Joe Biden And Financial Policies

Joe Biden And Financial Policies

Joe Biden’s stint as the US president will commence on January 20th, 2021. We do not know whether the President-elect will live up to expectations of being a hero – as deemed by many, but his plans for the country are ambitious and represents more than just reassurance from Trump’s administration. Here’s a look at the proposed financial policies of Joe Biden and how it may affect America and India.

Crux of the Matter

Biden And The Way Ahead
Experts say, Biden’s prsidency entices a feeling of hope and curiosity among American citizens as well as Indian commentators, but could draw scrutiny from the same. With all that has besieged the US – from the pandemic to the social unrest to the US Capitol Hill siege, citizens are expecting the new president to be a hero. Whether or not the president-elect will live up to such expectations only time can tell, but his plans for the country are still ambitious and represents more than just reassurance from Trump’s administration. Revitalizing the middle class and making it more racially inclusive is a cornerstone of his plans.

Tax Policy And Trade Solution
On the trade front, US and India’s relationship with China bodes well for the relations between both countries. India has had a trade surplus (exports greater than imports) with the US, for almost twenty years.

The US accounts for ~17% of India’s exports, rendering the relationship of the countries very significant, which does not look like changing any time soon.

  • Biden wants a progressive and less debilitating tax code.
  • His plan is to generate $4 trillion of additional revenue over a decade.
  • He wants are raise the top income tax bracket to 39.6% from 37%, tax capital gains, and dividends at ordinary rates for those with annual incomes over $1 million, and increase the corporate tax rate to 28% from 21%.

Experts believe that this tax regime may turn into a boon for India as this may attract more FDI. India had reduced the corporate tax rate to 22% for companies that gave up all exemptions and incentives in September 2019. The effective rate without exemptions would be about 25.17%. However, a 15% rate has been offered to new companies including manufacturing firms. The rates are far more attractive compared to the previous rate of 30%.

Other Notable Policies

  • Biden’s climate change measures policy has attracted attention from the people.
  • Calling it the “Clean energy revolution”, he aims to invest $2 trillion and create up to 10 million jobs.
  • The US has also promised to rejoin the Paris Climate Change Accord which could help India in technical and financial ways but his policies could also spell danger.
  • In accordance with these policies, Biden may include carbon adjustment fees on goods imported from countries that are high carbon emitters, and India being a trade partner might be dealt with higher import tariffs.
  • Biden has promised to expand the Obama care subsidies to increase reach to more middle-income families on the health care forefront.
  • Biden expanded his student debt plan and said he wants to forgive all undergraduate tuition-related federal student debt for those who earn up to $125,000 and attended 2 and 4-year public colleges and universities.

Potential Concerns For India

  • Under the Trump administration, US restricted the visa regime due to the ‘America first’ policy, which affected Indian youth significantly – the new President seems inclusive of immigrants.
  • US sanctions on Iran impeded India from obtaining crude oil cheaply. Under Biden, India can hope the situation alleviates and lower crude oil price benefits the Indian economy – that has high crude oil consumption – in the long run.
  • In July 2020, Biden proposed a $700 billion plan to boost America’s manufacturing and technological strength. This involves government spending of $400 billion on US goods and services and a $300 billion investment in research and development (R&D) on technologies like electric vehicles, lightweight materials, 5G, and artificial intelligence.
  • This Made in America policy could also hinder investment in India when it comes to manufacturing.

The economic plans for the country seem promising for American citizens as well as immigrants.
“Will America be great again?” – Only time will tell.

Read More about the presidential elect Joe Biden here:

Summachar brings you this story in collaboration with Finmedium that can be found on Instagram at @finmedium and on the web here.

Curiopedia
  • Banking, financial services and insurance (BFSI) is an industry term for companies that provide a range of such financial products or services. This term is commonly used by information technology (IT), information technology enabled services (ITES), business process outsourcing (BPO) companies and technical/professional services firms that manage data processing, application testing and software development activities in this domain.
  • Joe Biden’s negotiations with congressional Republicans helped pass legislation including the 2010 Tax Relief Act, which resolved a taxation deadlock; the Budget Control Act of 2011, which resolved a debt ceiling crisis; and the American Taxpayer Relief Act of 2012, which addressed the impending “fiscal cliff”.
  • The United States fiscal cliff refers to the combined effect of several previously-enacted laws that came into effect simultaneously in January 2013, increasing taxes and decreasing spending. At 12:01 am EST on January 1, 2013, the US “technically” went over the fiscal cliff.

What Joe Biden Means For India And The World?

What Joe Biden Means For India And The World?

Let’s get to know more about what Joe Biden, the US President-elect, has said and done regarding India, as well as his possible future stance.

Crux of the Matter

Equation With India

  • Biden announced in 2006: “My dream is that in 2020, the two closest nations in the world will be India and the United States”.
  • 2008: Played key role in getting the India-US Nuclear deal approved.
  • Kamala Harris became the first Indian-American Vice President of the US.

  • Plan to increase H1-B visa numbers and remove limit on “employment-based visas by country” – expected to benefit thousands of Indians.
  • Trump recently said, “Look at India. It’s filthy. The air is filthy”.
    Biden replied with “It’s not how you talk about friends.

The U.S. and India will stand together against terrorism in all its forms and work together to promote a region of peace and stability where neither China nor any other country threatens its neighbors

Joe Biden in October 2020

Kashmir And CAA-NRC
Biden has criticized India’s Citizenship Amendment Act and National Register of Citizens, labeling it “inconsistent with [India’s] long tradition of secularism and with sustaining a multi-ethnic and multi-religious democracy”.

Biden has also called for “restoring” human rights in Kashmir.

In Kashmir, the Indian government should take all necessary steps to restore rights for all the people of Kashmir. Restrictions on dissent, such as preventing peaceful protests or shutting or slowing down the Internet, weaken democracy

Joe Biden On Kashmir

On China

  • Biden has called to “pressure, isolate and punish China”.
  • Critical of “China’s deepening repression in Hong Kong”.

China’s internment of nearly one million Uighur Muslims is among the worst abuses of human rights in the world today.

Joe Biden on Uighur Muslims in China

Read: China Slaps Back Sanctions On US Over Uighur Matter

On Russia

  • Biden has called Putin “dictator”.
  • Labelled Russia “biggest threat to America’s security”.
  • Biden has called poisoning of Russian opposition leader Navalny “unacceptable” and has “promised to “stand up to autocrats like Putin”.
Curiopedia
  • In the early 70s, Biden decided to run for Senate for the Democratic Party. He defeated his political opponent, J. Caleb Boggs in 1972 and became one of the youngest Senators ever, at age 29.
  • In 2016, as vice president, Joe Biden participated in the Oscar gala to announce a performance by Lady Gaga. He talked about the theme of Lady Gaga’s song ‘Til It Happens to You’.
  • In 2015 his eldest son, Beau, died from brain cancer; Biden recounted the experience in Promise Me, Dad: A Year of Hope, Hardship, and Purpose (2017).

Kamala Harris And Indo-US Ties

Kamala Harris And Indo-US Ties

As the 2020 US Presidential race draws closer, let us take a look at Kamala Harris, a Senator with Indian origins who might be the Vice President if the Democrats emerge victorious. While the Indian media is talking about her tenuous relation with India, we take this opportunity to also explore the topsy-turvy Indo-US relations in modern times.

Crux of the Matter

Profile
Joe Biden, the Democrat Presidential candidate for the 2020 US elections, has declared that Kamala Harris would be the Vice President of the US if he wins the elections. In doing so, Harris is the first Asian-American and the first Black woman to be nominated for a major political position in US history.

Harris was born in Oakland, California in the US. Her mother was born in India while her father was born in Jamaica. She became the Attorney General of California in 2010, becoming the first woman and the first African-American to do so. She was elected to the US Senate in 2016, becoming the first Indian-American and the second African-American woman Senator of the US.

2024 Presidential Candidate?
Several critics have claimed that if Joe Biden wins, he might serve only one term due to his age (currently 77 years old), and have claimed that Kamala Harris might be the Presidential Candidate of the Democrats in 2024.

Origin
Several analysts have claimed that Harris has been ambiguous regarding her Indian origin and has displayed affiliation for her African origins.

My mother understood very well that she was raising two black daughters… she knew that her adopted homeland would see Maya [Kamala’s sister] and me as black girls and she was determined to make sure we would grow into confident, proud black women.

Kamala Harris in her biography The Truths We Hold

However, she has recently declared pride concerning her Indian origin.

Growing up, my mother would take my sister Maya and me back to what was then called Madras because she wanted us to understand where she had come from and where we had ancestry. And, of course, she always wanted to instil in us, a love of good idli.

Kamala Harris on 15 August, 2020


Decisions On India

  • Kamala Harris criticized India after the Abrogation of article 370 in 2019, and declared that there might be “a need to intervene if the situation demands”.
  • Dr. S Jaishankar, the Minister of External Affairs of India had cancelled a meeting with the US Congressional Committee regarding the Kashmir issue. Jaishankar cancelled the meeting reportedly due to the presence of Senator Pramila Jayapal, who moved a bill to direct the Indian Government to uplift restrictions from Kashmir after 370 abrogation. Harris supported Jayapal in the conflict and criticized Jaishankar for the decision.
  • Harris skipped the Howdy Modi event held in September 2019 in the US, reportedly in a protest against India’s handling of the Kashmir issue.
  • Harris is against the revoking of H1-B Visa, and has a pro-immigrants stance. She has called for providing them citizenship without any hardships.

US Presidents And Take On India

  • Richard Nixon: 1969-74 (Republican)
    Nixon supported Pakistan in the 1971 Indo-Pak war and criticized India for its non-alignment policy. Nixon has also reportedly called Indians “slippery, treacherous people”.
  • Bill Clinton: 1993-2001 (Democrat)
    Clinton visited India in March 2000, becoming the first US President since 1978 to visit India. He supported India in the 1999 Indo-Pak Kargil war and re-initiated the India-US relations after a discord occurred between the two since the late 1970s.
  • George Bush: 2001-09 (Republican)
    Bush signed a civil nuclear deal with India which ended India’s isolation from the world nuclear market. He also joined India in counter-terrorism measures and invited India to the G-20 (International conference on world economy).
  • Barack Obama: 2009-17 (Democrat)
    Obama is the only US President to have made two official visits to India. He supported India’s bid to be a permanent member of the UN Security Council and agreed to supply civil nuclear equipment to India, with the previous deal under Bush regime stuck in complications.
  • Donald Trump: 2017 – Present (Republican)
    Several high profile visits like “Howdy Modi” and “Namaste Trump” have been made between Modi and Trump since the latter’s election. Annual bilateral trade between the US and India reached $142 billion in 2018, increasing from $11 billion in 1995.

    The White House recently declared that “the Trump Administration has elevated the US relationship with India” like never before. The US has become the 2nd largest arms supplier to India, and recently supplied MH-60R and AH-64 Apache helicopters to India. Trump has also declared support for India amidst recent conflicts with China.

Curiopedia
  • Alexandria Ocasio-Cortez is an American politician serving as the U.S. Representative for New York’s 14th congressional district. Taking office at age 29, Ocasio-Cortez is the youngest woman ever to serve in the United States Congress.
  • Nikki Haley is an American politician who served as the 116th Governor of South Carolina. Haley was the first female governor of South Carolina and the first female Indian-American governor elected in the United States.
  • Piyush “Bobby” Jindal is an American politician who served as the 55th Governor of Louisiana from 2008 to 2016. He was the first Indian American governor in US history.

India Adds American Anti-ship Missiles to Its Arsenal

US has approved the sale of 10 AGM-84L Harpoon Missiles and 16 MK-54 Torpedoes to India. The deal was approved at $155 million. 

Crux of the Matter

Strengthening Indo-US Ties
To combat Coronavirus, the US recently signed a huge deal of Hydroxychloroquine (HCQ) drug with India. And in the backdrop of Indian pharmaceuticals receiving clearances from USFDA and extension of stay of the H1B visa holders, the defence deal of 10 AGM-84L Harpoon Missiles at cost of $92 million and 16 MK-54 All-Up-Round Lightweight Torpedoes with 3 practice torpedos and related equipment at cost of $63 million will deepen and strengthen the Indo-US bilateral ties. 

The deal will be finalized after US Congress clears the deal and it enters into price negotiations round. To increase naval security, both weapons will be fit onto India’s existing fleet of P-8 maritime surveillance aircraft. The U.S. Defense Security Cooperation Agency said, “India will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defence.”

Geopolitical Muscle
According to the report of SIPRI, India’s import of weapons from Russian fell by 42% between 2014-18. India is constantly increasing the variety of weapons in its arsenal to combat China flexing its muscles in the Indian Ocean regions and to counter Russian and Chinese designed weapons used by China and Pakistan

Summachar’s Coverage: China Deploys Sea-Drones Near Subcontinent; Tries To Play Big Brother With SAARC

In recent times, Indo-US weapons deals have significantly helped Indian armed forces to increase their deterrent power. The US-made Chinook, Apache, Remo Helicopters, Harpoon Missiles, and Torpedoes could prove to be critical weapons for India. Since 2017 the US has cleared sales of 10 weapons requested from India, roughly worth $7.85 billion.

Curiopedia
  • Torpedo is a cigar-shaped, self-propelled underwater missile that can be launched from a submarine, surface vessel, or airplane and is designed for exploding upon contact with the hulls of surface vessels and submarines.
  • The word torpedo comes from the name of a genus of electric rays. Robert Fulton introduced the name to refer to a towed gunpowder charge used by his French submarine Nautilus (first tested in 1800) to demonstrate that it could sink warships.
  • The Howell Automobile Torpedo was the first self-propelled torpedo produced in quantity by the United States Navy, which referred to it as the Howell Mark I Torpedo.
  • In 2019, for the first time, India exported its missiles. Southeast Asian nations and Gulf nations were the first buyers.

Indo-US Ties: Decoding the Deals, Unpacking the Synergy

Indo-US ties

Donald Trump on his maiden visit to India signed 2 important Memorandums of Understanding (MoUs), a Letter of Cooperation, and the much anticipated Defence Deal worth $3 billion. Both countries also committed to combating terrorism, narco-terrorism, human trafficking, and cybercrimes. There is also a proposal for a joint mission between NASA and ISRO to make a dual-frequency Synthetic Aperture Radar satellite. The deals have not come in isolation and history is embedded in each.

Crux of the Matter

MoU on Mental Health
Compared to US, India does not have a developed environment to cater to mental and emotional issues. It is important that Indians start understanding mental issues as healthcare issues so that culture, like that of US, of research, training, and treating emotional issues is developed in India. Mental health issues in India have burgeoned from 3% in 1990 to 6% in 2013, as per the Lancet report. The report also stated that most cases in India are not reported as Indians do not prefer to seek treatment for emotional and mental disorders.

From the Indo-US MoU pertaining to Mental Health, India will benefit from the American experience in the field of mental health, whereas US will be able to do a keen study on traditional Indian medicines and therapies and use it towards developing a better cure for mental issues.

MoU on Medical Products
An MoU on ‘Safety of Medical Products‘ between India’s Centra Drugs Standard Control and US Food and Drug Administration (USFDA) was signed during Trump’s visit. Indo-US trade of Medical appliances has a long history.

In November 2019, at a time when New Delhi was holding talks with Washington for India’s reinstatement in the Generalized System of Preferences (GSP) program, US had raised the issue of high tariffs on Medical instruments exported to India.

Minister of Commerce and Industries Piyush Goyal, during his three-day visit to the US, had met AdvaMed (American Medical Device Trade Association) President Scott Walker. Reportedly, Walker had, time and again, lobbied with US to urge India to reduce high tariffs on crucial medical devices. In 2018, US Trade Representative (USTR) had asked India to liberalize its tariff policy on medical devices by threating to remove India from GSP.

On Coronary Stents, India had allowed a trade margin policy. However, India looked forward to a mutually acceptable bilateral agreement that would solve issues for both nations – India then was working with the US to reduce high tariffs on Steel and Aluminium. Trump had then said that a deal on medical devices may soon come.

MoU on Safety of Medical Products will not only directly benefit both the nations but also the patients who bear the high cost of it.

Renewed Energy Ties
Letter of Cooperation among Indian Oil Corporation Ltd (IOCL), Exxon Mobil, and Chart Industries Inc, US, for the supply of Liquified Natural Gas (LNG) in India comes at a time when India’s oil import from US has increased to 2,50,000 barrels per day – 10 times of oil import from US in 2018. India started buying crude oil from US as it wanted to diversify its basket of oil imports that constituted majorly of OPEC nations.

In the last year (April – December 2019) itself, India has imported LNG worth $576.28 million from the US, which is India’s fifth-largest LNG supplier. The Letter of Cooperation aims at providing natural gas to untapped parts of India. Chart Industries has an array of experience in manufacturing LNG. ExxonMobil, on the other hand, has expertise in LNG operations – processing, storing, and transporting. IOCL’s nationwide presence would enable these American players to hop on to a deal that goes a long way and renews Indo-US energy ties.

Defence Deal
Strengthening Indo-US military relations, India has decided to buy advanced military American helicopters, AH-64E Apache and MH-60 Seahawk/Romero Helicopters from the US in a $3 billion deal. This deal comes at a time when India is witnessing a strategic shift in its Defense policies after the creation of the post of Chief of Defence Staff (CDS) and diversification of its Defence Arms vendors.

India has well-established military ties with Russia. India’s 62% of arms purchase between the period 2013-2018 came from Russia, with major projects like BrahMos cruise missile program, Sukhoi Su-30MKI program, INS Vikramaditya, and the potential S-400 Triumf deal.

Whereas with the US, India’s defence deals have lobbed up to $20 billion in just more than a decade. In 2017, India acquired the Missile Technology Control Regime Category 1 Unmanned Aerial Vehicles for its Navy from the US. With the signing of deals like Communications, Compatibility and Security Agreement (COMCASA) and Logistics Exchange Memorandum of Agreement (LEMOA), and beginning of joint exercises between the militaries, Indo-US military ties have received a new synergy.

However, US had threatened India with sanctions while it was mulling over the S-400 Triumf missile deal with Russia. US also disliked India’s $3 billion Akula-1 nuclear-powered attack submarine deal with Russia. India now seems to have a say over its foreign policies. At a time when combating radical Islamic terrorism is the need of the hour and when neighbor China is building a strategic partnership with Pakistan through various deals like the Silk Route corridor, and Gwadar Port, India’s geopolitical and military prowess needs to be showcased through developing such strategic ties.

Curiopedia

The Defence industry of India is a strategically important sector in India. With a strength of over 1.44 million active personnel, it is the world’s 2nd largest military force after People’s Republic of China. India has the world’s largest volunteer military of over 5.1 million personnel. The total budget sanctioned for the Indian military for the financial year 2019 is $60.9 billion. Despite having a modest internal defence industry, India is the largest arms importer in the world, with most of its high-tech, high-value equipment such as aircraft, ships, submarines, missiles, etc. coming in from Russia. 12% of worldwide arms exports reach India. India domestically produces only 45% to 50% of defence products it uses, and the rest are imported.

India’s track record as an arms exporter has been modest due to export restrictions on the manufacturing organisations like OFB. OFB exports Arms and Ammunition, Weapon Spares, Chemicals & Explosives, Parachutes, Leather and Clothing items to more than 30 countries worldwide e.g. Thailand, Malaysia, Indonesia, Sri Lanka, Bangladesh, Germany, Belgium, Turkey, Egypt, Oman, Israel, Kenya, Nigeria, Botswana, Chile, Suriname and USA. In March 2011 New Delhi agreed to sell its first indigenously designed and built multi-role offshore patrol vessel (OPV) named Barracuda, to Mauritius. More Info