Bucking media opposition, popular perception and Hillary Clinton’s vicious campaign, Donald Trump has emerged as the 45th president of the United States of America. Trump elucidated on his 15-point agenda in the run-up to the elections. If he decides to implement them, it could impact the Indian government, people and businesses in several ways.
Here is a lowdown on the implications Trump’s policies as the US President could have for India.
1) The Tax Plan: One of the highlights of Trump’s economic campaign is his plan to reduce corporate tax rates in the U.S to 15%. At present the rate stands at 35%. This would make the U.S one of the most attractive destinations in the world for businesses, especially for American businesses that have set shop in other countries to improve their profitability by paying less taxes. If Trump were to implement this plan, U.S businesses in India could be lured back to American soil. Take the case of Ford Motors. Trump has repeatedly flayed Ford during his campaign for moving manufacturing outside U.S especially to Mexico in a bid to circumvent high taxes. Now Ford India has been making good progress in India. Its manufacturing unit in Chennai recorded its highest ever exports this August. Ford India exported 67% of all its vehicles manufactured in India. In addition, it made a substantial investment in the growing business of car rentals in India by investing in Zoomcar. For all the money Ford India earns, it pays the same corporate tax rate inIndia as it does in the U.S. If Trump were to come true on his promise to slash corporate tax to 15%, Ford India could well be tempted to move a part of its revenue earning processes back to Chicago from Chennai. That would be bad news for over 2000 employees working at the Ford factory in India. Trump’s massive tax cut would more than offset the advantages of cheap labour that India provides to Ford. Other American businesses in India could be tempted to do the same.(more)
No comments:
Post a Comment