JPMorgan Chase & Co. sees India as a "bright spot" in the midst of a tough global economic environment, courtesy of its strong domestic growth and relatively modest dependence on exports, bank senior Asia Pacific executive Sjoerd Leenart said.
“Sure, it has its share of issues — the tariffs, now the H1B visa issues. But overall it has a strong hand to play,” Leenart said in an interview with Bloomberg Television in Mumbai, where the bank is hosting its annual India conference. The Wall Street bank believes India can navigate the tariff challenges, “and will land in a good place,” he added.
The US has expressed disapproval of India's trade of oil and defence with Russia as a "threat to the foreign policy and national security of the United States." Further, President Donald Trump has threatened an increase in tariffs on nations imposing digital taxes.
Statistics from the Global Trade Research Initiative (GTRI) indicate that India exports approximately $86.5 billion worth of goods to the US on an annual basis. Of this, approximately $60.2 billion, or 66%, is subject to the 50% tariff. Another $3.4 billion in automobile parts is subject to the 25% tariff, while $27.6 billion — primarily pharmaceuticals, electronics, and petroleum — is duty-free.
GTRI founder Ajay Srivastava forecasts exports from the affected industries could decline by 70%, falling to $18.6 billion from $60.2 billion. Total dispatches to America could decline by 43%, putting in danger half a million jobs in India's export hotspots. India has already felt the effects of US policy shifts, with a 25% retaliatory tariff doubled as a result of buying Russian oil. At the weekend, the nation encountered another hurdle after Trump put in place a $100,000 entry fee for fresh H-1B visas, a program where Indians constitute over 70% of beneficiaries.
Although the entire impact of the new H-1B policies has not yet been established, Leenart took comfort in knowing that the fee does not encompass current H-1B visa holders.
Global finance and technology companies are quickly growing their global capability centres in India, attracted by the nation's profound pool of talent and cost benefits. While Trump's actions are designed to safeguard US jobs, managers warn that the policy has a potential risk of raising the cost for American businesses, and possibly hasten investment in these Indian centres.
JPMorgan takes advantage of India's big pool of talent but, Leenart says, cannot offer anything on the impact of the new visa regulations on its technology hubs. The bank has been expanding its onshore presence in investment banking, corporate banking, and custody operations, adding 20% to its employee strength over the last two years.
JPMorgan's activities in India include commercial and investment banking, asset management, payments, and securities services. Its corporate offices in Mumbai, Bengaluru, and Hyderabad facilitate global technology and business operations with more than 55,000 staff.
During another Bloomberg interview, JPMorgan's global head of advisory and M&A, Anu Aiyengar, pointed out that the firm is lining up more initial public offerings in India than any other market. She pointed out that the size of this year's IPO market may beat the previous year's. "I would not put a limit based on last year, this is a growing market," she said.
India has been one of the most dynamic international markets for new stock issues.
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