A Stab at Normalcy: How a Biden presidency will affect India

Qutubkhan Currimji

Adi Raghavan

With the vitriol, divide and malice at an all-time high, the American presidential elections WERE quite hotly-contested. This significant political event, outside of the domestic ramifications, has deep-seated macro-economic ramifications that will permeate throughout the global markets. 

With the USA being the world’s top economic power and having a hegemonic military influence on the world; the US elections, will continue to exert influence on the Indian subcontinent. This relationship was born of a shared sense of values, a shared economic stake in India’s modernization, a shared, unspoken concern about China’s rise, and a collective realization of India’s growth potential. Trump and Biden do not agree on much at all. Hence, their shared view on India is striking—but then again, policy toward India is one of the few foreign policy issues that enjoys bipartisan backing in Washington.

When it comes to sheer political theatre, few can match Donald Trump and Narendra Modi. What seemed to be a blossoming friendship between the two counterparts was brutally undone the 2020 elections. The Prime Minister now must forge relations with a new ally, one who may not be privy to the theatrics that his predecessor enjoyed.

How Biden turned the Indian American voters’ heads?

 

India was in the spotlight in this election like never before. Some have argued this is, in part, due to polarised views of our Prime Minister, which could be colouring Indian American’s voting decisions.  On the one hand, Trumps’ strategically photographed bromance with Modi at the Howdy Modi event, did indeed leave an impression on the Indian American population, especially with the affluent Indian Americans which favour the lower taxes narrative. However, there remains a modest amount of polarization centred around these two controversial leaders. 

There are roughly a million Indian American voters in the battleground states, and their turnout became a game-changer. Largely, Indian Americans have rejected Trump’s overtures because, as immigrants, they remain nostalgic of the inclusiveness that they felt earlier. Indian Americans had an added incentive to vote for the Democratic ticket in November because Joe Biden’s nomination of Indian-origin senator Kamala Harris as his running mate has created a stir in the political circles, and it was speculated that the decision had a significant impact in drawing the immigrant community towards Democrats. From this standpoint, a Biden victory has given the Indian community a seat at the highest table of power in the United States for the first time.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact on the trade ties with India

 

This remains an essential factor to consider as the correlation between Indian markets and US markets have increased over the last 20 years to 61%, and a shift in the US markets is likely to affect the Indian markets similarly.

While the recent trade protectionist measures tussle is not new, how it dishes out on the geopolitical stage differs because of who is at the helm. Both economies have taken a protectionist stance, the latest one being Modi’s call to businesses to be self-reliant. Self-reliance is a popular theme in this geopolitical climate, and as we saw with India’s reluctance to join the Regional Comprehensive Economic Partnership (RCEP) New Delhi’s protectionist instincts remain strong.

They could grow more robust if the WTO remains handicapped to arbitrate trade disputes and countries find cover in playing the national security card in erecting trade barriers. India still has extraordinary potential as a durable partner in a region that may be the world’s centre of gravity for decades to come. 

 

Biden’s administration is likely to follow a more traditional approach to bilateral trade with India by focusing more on growing the total volume of trade than on the narrow question of deficits. With Biden’s victory, it may not result in an absolute convergence between India and the US. Still, it could pave the way for closer economic ties between both countries and ensure that their strategic ties continue to grow.

 

This election was crucial to international students, in terms of how they stand to be affected in the potential job market in the USA. For Indians studying in America, the November elections held a crucial key in determining the immigration policies that the country might take in the future. Trump view over immigration policies and uncertainties concerning Visa rules were some of the reasons why many Indians students keenly awaited the elections in November and celebrated Biden's victory.

America’s diplomatic alignment with Modi – or any leader at the helm of Indian democracy, even as it slips rapidly into fascism – remains bipartisan, and Biden himself has been at the centre of efforts to form a strong economic and security partnership with India since his days as a senator. The Democratic presidential hopeful was one of the primary architects of the US’s nuclear trade agreement with India in the late 1990s and early 2000s, which laid the foundation for the current political and economic partnership between the two countries.

The consensus is that bipartisan agreements are likely to perform better under a Biden administration, which could, in turn, solidify India’s position geopolitically.

China & Pakistan Conundrum: Biden’s multilateralism

 

For India, specifically, the border tensions with China since June this year have added a new geopolitical dimension. The US has, for long, viewed India as a critical ally in building a peaceful Asia in which China is a player, but not a hegemon, and that is likely to remain unchanged with the Biden presidency.

Besides China, a thorn in the two countries’ friendship is the US’s relationship with Pakistan. Historically, the US has followed the principle of de-hyphenating India and Pakistan in matters of foreign affairs. While the US considers Pakistan a friend, China and Pakistan share a vital infrastructure, trade, and security partnership. A rising China underscored the quiet logic of partnership between Washington and New Delhi.

With U.S. and Russia stepping up a battle for arms contracts in the lucrative Indian market, it created an awkward geopolitical triangle with unpredictable consequences, such as the USA threatening to impose sanctions on India; however, this issue simmered down through diplomatic settlements.

 

Before June, though, India has historically thrived in strategic ambiguity, it can choose issue-by-issue when to ramp up barriers and nationalist rhetoric, and when to invest the energy in a more complex hedging strategy.

With USA’s demilitarization in Afghanistan, the US-Pakistan relationship will need a new anchor, and it could face a bit of drift. This presents a bright spot for Indo-American ties, where India has, in the past, taken umbrage against the US not openly sanctioning Pakistan for its alleged activities. But experts believe that a Biden victory may be more vocal on the Kashmir issue, which may not be acceptable to India.

Verdict

Right now, both Washington and New Delhi, in their ways, are part of the problem in a world where democracies are busy undoing themselves, economic nationalism is rampant, and geopolitical competition is unbounded by rules or predictability. It is essential, however, not to take a simplistic view of the bilateral relationship using the lens of parties and individuals, but to understand that geopolitical dynamics and economics drive the relationship. As Biden takes on the role as commander-in-chief, the sooner both countries recommit themselves, and their partnership, to being part of the solution, the better. 

Illustrated by Amisha Thakre

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