Howdy Modi: Houston, we don’t have a problem
Navtej Sarna | Former ambassador of India to the US
Hindustan Times
Prime Minister Narendra Modi’s second visit to the US during US President Donald Trump’s administration was a big success, and the Houston rally offered some key insights, writes Sarna.
The personal chemistry between the two leaders was evident, seen in the abundant praise and admiration they showed for each other’s achievements as well as their “victory lap” around the NRG stadium.
Their alignment on the fight against terror won huge applause. Trump spoke about radical Islamic terror and Modi alluded to Pakistan and said the US and India were common in their vulnerability with regard to the 9/11 and 26/11 attacks.
On the economic front, Sarna writes that Modi explained how the removal of excess regulations would contribute to greater ease of doing business, making India an attractive FDI destination. It was important for the US to hear his $5 trillion economy plans — “more investment, enhanced infrastructure and increased exports”, says the author. Trump too spoke about the US economy, but most importantly praised Indian investment in the US. While trade issues will be saved for their bilateral meeting, the leaders did speak about “energy cooperation” as Trump acknowledges the relevance of Modi’s meeting with CEOs of 17 energy majors companies.
Trump’s praise for the Indian-American community as “hard-working pioneers in medicine, business and technology” was the most important thing, Sarna says. He has had a tough stance on immigration, tightening H1-B regulations, but his remarks in Houston should ease concerns about illegal immigrants.
Houston, we have a spectacle
Pratap Bhanu Mehta | Contributing editor at The Indian Express
The Indian Express
Mehta writes that the Modi-Trump rally in Houston is a “window to the politics of our time” and should be seen as an expression of “larger politics”. Modi understands that modern politics is not about sociological or economic factors, but about “the power of the image’’ — that of an Indian prime minister “taking the American President’s hand’’ and making him pay homage to the Indian community. Modi sees potential in the diaspora to create a “unified force” in international politics. In Houston, there was a celebration of “trans-ethnic identification”, one that doesn’t conflict with citizenship.
Mehta also says that Houston symbolised the most ‘spectacularly visible’ affirmation of the alignment between India and the US in relation to the “China challenge”. “There are no China doves left in Washington’, writes Mehta and this is to India’s advantage.
In the larger perspective, the impact of Houston on US domestic policy will depend on two things. First, the Kashmir issue has been represented as a problem that has persisted for 70 years and the current crackdown will soon be followed with improved conditions for Kashmiris, but this is still “unredeemed’’. Second, there is a strong “Leftward turn” in American politics, which must not be underestimated, writes Mehta.
Modi and Trump have demonstrated that they are “ideological blood brothers” who know how to play politics well. They have “sold the thrill of power and prejudice” — “And at the moment, we buying it’’, concludes Mehta.
The flight of the wealth-holder is leaving India vulnerable
C.P. Chandrasekhar | Professor of economics and social sciences, JNU, and Jayati Ghosh | Professor of economics, JNU
Hindu Business Line
Chandrasekhar and Ghosh identify travelling, studying abroad and maintenance of close relatives as top reasons why assets and money have been rapidly flowing out of India. This can be seen in the “sudden” spike of outward remittances under the Liberalised Remittance Scheme (LRS) for resident Indians, which went from $1 billion in 2014-15 to nearly $14 billion in 2018-19, they write.
Increased outflow under the LRS is a “drain on foreign exchange resources”, especially since it has emerged as an important source of foreign exchange inflow into India, which also stabilises the balance of payments, they explain.
Another concern of the authors is that travel and maintenance of close relatives are ways by which money or assets can be used for purposes “other than originally specified”. LRS has become a way for wealth to be transferred out of India free of “international debt or equity instruments”, suggest the authors. This makes countries with open borders more vulnerable, causing foreign investors to “retreat” and allowing assets of domestic-currency to be substituted with assets denominated in foreign currencies.
The art of deploying diplomacy to advance our trade interests
Pradeep S. Mehta | Secretary-General, CUTS International
(Amol Kulkarni and Bipul Chatterjee of CUTS also contributed to the article)
Mint
Complimentary trade and diplomatic initiatives will determine India’s participation in the Regional Comprehensive Economic Partnership (RCEP) agreement, writes Mehta. PM Modi’s “mature vision” in propelling India’s ‘Act East’ and ‘Act Far East’ policies has led to an early conclusion of RCEP negotiations, which could be hugely beneficial to India, he explains.
RCEP, which constitutes a chunk of global GDP, close to half of the world’s population, and around 30 per cent of its trade, can help facilitate economic growth, stability and “maritime connectivity” in the Indo-Pacific region.
For India, it can be leveraged to help us become more competitive, “participate in global value chains, and seek additional market access”, writes Mehta. Given the current slowdown, RCEP can also help push for “difficult yet important domestic reforms”. However, it can trigger import surges from China, Australia and New Zealand, especially in agricultural and dairy sectors, warns Mehta.
Borne out in the USA
Ashok Malik | Distinguished fellow, ORF
Economic Times
Malik explains how the ‘Howdy Modi!’ event in Houston showed that India-US ties are more strategic than ideological.
First, he equates the frenzied event to the 1964 Beatles concert in Houston, when “Beatlemania had (just) hit America”. ‘Howdy Modi!’, however, was mainly a celebration of the audience — the “high-achieving” Indian community in the US, writes Malik.
Trump’s assertion that India is a “victim of cross-border terrorism rooted in Islamic/Islamist radicalism” has never been expressed with “such bluntness” by past US presidents.
Malik also points out that despite being a “trade bully”, Trump thanked Indian investment for creating jobs in the US. Gushing about Indians will “inoculate the (Indian) community from the ugly rhetoric of US identity politics that will inevitably surface before the 2020 election”, predicts Malik.
Modi’s efforts to establish a connection with Trump, a similar tactic he used on former President Barack Obama, “demonstrates a larger axiom” than just ideology, explains Malik.
Corporate tax cut is no Brahmastra
Renu Kohli | New Delhi-based macroeconomist
Financial Express
In her piece, Kohli says Friday’s corporate tax rate was necessary but insufficient reform, which requires added support from other structural reforms in factory and product markets. At a time when “rising income disparity” could hurt growth in the long-term, the timing of the reform is also questionable, she writes. Also, the last time this was done in 1997, the economy failed to sustain the demand boost, and later “went into a recession”.
The government is yet to clarify its stand on the financing side of the reform, which has created confusion. It sent bond yields in the opposite direction and confused rating agencies. Though this is the time for “aggressive disinvestments to close as much of the financing gap as possible”, they can only do so much, writes Kohli. Further, if growth fails to survive, debt could pile up, forcing the government to raise effective tax rates and undoing everything today, she notes.
Beatles were great with incomparable George Harrison
How true that Howdy MOdi is like a Beatles pop show. And just as relevant to the serious business of global trade, diplomacy and security .