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How Will Donald Trump Affect Indian Jobs?
Fri, 11 Nov Pre-Open

Finally, it's over. The hoopla around the US presidential elections has come to an end. American people have chosen their next president - Donald Trump. His shock victory has left stock markets awash with uncertainty. Speculations as to what effect his presidency will have on various countries are doing the rounds. You see, the US is by far the biggest economy on earth; any decisions made by the US government can have a big impact.

Trump's decisions will also have an impact on India. His presidency may have an influence on trade agreements, immigration, and foreign policy between the US and India. But let us limit our focus on the employment front in this article. The question then is this: How will Donald Trump affect Indian jobs? Allow us to explain.

In recent history, the US has been a pioneer of free trade. The logic is simple. Free trade benefits both countries, as each can specialise in producing what they do best. Poor countries provide goods that require cheap labour. Rich countries provide goods that require high expertise. The poor country benefits from increased employment and lower poverty. The rich country benefits from cheaper consumer goods and services.

But there's a catch here. The above scenario had meant good-paying American jobs shipped to low-wage countries overseas. So, American jobs have been lost to some low-wage countries. This is apparent between developing countries and the US.

Take the case of India. India has greatly benefited from free trade. The information technology boom is largely export driven.

Until 1991, India was a closed economy. And its average annual growth rate was around 3.5%. Since the economy liberalised and opened for trade, growth rates have doubled. Millions were lifted out of poverty in the process.

As far as Trump's views are concerned, he is against free trade. He agrees on opposition to free trade, opposition to trade agreements, and opposition to importing goods from lower wage countries.

So, if Donald Trump decides to restrict trade, the impact could be felt on Indian manufacturing and IT sector jobs. Only time will tell how things will pan out.

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