Trump and Modi Hand-in-Hand on Border Security at U.S. Rally

(Bloomberg) -- President Donald Trump endorsed India’s need for “border security” at a rock concert-like event in Houston with Prime Minister Narendra Modi, whose government seeks to expand its control of the disputed territory of Kashmir.

Sharing a stage in Houston and later walking hand-in-hand around a football stadium, Trump received Modi’s endorsement in front of more than 50,000 Indian Americans -- an influential voter base.

Modi used Sunday’s event to rally his supporters, show off his closeness with the U.S. president and take aim at India’s rivals, which notably include Pakistan. While analysts expect the joint appearance to ease recent trade tensions between the U.S. and India, it’s also being seen as the president’s attempt to gain support of affluent Indian American voters ahead of next year’s elections.

In a speech that risks being viewed as siding with India in its dispute with Pakistan, Trump pledged expanded military cooperation with India, talked about the need to fight terrorism -- language Modi echoed soon after in an apparent swipe at Pakistan -- and called for more border security, drawing huge cheers from the raucous crowd.

“Border security is vital to the United States. Border security is vital to India, we understand that,” Trump said. He pledged to fight “radical Islamic terrorism” and insisted: “We must protect our borders.”

Kashmir Tensions

While Trump didn’t explicitly endorse Modi’s moves in Kashmir, which have inflamed tensions with neighboring Pakistan, his remarks could be interpreted in Islamabad as signaling U.S. support.

Modi in August scrapped seven decades of autonomy in the Muslim majority state of Jammu and Kashmir, prompting Pakistan to downgrade diplomatic and trade ties with India. Foreign Minister Subrahmanyam Jaishankar said last week that India ultimately expects to rule over the entire state of Kashmir.

Modi told the crowd, “People have put their hatred of India at the center of their political agenda. These are people who want unrest. These are people who support terrorism and nurture terrorism.”

Without naming a country, Modi rhetorically asked who was responsible for the 2008 terror attacks in Mumbai and the 2001 attacks in the U.S. “You know them, very well,” Modi said. “You know who they are. It’s not just you, the whole world knows who they are.”

The Mumbai attackers were Pakistanis, while several key figures in the Sept. 11 attacks, including Osama bin Laden, were killed or captured in Pakistan.

Lavish Praise

Trump’s remarks followed a speech by Modi in which he lavishly praised the U.S. president, echoing Trump’s 2016 campaign slogan, saying that “he has already made the American economy strong again.”

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Indians form about a fifth of 20 million Asian Americans and are often more educated and earn more than other immigrant groups, the Washington-based Pew Research Center found. About 65% of Indian Americans were Democrats or leaned toward the Democrats, according to a 2014 Pew Research paper. That didn’t stop the Republican president from getting loud cheers in the arena, especially when he addressed issues such as security.

Trump responded with praise for Modi’s economic leadership, saying he was at the event to express his “profound gratitude” to the nearly 4 million Indian Americans in the country. He also said the U.S. and India would boost trade, conduct joint military exercises and even team up in space exploration.

The event is likely the largest in the U.S. for an elected foreign leader. Texas is Modi’s first stop in a week-long U.S. trip, where he hopes to win a better trade deal and convince investors that his government is capable of shoring up India’s slowing economy.

Economic Incentives

Modi’s earlier outings to address Indians in New York, London, Sydney and Toronto have been high-octane affairs, with chanting crowds and song-and-dance shows in sold-out stadiums. Texas was exactly that.

The Indian government announced $20 billion worth of tax incentives just before Modi traveled to the U.S., cutting corporate rates on par with the lowest in Asia. The move could help Modi pitch for a better trade deal, more investments from the U.S. corporations he is scheduled to meet with in Houston and New York and resurrect his credentials as a business-friendly leader at a time when the Indian economy is growing at its slowest pace since March 2013.

“Based on his first term, investors expected Modi to embark on a series of reforms, which have not been realized,” said Akhil Bery, South Asia analyst at risk consultancy Eurasia Group. The tax announcement “is a great signal for him to make his pitch to investors to come invest in India.”

Foreign Investment

Modi will be addressing the Bloomberg Global Business Forum Sept. 25, which will be attended by 40 major companies, including Lockheed Martin Corp (NYSE:LMT)., American Tower Corp (NYSE:AMT)., Mastercard Inc (NYSE:MA). and Walmart (NYSE:WMT) Inc.

India attracted $3 billion in foreign direct investment from American companies last year, the fourth-largest investor grouping in the $2.6 trillion economy.

The cropped tax rates were the latest in a series of steps announced by his government -- including easier foreign investment rules for companies from Apple Inc (NASDAQ:AAPL). to Huawei Technologies Co. to BHP Group Plc -- to revive economic growth.

“These moves seem to have been made keeping in mind Modi’s domestic base,” said Kashish Parpiani, fellow at the Observer Research Foundation. “To prove that Modi is paying attention to the economy at a time when it seemed like foreign policy and events like ‘Howdy Modi’ had taken central stage.”