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Four ways Donald Trump's protectionist views could affect Indians

Donald Trump's stance on trade has always had a protectionist bent as his campaign showed aversion towards immigrants, H-1B visas apart from pledge to set up tariff barriers that could cause a ripple effect in India too.

twitter-logo Diksha Ramesh   New Delhi     Last Updated: November 12, 2016  | 09:50 IST
Four ways Trump's protectionist views could affect Indians

Donald Trump's stance on trade has always had a protectionist bent as his campaign showed aversion towards immigrants, H-1B visas apart from pledge to set up tariff barriers that could cause a ripple effect in India too.

Now taking over as the 45th president of United States, his tough trade beliefs could become a reality.  

Here are 4 ways Trump's policies might affect India:

VISA

Many Indians who aspire to work in America could face a setback in future due to Trump's stance on H-1B visas.

The H-1B visa programme is a non-immigrant visa that allows employers in the US to hire foreign professionals for specialised jobs.

On March 11, 2016 Donald Trump said that the H-1B visa programme he uses to employ highly-skilled foreign workers at his own businesses should end as it is 'very unfair' for American workers.

Several companies like Cognizant which has large operations in India send their staffs to America on H1-B visas.

In a speech last month in Ohio, Trump raised the issue at the millennial-age voters, calling the outsourcing of jobs for 'college-educated kids' a 'tremendous threat.'

Among the players who may face the heat are IT professionals and IT companies from India who are major beneficiaries of H-1B visa.

IT SECTOR

India's IT sector has been a major exporter of IT services, accounting for more than a quarter of country's international trade. The IT-BPM exports for the financial year eneded 2016 crossed the $100 billion milestone and the IT services export was recorded at $61 billion, according to Nasscom.

Companies like TCS and Infosys are likely to lose out on workforce if Trump takes a stern action against H-1B visas.

"The Indian IT companies have been outsourcing its services to the US companies and earning approximately more than 60% of its $110 billion yearly revenue from the US market only," said Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments.

"The IT sector is already struggling with reduced IT spending, now the views voiced by the President-elect (Trump) regarding bringing back the jobs to US again will create more trouble for already nervous sector," said Mustafa Nadeem, CEO, Epic Research.

JOBS

The president-elect has expressed his anguish over jobs being stolen from Americans.

"I'm going to bring jobs back from China, Mexico Japan, Vietnam. They are taking our jobs. They are taking our wealth. We have $2.5 trillion offshore. We're going to bring that money back," said Trump in a Republican debate in North Carolina.

He also spoke about jobs moving to India in his speech in Minneapolis a day before voting: "IBM laid off 500 workers in Minneapolis and moved their jobs to India and other countries. A Trump administration will stop the jobs from leaving America, and we will stop the jobs from leaving Minnesota."

PHARMA INDUSTRY

"A win of either of party was expected to impact pharmaceutical industry in near to short term. Both Hillary and Trump have favored tighter pricing policy in US. We are expecting trump to advocate repealing current obamacare, ultimately putting pressure on the pharmaceutical companies," said Abnish Kumar.

Many of Indian generic drug companies like Sun Pharma, Lupin and Dr Reddy's gained under the Obamacare that allowed the use of 'biosimilars' which are drugs that have properties similar to ones that are already licensed.

Indian Pharmaceuticals is the second biggest exporter to US recording 2086.32 USD million in exports as of 2016. In 2013 Pharma exports touched an all time high 11.1 billion in 2013.

If Obamacare is scrapped, Pharma companies will be hit hard costing thousands of jobs in India and abroad.

 

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