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In India, Trump's Business Interests Raise Anticipation And Questions

Dec 6, 2016
Originally published on December 7, 2016 2:49 am

The Trump Organization has more interests in India — at least five — than anywhere else outside North America. With an ever-increasing taste for luxury, India offers the Trump brand a lucrative market, no matter who runs the company after President-elect Donald Trump separates from his global enterprises, as he's said he would do.

While Mumbai real estate prices average $1,000 per square foot for exclusive living, a four-hour drive away, past billboards beckoning the newly moneyed with images of infinity pools and palatial homes, luxury apartments in Pune seem like a bargain at $250 a square foot.

An automotive manufacturing and IT hub, Pune is the site of Trump's first standing project in India. The interior designer for the twin 23-story glass towers that bear Trump's name — one residential, the other for offices — offers a tour through the showcase apartment.

Sonalee Choudhari, as elegant as the units she furnishes, says, "It's very tastefully done" and in keeping "with the Trump theme." Airy and decorated with tony Italian lighting fixtures and leather lounge chairs, the flat exudes earth-tone understatement, all 6,000 square feet of it. Price tag: $1.5 million to $2 million.

Several stories above, Sheetal Sagar Surywanshi rents her own floor — for nearly $6,000 a month — from an A-list Bollywood star. Heels clicking on the Italian marble floor, Surywanshi sweeps past large bedrooms, peeking in on her sleeping children as she talks me through the amenities, from the high security to a sumptuous spa.

The website of this Trump property boasts a concierge service called Quintessentially, which it claims once delivered "a metal detector up the French Alps to help a member who had lost his house keys in the snow."

Surywanshi, 35, who cruises around town in a red Rolls-Royce and says she "deals in land," didn't think twice about the high rent. "The amenities, modern technology, very close to American taste. Mr. Trump has designed everything so well that everything is at its place. I just had to move in," she says.

While the Trump name — in gold — graces the project, he has put no money into these properties, says Mumbai-based developer Ramesh Jogani, who at one time met and discussed business with Trump. Instead, Jogani says the property developers pay the Trump Organization for use of the Trump name as an enticement to buyers — because to many, Trump's brand means quality.

"As a developer, you see no skin in the game; there's very little in the involvement in the whole process of building," Jogani asserts. "But as a buyer, [you believe] that Trump would only lend his name if everything was in place. It lends credibility to the project."

Jogani also says each of these Indian brand-licensing agreements has the potential to earn the Trump Organization at least several million dollars. They also allow Trump to enter the Indian market to learn at no real risk, he says. The costs are borne by his Indian partners.

But if it was worth it before, an association with Trump now counts more than ever. Even with the president-elect announcing that he intends to sever ties with his businesses, Gulam Zia, based in Mumbai with the global property consultancy Frank Knight, says the Trump brand will be irreversibly amplified. His name will be visible on the buildings.

"The whole additional interest will be because that brand today is the president-elect of the United States," Zia says. "I'm sure there'll be a beeline for other interested developers to draw the same benefit, like what the two or three existing developers are doing."

The Pune property developers flew to the U.S. to congratulate their partner a week after he won the election. In a widely circulated photo on Twitter, subsequently taken down, they could be seen beside the victor in New York's Trump Tower, giving the thumbs-up.

The developers seemed unprepared for the onslaught of publicity that followed.

Trump's Pune collaborator Atul Chordia declined to be interviewed on tape by NPR and would communicate only via text messages, one of which read, "The media is doing negative stories for no reason."

But the projects have attracted attention in part because of the nature of property development in India: It is prone to political entanglement.

The founder of the Lodha Group, Mangal Prabhat Lodha, Trump's partner in Mumbai, is not only a property magnate but the vice president of Maharashtra state's BJP party, the most powerful in the country. Such connections could be used to cut corners, and risk the appearance of favoritism.

Architect Chandrashekhar Prabhu, a former president of the Maharashtra Housing and Area Development Authority, says developers "clearly influence" the process of decision-making.

"Every political party has their own set of property developers, and there is a complete nexus between them," Prabhu says.

Construction is underway at the 75-story, gold-facade Mumbai Trump Tower, with half of the 412 units already sold.

"The consumers here are those who have arrived in life, who have got about $2 million to spare," says Prashant Bindal, Lodha's chief sales officer.

Trump has three other projects underway in India, two in the New Delhi capital region and one in Kolkata.

Indian property development requires permits from 17 to 30 different agencies. Analysts say therein lies the potential for corruption. The hazard would not be so great, says Mumbai-based developer Vikas Kasliwal, if Trump's business was in an industry that didn't require a lot of interaction with regulators.

"The real estate industry, on the other hand," Kasliwal says, "is filled with regulation, and filled with regulatory intervention and filled with the need to have blessing of regulators."

With Trump as president-elect, Kasliwal suggests those blessings would not be hard to come by. Trump's children, for example, are official advisers to his presidential transition team, and he has made no indication they would be removed from his businesses. If Trump's children were also to run his affairs in India, Kasliwal warns they should tread lightly.

"No Indian regulator would refuse to meet with Donald Trump Jr.," he says. "They would love to meet with Donald Trump Jr. But are they actively going to tell people, 'Why don't you bring Donald Trump Jr. to meet me'? They're not. I don't think any mischief can be created, but people could take advantage of perceptions," says Kasliwal.

Neither the Trump Organization nor the transition team has responded to requests for comment.

Gulam Zia, meanwhile, anticipates intense scrutiny of anyone partnering with Trump's firm in India.

"Any permission, any license, any favor that this product attracts because of the brand," he says, "will be noted, magnified, spoken about, debated and fought over in the media."

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Outside of North America, Donald Trump has more projects in India than anywhere in the world. That includes towers of luxury apartments in Mumbai and Pune that bear his name. NPR's Julie McCarthy has been examining Trump's India interests and the risks of potential conflict there. Hi, Julie.


SHAPIRO: Describe these projects. Is the Trump Organization building properties in India?

MCCARTHY: No. Donald Trump is really offering his name on these various Trump Towers. This is not about bricks and mortar. This is a branding exercise, Ari. Trump's name is the brand. And that's what he's selling. It has a reputation for luxury. And Indian property developers want to exploit and associate with that brand.

But there are obvious complications for it now. You know, when your very name is the brand, and you're the president, that brand now assumes a whole new meaning and has the potential for lucrative money making. And Gulam Zia is from one of the biggest property consultants in India. And he put it this way.

GULAM ZIA: The whole additional interest in the brand today will be because of - that brand today is the president-elect of the United States. And that is the conflict of interest.

MCCARTHY: I mean, you know, the entire regulatory framework that deals with real-estate development in India is fraught with the potential for preferential treatment from those people who are in a position to apply pressure or those who simply occupy high office.

SHAPIRO: Give us an example of how this would work. If corrupt individuals wanted to take advantage of a connection between Trump properties and the White House, how would they do it?

MCCARTHY: Well, you know, you're dealing in a world where there's lots of permits and licensing that's required in this real-estate development. So, you know, a quiet nod here or a discreet phone call from a Trump-family representative or even a high-ranking Indian official could benefit Trump's fortunes. And it bears repeating that Trump's children are deeply involved in the business and in the presidential transition.

And their father has given no indication that they're going to be removed. And with that in mind, one developer here that I spoke with said that Trump's children would do well to steer clear of India for the next four years because of the possible appearance of influence peddling. He said, what regulator wouldn't want to meet them?

SHAPIRO: Talk about how this might influence the larger U.S.-India relationship. I mean, if we were to see the Trump family acting in the interests of the brand rather than the interests of the United States as a country, what might that look like?

MCCARTHY: Well, take diplomacy for example. Diplomats negotiate trade deals. Their job is really, in many ways, to smooth the way for U.S. businesses. And that's certainly the case in India. And the former deputy assistant secretary at the Bureau of East Asian and Pacific Affairs told me that diplomats here may feel dissuaded from pursuing other American interests that might disadvantage Trump. And that former official is Michael Fuchs, who says that Trump's business interests put, quote, "giant question marks" over U.S. policy in India. Here's what he says.

MICHAEL FUCHS: My understanding is, right now, the United States and India are in trade talks with one another. What are the terms of those trade talks if they continue during the Trump administration? Are those trade terms or any other policies when it comes to U.S. relations with India intended to help business partners of the Trump Organization or the political parties that many of them are connected with or disadvantage rivals?

MCCARTHY: So diplomatic decisions that could possibly benefit a future President Trump at the expense of other competitors here in India.

SHAPIRO: That's NPR's Julie McCarthy speaking with us from New Delhi, India. Thanks, Julie.

MCCARTHY: Thank you. Transcript provided by NPR, Copyright NPR.