Explained: What US midterm elections mean for India and the world

Americans are set to vote Tuesday in perhaps the most consequential mid-term elections of their lifetime – with the presidency of Joe Biden, the future of his predecessor Donald Trump and the control of both Houses of Congress in the balance.

Though Democrats will be desperate to hold on to their majorities in both Houses of Congress – they have 220 of 435 seats in the House and 50 seats in the Senate plus Vice-President Kamala Harris as tie-breaker – it is Republicans that are clear favourites in the House.

The Senate, meanwhile, could still go either way.

Much has already been written about what control of a single House or both Houses would mean for domestic US politics – but what could the impact be on India the rest of the world?

Let’s take a closer look:

For India

No matter who controls the Houses and the presidency, not much is expected to change for India.

US-India relations enjoy wide bipartisan support among Democrats and Republicans alike, as _IANS c_orrespondent Yashwant Raj noted in his piece.

“The US midterm elections should not have a direct impact on US-India relations,” Richard Rossow, head of the India chair at the Centre for Strategic and International Studies (CSIS), a leading US think-tank told IANS.0

“The relationship does not require regular legislative boosts, so Congress’ impact is normally quite nominal, barring when a ‘big deal’ like civil nuclear cooperation requires legislative support.”

The deal for example, was given impetus by George W Bush and then signed off on by the US Houses of Congress controlled by Democrats, the piece noted. Similarly, a US plan to sell Pakistan F-16s was scuppered during the Obama presidency in 2016 when both Houses were controlled by the Republicans. Further, the Donald Trump administration also did not impose Countering America’s Adversaries Through Sanctions Act (CAATSA) sanctions on India after New Delhi purchased more then $5 billion in weapons from Russia.

New Delhi is likely to rest easy no matter who is in at the helm.

For Ukraine

While the White House has vowed ‘unwavering support’ for Ukraine, Republicans assuming control of Congress could complicate matters for Ukraine.

Remember, it is not the president but US Congress that controls the purse strings of the nation.

Since Russia launched its invasion in February, Congress has approved tens of billions in emergency security and humanitarian assistance for Ukraine, while the Biden administration has shipped billions worth of weapons and equipment from military inventories.

Though Ukrainian defence minister Oleksii Reznikov has said he is confident nothing will change if Congress changes hands, the reality might be far different.

A Republican vs Republican battle over Ukraine might be on the horizon.

While insisting he supports Ukraine’s struggle, McCarthy, who is in line to be Speaker if Republicans indeed take the House, said last month that Republicans will not write a “blank check” for Ukraine if they win back the majority.

“I think people are gonna be sitting in a recession and they’re not going to write a blank check to Ukraine,” McCarthy told Punchbowl News. “They just won’t do it. … It’s not a free blank check,” McCarthy said.

McCarthy’s comments were reflective of his party’s growing scepticism about financial support for Kyiv as a growing number of Republicans, particularly those aligned with Donald Trump’s “America First” approach, question the need for federal spending abroad at a time of record-high inflation at home.

They were also a nod to the isolationist Trump wing of his party.

Remember, it was Trump’s actions in Ukraine that served as the impetus for his first impeachment at the hands of the US Congress.

“Under Republicans, not another penny will go to Ukraine,” conservative firebrand Marjorie Taylor Greene of the Trump wing has vowed.

“I think we’re at the point where we’ve given enough money in Ukraine, I really do. … The Europeans need to step up,” JD Vance, the Republican nominee for Senate in Ohio, another candidate firmly in the Trump corner added. “And frankly, if the Ukrainians and the Europeans, more importantly, knew that America wasn’t going to foot the bill, they might actually step up.”

Speaking to The New York Times, Danielle Pletka, a senior fellow at the American Enterprise Institute and a former Republican Senate foreign policy staff member, said McCarthy’s comment “was just a toe in the water of this growing divide inside the Republican Party between the traditionalist, internationalist wing and the populist, Orban wing of the party.”

On the other hand you have establishment figure hawks like Mitch McConnell and Mike Pence.

McConnell, the top Senate Republican, has vowed to go beyond Biden and fast-track weapons including those with a longer range, while Mike Pence, who was Trump’s vice president, recently took direct aim at critics of arming Ukraine.

“I just see a freight train coming, and that is Trump and his operation turning against aid for Ukraine,” Senator Chris Murphy told MSNBC last month. “House Republicans, if they were to take the majority, being preternaturally against anything Joe Biden is for — including the war in Ukraine — and there being a real crisis where the House Republican majority would refuse to support additional aid to Ukraine.”

All this should send a chill through Kyiv if it hasn’t already.

“The US midterms are one of the factors that have us concerned about the winter,” a senior Ukrainian official speaking to Washington Post on condition of anonymity said.  “Russia will gain an advantage with the new Congress and with Europeans as they blackmail them on energy policy. That’s why the current offensive is so important.”

For Iran

The Biden administration has been desperately trying to restore the Iran nuclear deal.

With talks stalled between the US and Iran and the Biden administration expressing doubt the Iranian regime would be willing to scale back its efforts, Republican control of Congress could prove the death knell.

Republicans in both chambers are eager to press the Biden administration over its policy toward Iran, as per The New York Times. Many Republicans have criticised President Joe Biden for not doing more to support protesters who have been demonstrating for weeks against the country’s clerical regime.

“Republicans are going to put Iran back on the front burner in Washington,” Mark Dubowitz, CEO of the Foundation for Defense of Democracies, a hawkish think-tank told the newspaper.

“Republicans are going to be introducing sanctions bill after bill.”

Under legislation passed by Congress in 2015, the House and Senate can vote to express disapproval of a nuclear agreement with Tehran and block the president’s ability to lift sanctions on Iran’s economy previously imposed by Congress, as per the newspaper.

The return of Benjamin Netanyahu, who had close relations with congressional Republican leaders in Israel, is a further complication.

Netanyahu previously accepted an invitation to address Congress from the Republican speaker, John Boehner, and criticised Obama’s efforts to strike a nuclear deal with Iran – a move that infuriated the White House.

Netanyahu has similarly taken aim at Biden over Iran and may yet again pile on the pressure in concert with the Republicans.

For financial markets

Republican control of Congress may be a good thing for the financial markets.

Historically, when a Democratic White House has shared power with a split or Republican Congress, stocks have seen stronger gains than usual, say experts.

Analysts say a strong performance by Democrats in the elections could lead to increased spending to help the economy that might fuel inflation and leave the Federal Reserve obliged to continue to hike interest rates to get prices under control.

Higher rates put slow the economy by making it more expensive to buy a house, car or anything else on credit, though they take time to take effect. Rate hikes could bring a recession, and they tend to drag on prices for stocks and other investments.

With economists forecasting recessions for many economies as an inevitable side effect of the effort to quash inflation, sharp cutbacks in spending might hurt, rather than help, some analysts say.

“On the one hand, the prospect of less spending could be viewed as aiding the inflation fight but on the other, the economy could be headed for recession, and inaction in government won’t help the situation," Craig Erlam of Oanda said in a report.

With inputs from agencies

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