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Does President’s Trumps Diplomatic visit to India render effect over stock markets .

Uploaded Date 02-Mar-20
TRUMP VISIT INDIA

Expectations of striking a strong trade deal with the U.S. were high in all quarters and among all stakeholders. This was just before President Donald Trump’s visit to India was about to initiate. While a few memorandums of understanding were signed, it has become clear that a U.S – India trade pact is months away, and not on the offing shortly. This renders repercussions on the economy and the stock markets. Let us consider how:


If we consider the U.S perspective, we see that drug makers and distillers were awaiting a chance to expand their business and operations in India, the seventh-largest economy in the world. In India, they would’ve got access to 1.3 billion prospective consumers. But they’d have to wait for at least some time as of now.


But the horizons nevertheless seem bright from an Indian perspective. The White House does have plans for a trade deal reserved for the future. U.S President Donald Trump has expressed that a significant trade deal is in the offing for the near future.


He further said that the upcoming elections in the United States may lay repercussions over this trade deal. There is then a possibility that a trade deal is struck before the elections take place. But the White House firmly believes that there is a trade deal on the cards.


At this time, the inability to strike a trade deal should not reflect too deeply over the differences in the opinions pertaining to politics and trade of the two nations. India and the US have more similarities than differences at this point.


The reason why either of the parties has not pushed the deal is the interests of the markets in their nations. The leaders are looking for ways to safeguards the producers of their respective nations. Opening up the markets to foreign competition is not always in the best interests of stakeholders.


India’s economy is in the process of reformation


India has over the decades gone by been known for setting high benchmarks in terms of trade barriers. The bureaucracy had best been defined as cumbersome.

It was only as late as the past two or three decades that India was on track to reform its economy. But the trend was once again reversed under Prime Minister Narendra Modi.


Things had not always been the same. When PM Modi first took office in the year 2014, he was considered to be a business reformer. The government came up with policies that were unique and unprecedented.


When the U.S president first took office, one of the first things that he did was to withdraw from the 12 nation Asia Pacific free trade pact. This was put in place by the Obama administration.


Prime Minister Modi has also acted on the same lines. He has last year abandoned another Pacific Rim trade agreement.


If we compare India and the US, we see that PM Narendra Modi may have been more reluctant to sign a trade pact. Exposing Indian companies to foreign completion may not be the best alternative at this time, considering India’s economic slump.


The Indian consumer is squeezed at this point. Indian loan companies are making unfruitful efforts to recover bad debts. They have correspondingly reduced lending.


A contemporary development in the history of India-US trade relations occurred last year. A few of the Indian products were denied duty-free preferential entry to the American markets. The tariffs over Indian imports correspondingly increased.


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