate community welcomes the new administration, which is the Trump administration," he said.

"The market has gone up. What's interesting is also that the dollar has become stronger. That shows the confidence in the incoming administration by corporate America," Aghi said.

Responding to a question on the impact of the elections on the India-US relationship, the business leader said it was not just dependent on administrations.

"It is dependent on the geopolitical alignment between the two countries. It's dependent on economics. It's dependent on trade. It's dependent on people to people. When you look at geopolitics, India-US is aligned, especially with China itself," he said.

"We are seeing a tremendous amount of activities taking place between the two countries, under the umbrella of Quad with Japan and Australia. On the trade side, you have USD 200 billion in trade, which is expected to keep growing. On the technology side, what we're seeing is Indians are building a lot of US technology in India itself. The global capability centres are generating a substantial amount of IP (intellectual property) for US companies," said the USISPF chief.

Aghi also said the five million Indian-Americans generated almost 6 per cent of the US's GDP while only being 1 per cent of the population.

"The Trump administration will come in looking at how you create jobs in the US. That's where India has to play a very strong role by saying, 'Yes, we will support the US plus one strategy'. Will that interfere with India's strategy of Atmanirbhar Bharat? No. I think both can coexist and support each other for mutual success," he noted.