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Give Prez Trump the facts, from Harley to STEM ... PDF Print E-mail
Monday, 24 April 2017 04:04
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He’s wrong on Harley duty and job losses, the US actually benefits from Indian IT industry ... publicise the data

 

Finance minister Arun Jaitley has done well to raise India’s concerns on H-1B visas with US commerce secretary Wilbur Ross, but given there is going to be little immediate impact with no notification to change the lottery process for 2017, India would do well to keep a cool head. Indeed, though she was provoked into making a confrontationist statement by the media last week, commerce minister Nirmala Sitharaman did well to say, “several big US companies are in India too … they are earning their margins, they are earning their profits, which go to the US economy … if this debate has to be expanded, it has to be expanded to include all these aspects”. While some sections of the media have sought to link the H-1B issue to an inter-ministerial panel that has been set up to examine whether royalties charged by MNCs from their India operations need to be reviewed, it is to be hoped this is just a coincidence. Apart from the fact that the list of high-royalty firms is not dominated by US firms, the presence of such firms helps India too—Suzuki’s royalty earnings have been highlighted, but not juxtaposed against its role in making India a player to reckon within the global small car market. And to the extent a Google or a Facebook are doing development work in India, this is helping nurture talent in India

 

What the government needs to keep doing is to nail half-truths about India’s restricted market, apart from looking at WTO solutions if it can be proved that visa restrictions violate the MFN principle. While US president Donald Trump had suggested India was levying a 100% import duty on Harley Davidson motorcycles, Sitharaman’s ministry has done well to point out that Harley pays a 10% duty on a large part of its imports—only fully-built-up bikes from the US attract the higher duty—and that it has over a 50% market share in the large bike segment in India. A big lobbying effort in the US would tell Americans that Indian IT firms paid more than $20 billion in taxes to the US between 2011 and 2015, $375 million in US visa fees and are directly responsible for more than 100,000 jobs in the US. As for the fear of job losses, with the US department of labour estimating 2.4 million STEM jobs will be unfilled by 2018, it’s difficult to see how Indian H-1B professionals are taking away US jobs—according to Nasscom, the annual number of Indian IT specialists working on temporary visas is about 0.009% of the 158-million-member US workforce; if 20 million US workers lose their jobs every year, this can’t be linked to Indian techies on H-1B visas. A new research paper by Harsha Vardhana Singh who heads Brookings India provides more fuel as it points out that, far from India being a high-import-duty country, its average import duty is a mere 2.3%—90% of non-agriculture imports are subject to a duty of less than 10%. Add to this, what Sitharaman alluded to, India is among the fastest-growing market for US firms like Facebook, Google and Amazon; the pace of defence imports will vary from deal to deal. The US can have a legitimate grouse over farm tariffs, but that has to be the subject of negotiation, not arm-twisting and grand-standing.

 

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