History has already been made by Barack Obama becoming President of the United States. The man of mixed ethnicity is considered to be the utterly representative of the 21st century America. He is expected to reverse (for the better, of course) the image of America abroad and refresh the spirits back home.
But we all saw that this was amongst the most sought after elections in the US. The passion of the elections in the US is understood, but why are we all here in India too were so curious about the elections in the US. One would say that we have become more globalised. Sure we have. But I guess there’s more to it. Our economy has developed deeper linkages with the US around increased trade, currency and investment. India Inc is one of the largest employers in the US as was pointed out in a recent FICCI report, on the back of recent acquisitions and investments by a large number of Indian companies like Wockhardt, TCS, etc. All this has significantly increased the risks and impacts of a US recession on our economy.
We just benefited for years due to the recession in the US economy. The corporates there outsourced their jobs to India leading to the Service sector being the highest contributor to our GDP growth. But now the biggest expectation for India from the new US President is the reversal of the decline of the US economy. He ha stalked about pumping in billions of dollars and tax breaks to the middle class to ‘kickstart the US Economy’. Our exporters should be preparing to take advantage of this coming resurgence of US demand and the government must ensure that our exporters are enabled to benefit from this opportunity.
“Indian businesses can look to broad changes in the outsourcing structure — with more emphasis on on-shore projects and investments by Indian companies with tax and other incentives to encourage this” says Rajeev Chandrasekhar, Member of Parliament and president of FICCI.
Obama has repeatedly talked about making the US economy competitive. This will redefine the strength of the dollar, which is currently at its strongest levels on back of flight to safety of the currency back to the US from across the globe. The US is also expected to be more aggressive in trade negotiations as he has also said “US will fight for a trade policy that opens up foreign markets to support good American jobs.”
India specially needs to be careful on this front. It is believed that Obama is anti-outsourcing but in order to “build a close strategic partnership” between US and India as he had pledged it would be difficult to take a call against outsourcing. Besides, he is not expected to come in the bad books of the corporates in the US who have been benefiting from outsourcing as a result of low costs. To keep his word, he may discourage the issue of H1B visa to Indians (outsiders for that matter).
The global slowdown is already being tagged as “Made in America”. One of the biggest negatives dragging down the world economy has been this growing sense of hopelessness and the vacuum of credible international leadership. Barack Obama has demonstrated both intellectual leadership and temperament that could turn this hopelessness into a positive view of the future. He is seen as the leader who is attuned to temperamentally, intellectually and emotionally lead the nation which leads (well, almost) the globe.
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