Who’s Afraid of Donald Trump?

If the Indian government’s response to US President Donald Trump’s trade-related measures imposed on India has been pusillanimous, the reaction of some members of the opposition has been downright embarrassing in terms of its strategic vision.

Recall that the former had consisted of Prime Minister Modi posting conciliatory messages on X, when actually India should have slapped a reciprocal 25% “penalty tariff” on US goods following Trump’s secondary tariff on India for purchasing Russian oil. This tariff is in gross violation of the unwritten rule of the game in international relations, and not just global trade, that a country may choose its partners as it pleases.

By staying quiet at the time, India lost a golden opportunity to assert its sovereignty. Sovereignty is to be viewed as non-negotiable, and not subject to an economic calculus. But reducing it to such transactional terms is precisely how much of the Indian media seems to have viewed the matter.

The consensus within the establishment has been that India should stay calm in the face of Trump’s aggression and “negotiate”, as a member of the diaspora had opined to a fawning television anchor. He seemed to have forgotten that it was Trump who had called off the trade negotiations. How a country can negotiate when the counterparty has reneged from the process is a mystery.

The timidity of the government’s response to the penalty for buying Russian oil may be contrasted with the excited coverage of the hike in the fee for the H-1B visa. An unnamed government official is reported as stating “they are afraid of our talent”. Opposition politicians have besieged the prime minister on the matter. The New York Times cites the chief minister of Telangana as having “implored Mr. Modi to protect the interests of our tech population and skilled workers”.

In a trade war, to retaliate, and not implore, is what a great nation does. There was also a certain parochiality to the chief minister’s response, for a large percentage of the Indian holders of the H-1B visa are from his own state, which has long welcomed some of the ‘Mag 7’, the largest corporates of the American tech industry.

The presence of Indians from most of the other Indian states among H-1B visa-holders is minimal. And this is the point. Trump’s action on visas for tech workers has attracted far greater attention than the impact of his actions on other areas of India’s economy. Think of the diamond workers of Surat and the garment makers of Tiruppur. They have had fewer supporters among politicians as the tariff on Indian gems and textiles, respectively, were hiked.

Actually, for India, the potential economic impact of the oil embargo could be even greater than that of the tariff on goods exports. With US sanctions on purchase of oil from Iran and Venezuela and now the indirect pressure in the case of imports from Russia, a very large swathe of economic activity in India has been rendered vulnerable. It introduces uncertainty on the oil supply chain in the future. It is not that the visa issue should be ignored, but its economic impact must be seen in perspective.

First and foremost, its impact will only be felt at what economists refer to as ‘the margin’. That is, only future hiring of Indian tech workers in the US that will face the 100,000 dollar fee, for visa renewals are not affected. Hence Indian companies can continue to earn the same profits by employing Indian workers onsite in the US, and the currently employed workers can continue to repatriate their earnings to India till such time as Trump may choose to tax repatriation heavily, as his administration has indicated it may do.

So, the H-1B visa fee hike has the potential only of slowing the growth of income for Indian companies and nationals. The hike in the tariff on goods, however, may be expected to have an immediate effect. India’s exports to the US will falter if they lose competitiveness. In every way, the visa issue is dwarfed by the significance of the tariff on goods and the constriction of oil supplies. To get a sense of the numbers involved, note that about 80% of the H-1B visas goes to Indians. With a cap of 85,000 such visas to be issued per year, approximately 65,000 workers face uncertainty with regard to employment in the next twelve months.

So why has the visa issue given rise to so much agitation? Apart from the obvious economic significance of middle-class Indian families bettering their lot through migration, even when it is temporary, there is a cachet to working in information technology (IT). It is considered to be the cutting edge of knowledge today and bestows a prestige on those who are seen as good enough to work in the field. This, combined with the promise of America as a country is a heady mix for the Indian bourgeoisie.

The mainstream English-language media, where the workers belong to this very class, is incensed when access to the United States is no longer assured, in a way that they are not when tariffs are imposed on jewellery or agricultural products. In this context, contrary to the peevishness of the mainstream, the influencer Vembu Sridhar posed a thoughtful question. On the social media site X, he has proposed to those who currently hold H-1B visas that they return to India where they are bound to succeed in time – in his reckoning five years – rather than continue to “live in fear” due to the precarity of their residence status overseas.

He has remarked on the experience of his “Sindhi friends” who came to India after the Partition, and have succeeded greatly thereafter. Mr. Vembu’s advice has value prima facie as he is a highly successful tech entrepreneur with impressive professional qualifications gained in the US, but the comparison he makes does not capture the full picture. In 1947, the Sindhi migrants had left everything behind in their homeland and had to start from scratch, with little assistance from the Indian state.

Today, IT professionals who choose to return are bound to find a niche in the local industry, many having worked here before. In fact, some of them already work for India IT firms, which may now reshore activity to India, to circumvent the 100,000 dollar fee. But above all, many of the H-1B visa holders have received both their initial on-the-job training in India and an expensive publicly-funded education before that. For them, to return to work in India would be no more than a quid pro quo. Indeed it is a puzzle why India’s public engineering institutes have not made working in India even a temporary requirement for their graduates.

While we can expect little political awareness from the Indian bourgeoisie, it is surprising that the self-consciously progressive sections of the Indian diaspora in the US, mainly academics, have remained silent in the face of Trump’s depredations. Their cosmopolitan outlook would surely absolve them of commenting on the blocking of Indian goods and workers from the US market but not of the duty to call out Trump’s violation of democratic norms.

For decades now, India’s liberal establishment has lionised this cohort but in this moment of crisis for the country the liberal cosmopolitans have chosen to maintain a stoic silence. Never hesitating to school their erstwhile compatriots on the precarious state of Indian democracy under Modi, they have acquiesced in Trump’s manipulative, authoritarian, vituperative and wholly unacceptable conduct of international affairs.

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