Trump Brand Carries Cachet In India, And Now More Scrutiny

Dec 6, 2016
Originally published on December 16, 2016 11:48 am
Copyright 2016 NPR. To see more, visit http://www.npr.org/.

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President-elect Donald Trump has suggested he will be leaving his business to avoid any conflict of interest arising from his global enterprises. But no matter who heads up the family firm, it is likely to reap benefits. NPR's Julie McCarthy has been looking into Trump's economic interests in India and what the future president and property developers there stand to gain and lose.

JULIE MCCARTHY, BYLINE: On a four-hour drive from Mumbai to its sleepier sister city, Pune, billboards beckon India's newly monied with visions of infinity pools, palatial homes and exclusivity. Mumbai's luxury units average $1,000-a-square-foot. Pune, the site of Trump's first standing project in India, seems like a bargain at $250-a-square-foot.

SONALEE CLOUDHARI: It's done very tastefully. There's an open feel to it. It's not cluttered. It goes with the whole Trump theme.

MCCARTHY: Sonalee Cloudhari guides me through the model unit inside one of the two 23-story glass towers in Pune that bear Trump's named. A showcase of toney Italian imports, it exudes earth tones understatement, all 6,000 square feet of it. Price tag - 1.5 to $2 million. Sheetal Sagar Surywanshi rents her own floor for nearly $6,000 a month from an A-list Bollywood star.

How high are these ceilings?

SHEETAL SAGAR SURYWANSHI: Much better than the Indian standard. Master bedroom.

MCCARTHY: Heels clicking on the Italian marble floor, she peeks in on her sleeping children as she talks me through the amenities. Surywanshi, a 35-year-old who cruises around town in a red Rolls Royce and says she deals in land, didn't think twice about the high rent.

SURYWANSHI: The amenities, modern technology, very close to American taste. Mr. Trump has designed it so well, like, everything is at its place. I just had to move in.

MCCARTHY: While the Trump name - stylish and in gold - appears on the project, he has put no money into these properties, says developer Ramesh Jogani, who is familiar with how Trump works. Instead, he says, the property developers pay the Trump Organization for the use of the Trump name as an enticement to buyers because to many, Trump's brand means quality.

RAMESH JOGANI: So as a developer, you'll see there's no skin in the game. There's very little involvement in the whole process of building. But as a buyer, he believes Trump would only lend his name if he felt everything was in place. So it lends credibility to the project.

MCCARTHY: Jogani says each of these brand licensing agreements has the potential to earn the Trump Organization at least several million dollars. He says they also allow Trump to enter the market to learn at no real risk. The costs are borne by the Indian partners. But if it was worth it before, an association with Trump now counts more than ever, even with the president-elect expected to separate himself from his business. Mumbai property consultant Gulam Zia.

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

MCCARTHY: The Pune property developers flew to the States to congratulate their partner a week after he won the election. In a widely-circulated photo, they can be seen beside the victor in Trump Tower giving the thumbs up. The developers seemed unprepared for the storm of publicity that followed. Trump's Pune collaborator, Atul Chordia, declined to be interviewed on tape and would communicate only through 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, Trump's partner in Mumbai, is not only a property magnate but the vice president of the state's BJP party, the most powerful in the country. Such connections could be used to cut corners and risk the appearance of favoritism. Chandrashekhar Prabhu, former head of the state of Maharashtra's Housing Authority, says developers clearly influence the process of decision making.

CHANDRASHEKHAR PRABHU: Every political party has their own set of property developers. And there is a complete nexus between them.

MCCARTHY: With an army of laborers work, on the 75-story Mumbai Trump Tower is under way, with half the units already sold. The president-elect has three other projects - two in the national capital region and one in Calcutta. Indian property development requires permits from 17 to 30 different agencies. Analysts say therein lies the potential for corruption. Mumbai-based developer Vikas Kasliwal says the hazard wouldn't be so great if Trump's business was in an industry that didn't require a lot of interaction with regulators.

VIKAS KASLIWAL: The real estate industry on the other hand is filled with regulation and filled with regulatory intervention and filled with the need to have blessings of regulators.

MCCARTHY: With Trump now President-elect, Kasliwal suggests those blessings would not be hard to come by. Even if his children run Trump's affairs in India after he steps aside, Kasliwal says they should tread lightly.

KASLIWAL: No Indian regulator would refuse to meet with Donald Trump, Jr. 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.

MCCARTHY: Neither the Trump organization nor the transition team has responded to requests for comment. Gulam Zia, meanwhile, expects intense scrutiny of anyone partnering with Trump's firm in India.

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

MCCARTHY: Julie McCarthy, NPR News, Mumbai. Transcript provided by NPR, Copyright NPR.