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  • India conveys dismay to US over protectionist measures

    Published on September 23, 2010

    India on Wednesday expressed its dismay over US protectionist measures like hike in visa fee for professionals and “ill-advised” ban on offshore outsourcing of government business by the Ohio state.

    The country’s displeasure was “firmly” conveyed at the meeting of the bilateral Trade Policy Forum (TPF)co-chaired by Commerce and Industry Minister Anand Sharma and US Trade Representative Ron Kirk in Washington.

    “We have put it firmly in our discussions. I feel that the US has seriously registered India’s viewpoint as well as concerns of the Indian IT industry. We do hope there will be timely and appropriate responses,” Sharma told reporters after the TPF meeting.

    The TPF is the key trade dialogue platform between the two countries.

    Citing the example of the recent Airtel-IBM deal, Sharma turned the table on the US, stating, “Airtel, an Indian company, has placed orders of USD 3.5 billion on IBM. Isn’t that outsourcing? Where would those jobs be created? Where (would) those jobs would be supported?”

    The largest orders for Boeing aircraft have also been placed by India. “How many jobs would have been sustained and and how many jobs would be created?”, he asked.

    Referring to the ban on government offshore outsourcing, he said, “We hope that there is no other state which would follow the ill-advised and less informed path chosen by the Ohio state government.”

    He said at a time when the global economy is reeling from the aftershocks of the economic crisis and is coming out of a recession, any inward-looking step of protectionism would slow down the pace of recovery.

    “It is better to avoid it, particularly since the US is the world leader, is the largest economy and therefore, there are expectations (from it) in that context,” he said.

    Under the Border Security law, the US had in August hiked the fees for H-1B and L1 visas by at least USD 2,000 for the next five years. Indian professionals, particularly in the IT sector, use these visas for short-term contracts in the US, which account for about 60 per cent of Indian software exports of USD 50 billion.

    India also wanted to sign a Totalisation Agreement with the US so that Indians on short-term jobs would not have to pay the social security tax in the US. Since they do not stay there for long, they are not able to use the benefit of the social security in return for the taxes.

    “There is a need to complete the totalisation agreement. Almost USD 2 billion per annum social security payment is made by the Indian IT professionals,” he said.

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