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| Edited By: |Source: DNA |Updated: Jun 10, 2016, 08:05 AM IST
Beyond the brouhaha of Prime Minister Narendra Modi’s star-flecked visit to the United States, lie some interesting facts. One of the issues on which there is no convergence between India and the US is with regard to the services sector and the related issue of work visas for the Indians in this matter. First, New Delhi is moving the World Trade Organization (WTO) dispute settlement mechanism about the increase in visa fees to H-1B and L1 categories, which basically relates to Indian workers seeking temporary visas to work for the principals or clients in the United States.
The hike in fees is being seen as a discriminatory and protectionist measure. Washington has however explained the hike as a means to finance biometrics-tracking system and healthcare of the 9/11 terror attack victims, which India sees as a rationalisation of an attempt to restrict Indian service sector employees from going to the US and it has even hinted that this could open a “Pandora’s box”. It is being seen plainly as a protectionist measure to facilitate jobs for those at home instead of letting foreigners in, and that this would dampen prospects of global trade. According to Nasscom, the Indian IT body, the burden of the visa fee hike would cause a liability of US$40 m per year on Indian companies.
The Americans on their part have put forward the argument that the hike in visa fees was not directed against India alone, and that it applied to everyone across countries and economic sectors. The Americans have also disclosed that the hike is part of an internal legislative measure, and it cannot be altered without changing the law.
It should prove to be an interesting contest over policy decisions, which could be seen as necessary by one country and as discriminatory by another. This also shows that both countries are pursuing their respective national interests despite the diplomatic bonhomie between the two. There is nothing disruptive about this fictional brush between Washington and New Delhi, and it’s right that they should be turning to the WTO for sorting it out.
At the same time, India has suggested a Trade Facilitation Agreement (TFA) for the services sector as there is one in the movement of goods. Union Commerce Minister Nirmala Sitharaman had suggested this at a meeting of the Organisation for Economic Cooperation and Development (OECD) countries. WTO Director-General Roberto Azevedo and trade ministers of 25 countries who were at the meeting welcomed the idea, and Azevedo wanted India to submit a proposal. Sitharaman said that the Indian officials were preparing the framework.
It has been India’s argument that free trade should not be restricted to goods but that it should also include movement of people as well. The developed countries have been resisting the idea even as they pushed for dismantling of tariff walls in the agricultural and manufacturing sectors. It is also true that many countries, including India, did not agree to free trade in agriculture for the fear that the livelihood of millions of farmers in the developing world would be put at risk. It is not surprising that Europe and North America are not open to the idea of free movement of people across borders in the name of trade liberalisation because they fear that their own people would not be able to hold against workers from Asia and Africa who would lower the wages because of the increase on the supply side. The Americans, more than the Europeans, are anxious to save jobs for the work force at home. But India has a logical poser: if free trade is the ideal, then it should include workers as well.
