You are here

Trump's India boom: Towers go up fast as projects slow elsewhere

[HONG KONG] In western India, a pair of shiny black Trump buildings with gold insignia tower over the city of Pune. In nearby Mumbai, a 75-story Trump skyscraper will be one of the tallest in the megacity. In a swanky suburb of Delhi, two Trump partners have big plans. And in Kolkata, a new Trump tower is under way.

Three years after Donald Trump arrived on his private jet for a deal-making tour, India has become the only major developing country where his business is roaring. It has the most construction projects with Trump licensing deals of any country outside of the US.

After his election, Mr Trump abandoned a number of international projects and promised not to engage in new foreign deals that could trigger conflicts of interest. With the Indian deals struck earlier, his company is barreling ahead. While in office, Mr Trump has been building a strong bond with Prime Minister Narendra Modi-as his company builds ties with some partners who have faced legal troubles.

Modi was one of the first to visit Trump after he took office and invited daughter Ivanka to lead a delegation to a business summit in November. All of this has raised fresh questions about whether Trump Organization's deals with politically-connected foreign tycoons could put his interests ahead of the nation's and entail special treatment by foreign authorities.  India is a key US ally in Asia and its rivalry with both Pakistan and China fosters many areas where Mr Trump and Mr Modi need each other-nuclear weapons, anti-terrorism, Afghanistan and trade, among others. So far, Mr Trump doesn't seem to have spared India in policies ranging from visas for technology workers to the Paris climate accord. Still, the risk that he might let his business interests outweigh national needs-or that Mr Modi might cut him a break on taxes or permits in exchange for policy tweaks-remains a big concern for government ethics experts in the US. A spokesman for Mr Modi did not respond to repeated requests for comment.

Market voices on:

Asked about potential conflicts in India, the Trump Organization said it's "very proud of the success we have achieved in that market with five active properties under various stages of development." The White House referred questions to the Trump Organization.

Mr Trump's Indian partners Atul and Sagar Chordia celebrated the US victory by flying immediately to New York to congratulate the president-elect, increasing congressional calls for Mr Trump to divest his businesses. He opted instead to hold onto his assets and hand management to his two older sons.

Whatever concerns have been raised in the US regarding the blending of business and policy, Mr Trump's election seems only to have increased the value of his brand in India, though some voices in the Indian press have begun to question the effects of politics and well-publicized conflicts of interests on his brand. Here, political ties have long been the fastest route to get approvals for big projects. Only Afghanistan is more burdensome when it comes to dealing with construction permits, according to a ranking of 186 nations in the World Bank's 2017 Doing Business report.  In fact, the link between construction and politics is so tight in India that research by political scientists Milan Vaishnav and Devesh Kapur shows that cement consumption declines in the lead-up to state assembly elections because firms redirect cash from construction to campaigns.

"No one in India would think twice about him being engaged in politics on the one hand and real estate on the other," said Mr Vaishnav, senior fellow at the Carnegie Endowment for International Peace. "It's an open secret that to be successful in Indian real estate, you have to be well connected in politics."