Why the world's largest bank thinks India can thrive despite Trump's trade, visa blows
India has a particularly strong hand with its young population, domestic consumption, and a steadfast government, says a top JPMorgan executive.
MUMBAI : US President Donald Trump’s trade tariffs and sudden changes to the H-1B visa process are just friction points in India's growth trajectory, given the country's young population and strong consumption drivers, according to a senior JPMorgan executive.
“They're just speed bumps. Growth is never a linear, straight line. There's always going to be bumps along the way," Sjoerd Leenart, chief executive officer and head of banking for Asia Pacific at JPMorgan, told Mint in an interview.
He said India has a particularly strong hand with its young population, domestic consumption, and a government that is consistent in its policy. “These are the India decades," added Leenart, who visited the country to speak at the 10th India conference of the world's largest bank by market capitalization earlier this week.
Trump’s second term hasn’t been conducive to the world's fifth-largest economy so far. On 27 August, the US administration imposed an additional 25% tariff on Indian goods for buying Russian oil, taking the total levy to 50%. Then came the surprise $100,000 fee on fresh work visas, with Indians slated to be impacted the most.
The US policy changes have kept people and businesses on their toes.
“The hallmark of a great economy is consistency of leadership, consistency of policy, and I think we used to associate that with the developed world having a lot of that and the developing world having less of that," said Leenart.
Over time, he said, it has changed a little bit because the political shifts in the western world have been quite quick, and that has led to some changes in direction of some of the governments. “The historical divide between the developed and the developing world is kind of converging a little bit, and in that context I think India stands out actually," he said.
India's draw
In August, India reformed the indirect tax system, rationalizing the goods and services tax (GST) slabs to 5%, 18%, and 40% and moving several product categories to lower rates. Despite the cuts, the government believes the potential consumption boom will allow it to retain the budgeted fiscal deficit target of 4.4% for 2025-26.
The GST overhaul, ahead of the festive season, is expected to boost consumption and somewhat offset Trump’s curveball.
“There are uncertainties for every country, including for India, but the fundamental secular trends that are happening in the country are very positive," said Leenart. “There is good policy, tax changes, infrastructure, and ease of doing business initiatives. You've got a young population, a good educational system, and a liquid equity market."
He said JPMorgan has been adding people in India, be it in its global capability centres (GCCs) or in the banking and investment banking divisions. A majority of its India headcount is across its four GCCs, employing 55,000 people.
A host of multinationals have set up GCCs in the country that are touted to conduct more advanced businesses than just coding and provide millions with employment. A February report by IT industry body Nasscom said that with over 1,800 GCCs employing 1.9 million professionals, India’s GCC sector is projected to grow from $64.6 billion in 2024 to $110 billion by 2030.
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