IDonald Trump
A brilliant showman
Probably the best thing for India.
In September 2019, I was one of 5,000+ IITians cheering Trump at the NRG stadium in Houston. His treasury secretary then was Steven Mnuchin – a Hollywood celebrity – who I was very much in awe of. Steve used to be a partner in the Dune Entertainment Fund which had been founded by Anytime Pte’s charismatic CEO – Gregory Coote. Dune produced Avatar and Life of Pi. And became the most successful film fund in the history of Hollywood. For his honeymoon, Steve is rumoured to have taken the Air Force One for a spin. Donald Trump is very similar to Steve. Steve is no longer the treasury secretary but his imprint is visible everywhere.
For example, Steve spent a lot of time analysing barriers to the growth of American business in emerging markets. One was the import tariffs charged by the importing countries. But more serious were the barriers that the U.S. govt had put up. U.S. businesses could not give bribes under the U.S. Corrupt Practices Act.
One American billionaire who also bought a major newspaper came up with a brilliant idea. He would pay hundreds of crores as legal fees to a friendly lawyer against a bill for legal services. The lawyer would pay all applicable taxes and use the balance to give bribes. By no yardstick of imagination could a legal bill be considered a bribe. Best of all there is no GST on legal bills.
As soon as Trump took over as POTUS, one of the first things he did was to put the Foreign Corrupt Practices act in abeyance. This has done wonders for the American businesses operating in India.
This is a complete masterstroke.
And only someone as brilliant as Trump could have not just thought of it but actually implemented it within days of taking oath.
Here is the President who is going to take both USA and India far. In one stroke he has removed the handcuffs from American businesses operating in India. He has also endeared himself to various stakeholders who hope to benefit from the bribes being paid by American businesses who can now claim tax relief in the U.S. for these expenses.
With tariffs restricting export to USA, focus will be on imports into India. This is great news for the entire service sector in India. Consultants, hotels, lawyers, distributors, headhunters, judges, regulators etc will all benefit from the explosive growth of American businesses wanting to access the Indian market.
As regards Indian mfg, there isn’t much to worry because we anyway have no chance. The sez framework has failed. And for everyone else – cost of power is 2x, cost of money is 3x and cost of real estate is 4x. There is nothing worth exporting so US Tariffs are unlikely to hurt us. For the new economy businesses, India already has their own colony deep inside USA.
It is called Silicon Valley.
It is a matter of time that
Silicon Valley will rule rest of the US.