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Narendra Modi’s ‘Make in India’ could be stonewalled by Donald Trump

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COLUMN: Trump is playing shrewd chess moves to rattle India.

Sujeet RajanNEW YORK: Those seemingly incredulous phone calls with pariah world leaders and bizarre tweets that seemed naïve foreign policy blunders, could in fact be shrewd chess moves being played by President-elect Donald Trump.

Like the art of pointillism, where dots connect to form a pattern, it’s now beginning to seem likely that taking a call from Pakistan President Nawaz Sharif and a direct warning to Boeing, might all be deliberate moves, polite warning to India, with the underlying message and threat: ‘I’ll be tough on radical Islamic terrorism, confront Pakistan if need be, but when it comes to business it’s US first. Period.’

Let’s look at Trump’s way of rattling China first, without even talking to any of their leaders.

After the strong rhetoric on the campaign trail, where for 18 months Trump talked tough on China, labeling it ‘currency manipulator’ and flourishing at the expense of the United States – by taking away manufacturing jobs and building its country into a modern, developed nation – he followed it up with a mind boggling phone conversation with the premier of Taiwan, with whom US severed diplomatic relations. It startled China out of their wits. If there is one thing that is as precious as the Kohinoor diamond to China, it’s Taiwan.

Then, three days ago, Trump again started his tough talk on China through Twitter. In two successive tweets, he railed against China: ‘Did China ask US if it was OK to devalue their currency (making it hard for out companies to compete), heavily tax our products going into their country (the US doesn’t tax them) or to build a massive military complex in the middle of the South China Sea? I don’t think so!’

Trump’s third move on the chess board, as far as China is concerned, has come in a seemingly innocuous way, seems more symbolic, coming as it did a day before the Pearl Harbor anniversary when America solemnly condole the 2,403 lives it lost 75 years ago: the Japanese billionaire businessman Masayoshi Son agreed to invest $50 billion in the US to create 50,000 new jobs.

More than just a grand gesture, China hawks would be concerned over Trump’s warming up to Japan, first meeting with prime minister Shinzo Abe, with his daughter Ivanka Trump in tow, and now forging close business ties with Son, the CEO of SoftBank.

There’s a similar pattern to Trump’s ‘dealing’ with India so far.

In his campaign speeches, Trump too has railed against India, and the loss of American jobs to India. Last month, he said: “We are living through the greatest jobs theft in the world,” referring to India, Singapore and Mexico. “It’s getting worse and worse and worse.”

Although the Prime Minister of India, Narendra Modi, spoke over the phone to Trump and congratulated him after his win in the presidential elections, the two have not talked since then, just shy of a month now.

In the meantime, Trump has taken a call from Nawaz Sharif which threw India off-balance – just like China was with the Taiwan call – but maintained their sangfroid and made it more of a humorous situation. Of course, China too, since Trump spoke to Taiwan, tried to downplay the political repercussions of a phone call, but have been more direct than India. They have called Trump ‘naïve’.

India, of course, were earlier dismayed but didn’t react when Trump nominated staunch anti-immigration advocate Sen. Jeff Sessions of Alabama to be the next Attorney General of the US. It’s a certainty that Indian IT companies in the US are going to soon see plenty of lawsuits and complaints against them on exploiting loopholes in work visas like H-1B visa and L visas. Trump and Sessions will work in tandem to ensure that American workers and American companies are protected and benefit at the expense of Indian IT companies, and foreign workers.

But the latest move by Trump, issuing a business warning to Boeing, would be even more alarming to India.

It’s more than likely that Trump’s cutting off a contract with Boeing for planes for future presidents of the US, is connected to the fact that President Barack Obama has approved Boeing and Lockheed Martin doing business in India, including opening new factories and creating more than 1,000 new jobs for manufacturing fighter planes there. Trump’s tweet against Boeing came a day after The Washington Post ran a lengthy story on how the two companies plan to expand operations in India.

The Washington Post reported that Lockheed Martin and Boeing have made proposals to the Indian government to manufacture fighter jets — the F-16 Fighting Falcon and the F/A-18 Super Hornet — in India as the country seeks to modernize its rapidly aging fleet of largely Russian-built airplanes.

The report said, in both cases, the aviation companies would be building production facilities in India; Lockheed Martin proposes to move its entire F-16 assembly line from Texas to India, making India the sole producer of the single-engine combat aircraft. The U.S. military is phasing out the F-16 for its own use, but other countries remain as likely customers. Boeing would start a new factory in India.

India wants to co-produce the fighter jets as part of its ‘Make in India’ program, which has the lofty goal of expanding the manufacturing base to 25 percent of the gross domestic product in the next six years, reported the Washington Post.

Of course, the Indo-US defense ties remain strong. Recently, news broke of BAE Systems expected to sign a contract with the U.S. Department of Defense to supply M777 Howitzers to the Indian Army after both governments cleared the deal. India would buy 145 of the artillery guns in June in a deal worth an estimated $750 million.

But Trump is not averse to selling arms and equipment to India, or for that matter to Pakistan or Taiwan. That’s good business for the US. He would also not be bothered as to how much money American companies make in India selling their goods.

What Trump is bothered about is American companies like Boeing moving their manufacturing and intellectual base to India and undermining and undercutting American workers. That’s where a lot of companies from Caterpillar to Cognizant, Ford, General Motors and Eli Lilly, among others, would come under scrutiny.

Of course. American companies in India moving their business back to America would be, if not devastating, really bad for India’s growth, economy and employment numbers.

India may try to come up with ideas and strategies to counter Trump’s tactics. But if there’s one thing that Trump may not budge on, it’s to make America ‘great again’ by bringing jobs back to the US.

Like India is mopping up black money through demonetization, Trump’s strategy is to mop up hundreds of thousands of jobs from small pockets around the world, and bring it back to the US.

As Trump tweeted after he saved roughly 1,000 jobs at the Carrier plant in Indiana, warning companies not to do business overseas, at the risk of inviting his wrath, and promising them tax cuts: ‘Please be forewarned prior to making a very expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS.’

That’s good news for Americans. Bad news for Indians.

(Sujeet Rajan is Editor-in-Chief, The American Bazaar. Follow him @SujeetRajan1)