Trump’s India offensive could unsettle Modi government with political turbulence in Bihar, Andhra Pradesh

Whichever way political scenarios unfold in Bihar and Andhra Pradesh, Donald Trump has managed to introduce uncertainty and unpredictability into India’s domestic politics

United States President Donald Trump’s strategic moves against India — 50% punitive tariffs, hiking the H-1B visa fee to $100,000, and revoking the waiver on sanctions against Indian participation in managing Iran’s Chabahar port — can potentially destabilise the Narendra Modi government.

There is also the looming prospect of the Halting International Relocation of Employment Act, introduced by a close Trump ally, Republican Senator Bernie Moreno. It seeks to impose a 25% tax on payments made by US companies to BPO (business process outsourcing) companies abroad and ban tax deductions for outsourcing-related expenses.

These moves can spell political trouble domestically for Modi, especially with political allies — Nitish Kumar of the Janata Dal (United) and N Chandrababu Naidu of the Telugu Desam Party (TDP).

The Modi government — with only 240 seats of the Bharatiya Janata Party (BJP) — cannot do without the support of the TDP’s 16 seats and the JD(U)’s 12. The 25 MPs from smaller parties in the NDA will not help the Modi government survive if both the TDP and JD(U) were to withdraw support.

Trump’s moves will impact the politics of both Bihar and Andhra Pradesh. The impact of Trump’s steep tariffs on export-driven MSMEs can trigger a migrant crisis for Bihar as many MSME units close down or downscale in Tamil Nadu, Gujarat, and Maharashtra. Bihari migrants working in the textile, diamond, and other MSMEs in these States will be forced to return home.

After years of well-paying, skilled jobs in other States, the returnee migrants will be competing for the same low-end jobs as those they had left behind. They will also be competing for the same government welfare schemes, creating social tensions and a new hierarchy of grievances.

The new slogans of the Opposition suggest that they are already reframing their election narratives to reflect this new reality. The Congress has already added ‘rozgar chor’ (employment thief) to ‘vote chor’ (vote thief) when speaking of the ruling (BJP)-JD(U) coalition in Bihar. Allegations of the alleged job theft will not only speak to growing unrest among the unemployed youth, but also to the returnee migrants.

Bihari youth go for diamond polishing in Surat from Siwan, Gopalganj, Saran (Chhapra), Madhubani, Darbhanga, Muzaffarpur, and Vaishali; from Banka, Bhagalpur, Kishanganj, Katihar, and Purnia for textile work to Tirupur and leather work to Ranipet; and from Samastipur, Begusarai, Araria, Sitamarhi, and Motihari (East Champaran) for urban logistics (e.g., food delivery, courier services), construction-linked supply chains, warehouse operations, and transport network and supply chain work to Mumbai, Delhi, and Bengaluru. Bihar ranks second highest in outmigration within India, contributing to a large share of migrant workers to Maharashtra, Gujarat, Tamil Nadu, Punjab, and Delhi.

Kumar does not have the wherewithal to create employment and reintegrate returnees into the economy. Mere announcements for expanding MNREGA or the even more tantalising financial prospects from Bihar being granted ‘special status’ by the Centre may not prove effective.

Under these circumstances, the post-election scenario in Bihar could create a major political dilemma for Kumar. If the ruling coalition wins and Kumar is denied chief ministership, it could trigger a withdrawal of support to the Modi government, in the name of defending Bihar’s dignity and federalism.

If the ruling coalition loses, Kumar could frame it as a failure of Modi’s foreign policy, and despite his failing health, may reposition himself as an independent federal leader for 2029. In any case, he will have to be incentivised to stay on in the NDA, at rebuilding his party and substantially greater power-sharing at the Centre.

In Andhra Pradesh as well, Trump’s targeting of India will destabilise the political ground for the Modi government.

The steep H-1B visa fee hike from $1,000 to $100,000 has effectively blocked immigration to the US, shattering Telugu aspirations. India receives about 73% of all H-1B visas — 62,000 of about 85,000 granted globally. Of these, more than 50% are accounted for by Andhra Pradesh and Telangana — nearly 35,000, quite disproportionate to their share in India’s population.

Besides the direct H-1B visa route to the US, Telugu students comprise 56% of all Indian students going to the US for higher studies on F-1 visas. They hope to subsequently transition to an H-1B status through the Optional Practical Training route, where diaspora networks play an important role. This route will also be blocked because of the H-1B visa fee hike and stricter wage requirements.

The blocking of the ‘American Dream’ and the return of young Telugu men and women after the heavy investment made by their families to give them a US education could trigger disaffection among their families. It will not take much for disillusionment to turn into political anger which could singe Naidu, especially in those districts — in coastal Andhra — which have strong engineering education infrastructure and a strong culture of migration to the US helped along by pre-existing diaspora networks.

To stave off the erosion of his image as champion of the tech diaspora, Naidu may also try to channel middle-class anger against the Centre and blame the Modi government for the crisis. Given Naidu’s history of changing alliances based on local sentiments, personal branding, and national optics, he can easily go from being an ally of the Modi government to a challenger — especially if there is a middle-class and a Telugu diaspora backlash.

Still, much could go wrong with this scenario.

Modi might be able to pull off a deal with Trump to soften the H-1B blow, compromise on Russian oil imports, and give tariff concessions to the US. If that works, Naidu will desist from any precipitate action. He is aware that he lacks pan-Indian charisma and would not be able to position himself as the champion of the Opposition.

Modi could offer financial incentives for US companies to set up Global Capability Centres (GCCs) in Andhra Pradesh, as well as tech partnerships. Andhra Pradesh is already aggressively courting US and European firms to set up GCCs in Visakhapatnam, Amaravati, and Tirupati, allowing foreign companies to directly operate in India, bypassing the H-1B requirement.

Whichever way political scenarios unfold in Bihar and Andhra Pradesh, Trump has managed to introduce uncertainty and unpredictability into India’s domestic politics.

Bharat Bhushan is a New Delhi-based journalist.

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