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.