With the exit of Britain from the EU, it is unsure if globalization
is retreating or whether it may be entering a different phase. One thing may be
for certain, globalization as we know it is over. Many experts agree with this
statement including the former head of the Federal Reserve Bank Alan Greenspan.
With the unexpected rise of Donald Trump in the USA who promises to bring jobs
back to American shores and to deport millions of immigrants and stop new ones
entering the US, it looks like there is a great deal of backlash against
globalization today.
More recently a new bill has been introduced in the US congress
with the intend to put heavy restrictions on a companies’ ability to employ
workers under H-1B and L-1 visas. The vast majority of Indian IT companies rely
on their employee’s ability to qualify for these visas in order for them to be
able work in the US. For most IT companies in India, their primary revenue
model requires them to send their employees to the US under these two visa
categories, the possibility of not being able to do so in the future may be the
worst news they’ve heard this year.
Actually this is bad news for Indian IT workers and companies,
though the bill has a long way to go to actually become a law, the fact that
there seems to be a backlash against immigrants first in Britain and now seemingly
in the US portends badly for the future of globalization. If this backlash
grows, it could prove deadly for the Indian economy and real
estate in Ahmedabad and in other large Indian cities.
Even though real estate in
Ahmedabad is the least likely to be directly affected by a slower IT
sector in the country, it may in fact be very highly impacted indirectly.
Bangalore the jewel in the country’s IT crown, shall be affected should such a
bill pass yet it has an economy that is still resilient enough to adapt and
perhaps with innovation move up the value chain while seeking other non US
overseas markets.
Of the largest and most important real estate destinations in
India, Ahmedabad may be the least important. The domino effect of collapsing
demand across the country due to lower inflows of foreign capital could in the
long run impact Ahmedabad’s economy and the price of property
in Ahmedabad more acutely than it would other large metro cities
which are largely far more interwoven globally with large international markets
than is Ahmedabad. In the long run the result could be fewer launches of new
projects in Ahmedabad and declining prices of existing developments.
All however is not lost, a similar bill was introduced in the US
legislature 6 years ago but failed to become the law of the land and as yet it
is highly uncertain whether the current proposed bill would pass both
legislatures and be approved by the executive. However the last time such a
bill was proposed there was little standing in the way to impede the growth of
globalization whereas today it may appear that either globalization is
retreating or perhaps has reached it end.
