India to take up Totalisation Agreement with the US.
Commerce minister Anand Sharma at the weekend said that protectionist measures by the US government with regard to outsourcing and movement of professionals are regressive and counter-productive in nature which will delay the process of economic recovery.
“Protectionist measures in the US are regressive and counter productive. As a leading economy of the world, the US has to have more confidence to engage the rest of the world,” said Sharma at the Infosys campus here today.
He also said that this tendency would deepen recession and delay the process of economic recovery.
In the aftermath of economic slowdown, the US has taken several protectionist measures like raising fees for H1B visas along with banning outsourcing from the state of Ohio to create jobs for locals. The Border Security legislation, which nearly doubles the H-1B and L-1 visa application fee from the present level of about $2,300 to about $4,300 per application, was approved last month.
“If working in the US is becoming a pain, then the Indian information technology (IT) industry will have to create new business models and bring the jobs back to India,” Nasscom president Som Mittal had then said. The $50 billion Indian IT industry gets 60 per cent of its revenues from the US.
Even US president Barack Obama has said that he would end tax-breaks for companies which create jobs and profits in other countries.
However, these steps have been criticized by Indian and US industry as well as Indo-US Chambers of Commerce as regressive that will create trade barriers.
“While countries have domestic compulsions, they have to honour international obligations and commitments. In testing times, it’s important to step out and engage to dismantle existing barriers and not to create new ones,” he said.
He, however, said that India had little legal options against such US measures.
Moreover, the Indian government will discuss the issue of growing protectionist policies of the US government in the next bilateral trade meeting on 21 September in Washington.
Sharma will co-chair this Trade Policy Forum (TPF) meeting along with US Trade Representative Ron Kirk.
“India will also take the issue of Totalisation Agreement with US in the upcoming meeting,” Sharma said. Under a totalisation agreement, an expatriate in either country need not contribute to social security schemes of the host nation.
Referring to the issue of increasing protectionist measures by US government, Infosys’ chief mentor, Narayana Murthy said, “There will always be various geo-political issues that create friction to the growth of revenues of many of the corporations. But the management of corporations have to sit down and think of innovations that will make these companies a necessity for the clients of corporations to succeed.”
He stressed on the importance of innovation by Indian companies to stay competitive.
