In Trump’s trade war, Indian students in US become collateral damage

While corporate leaders in Mumbai and pro-government economists in New Delhi fantasise about ‘opportunities’ for India in Donald Trump’s global tariff wars, inadequate attention is being paid to the collateral damage to one of the popular economic reforms in India by the United States president’s culture wars.

Tens of thousands of Indian parents — from the middle class to the super-rich — and their aspirational children are seeing their ‘American dream’ vanish because of large-scale revocation of valid student visas and the Trump administration’s threats against universities, especially the Ivy League. Thousands of parents and their equally aspirational children had already been hit hard by the recent diplomatic spat between India and Canada. This, combined with adverse changes in Canadian rules on study visas, significantly reduced the intake of students into Canadian universities.

A massive escalation in Indian students enrolling in foreign universities was a consequence of the economic reforms which came after the late Manmohan Singh, as finance minister, took steps to overcome this country’s grave foreign exchange crisis in the early 1990s. The Atal Bihari Vajpayee government followed up on Singh’s reforms, and in 1999, enacted a law which allowed external remittances up to $250,000 a year for studies abroad. Money was also made available for medical treatment and several other purposes.

In the decade that followed, students left India in droves, taking advantage of the ‘Liberalised Remittance Scheme’. The United Progressive Alliance government’s poorly conceived efforts to bring foreign universities to India were a monumental failure. Australian, American, and other universities from the Anglo-Saxon world, set up campuses, instead, in Abu Dhabi, Dubai, and Doha. These locations offered them niche facilities, while India’s red tape and bureaucracy erected barriers to foreign entry into education. Indian students did not go to the Gulf, but chose universities in the US, Canada, and the United Kingdom in that order of preference.

The proverbial Sword of Damocles, now hanging over the heads of Indian students in the US in the form of deportation, is a human tragedy without precedent in the history of India-US relations. The Indian embassy in Washington estimates that currently there are about 300,000 compatriot students enrolled in US universities. Their parents, for the most part, facilitate their annual expenses of at least $8 billion (about Rs 68,000 crore). A substantial portion of this money goes out of India through the Liberalised Remittance Scheme. For those students whose study visas are revoked and must leave the US without completing their degrees, a colossal amount of money would have been wasted. Besides, their careers and future are at risk. If big leaps in India’s exports are now threatened by Trump’s tariffs, equally — if not more — blighted is the future of a generation of bright, young Indians.

The plight of these students is somewhat reminiscent of that of labourers, who left India’s shores for the Gulf in search of El Dorado in the 1970s and 1980s in the wake of the oil boom there. Lakhs of blue-collar job-seekers fell victim to unscrupulous recruiting agents. Middlemen took the life savings of these labourers and abandoned them once they were brought ashore in the petrodollar sheikhdoms on dinghies and dhows, often without documentation. The difference is that families of Indian students in North America are mostly well-off, unlike Gulf-bound labourers who sold or mortgaged all their possessions to seek a better life. But the human tragedy in both cases is similar.

Randhir Jaiswal, spokesperson of the Ministry of External Affairs (MEA), said, on April 17, that its embassy and consulates in the US “are in touch with the students to provide support. We are looking into the matter.” To the extent it is helpful, a network exists at the Indian mission and posts to quickly get in touch with Indian students from coast-to-coast and at least give them comfort that MEA’s diplomats are ready to hold their hands. This network was put in place by then-Ambassador Taranjit Singh Sandhu when the COVID-19 pandemic wreaked havoc in US campuses. But that may not be enough to save current Indian students from a US administration which has run amok on immigration matters.

The irony is that the Trump team is cutting the very branch it is sitting on, so to speak. Last year, education was the 10th biggest US export, according to the government’s Bureau of Economic Analysis. International students contributed at least $40 billion to the US economy and sustained an estimated 368,000 American jobs. Like many of the new White House initiatives, expelling Indian — and other international — students can only be counter-productive.

K P Nayar has extensively covered West Asia and reported from Washington as a foreign correspondent for 15 years.

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.