Solution may be found at bilateral meeting to be held in October, in the US.
AB Wire
NEW DELHI: India, which had considered taking the United States to the World Trade Organization dispute settlement panel to resolve the issue of restriction of H-1B and L1 visas for its high tech workers, will try to iron out those differences as well as the issue of social security taxes, at the 9th Trade Policy Forum (TPF) to be held in the US in October.
India brought up the issue of restriction of H-1B and L1 visas, and the high cost imposed on visas which affected India’s IT industry, at a meeting between commerce secretary Rita Teaotia and deputy US Trade Representative (USTR) Robert Holleyman, here, on Tuesday.
According to India, the high cost of professional visas – H1B and L1 – and the corresponding higher wage implications under the US Immigration Reforms impact the country’s information technology sector and professionals, reported Business Standard.
Teaotia suggested that a high-level group be created with members from both the countries to address India’s concerns related to the US Totalisation and Social Security Act. India believes the policy is “discriminatory towards Indian workers in the US”, who end up losing their social security contributions due to “discrepancy in the visa and social security regimes”.
Under the Totalisation Agreement, Indians who go to US to work for a stipulated period of time need not pay the social security tax in the US. At present, Indians working there on a short-term basis pay the social security tax but are not entitled to enjoy the benefit of the social security in return for the taxes.
The Financial Express reported India claims the lack of a Totalisation Agreement with the US is affecting the Indian software industry as it is paying over $1 billion annually to the US government, with no benefit or prospect of refund.
Seeking greater access to the US market, Teaotia apprised the deputy USTR of the difficulties faced by textile exporters in entering the US markets due to non-tariff barriers. She suggested that a working group on market access for Indian products, including pharmaceuticals, reported Business Standard.
India also took up the market access issues concerning its several agrarian products, including rice, mangoes, pomegranates and table grapes, in the US, reported the Express.
The TPF, established in 2005, is the premium forum for bilateral trade. It has five focus groups – agriculture; innovation & creativity; investment; services; and tariffs & non-tariff barriers. It is alternatively held in India and the US.
The last meeting between India and the US on these issues was held in last November in New Delhi after a gap of four years. The meeting was chaired by commerce and industry minister Nirmala Sitharaman and USTR Michael Froman.
Both sides have set a target of achieving $500 billion worth of trade in goods and services, a huge jump from the present $100 billion.
6 Comments
So they are complaining they have to pay American taxes but they want to get American wages?!?! Sounds like Indian logic.
So they are complaining they have to pay American taxes but they want to get American wages?!?! Sounds like Indian logic.
The problem with the totalization is that it is trying to treat a tax like the PF, which is a personal savings. The US tax code is set up with myriad examples of taxes paid by people with little or no chance of receiving benefit from them. Is it any more fair to the retirees who paid the tax their taxes for 50 years to take the funding out of the system?
There’s no perfectly fair answer, but when the guest workers are already getting the better end of the deal than their domestic counterparts, it’s hard for me to support the US conceding more.
Let’s hope the USTR rep told their Indian counterparts that neither H-1B or L-1 are visas for Indians only and that these programs are meant to allow qualified foreigners from any country to work, legally in the USA.
This is a curious definition of the phrase “resolve amicably.” India persists in wanting to expand various work visa programs such as H-1B, L-1, B-1, and now, the OPT extension to the F-1 (student) visa. The Indian government has become dependent on the billions in remittances from the developed world to the family members in India. This “alphabet soup” of work visa programs, with the bloated numbers of cumulative admissions, is systematically destroying the career prospects of experienced American citizen technical professionals. All of these work visa programs have morphed into de-facto government-sanctioned foreign hiring preference programs.
I believe that the U.S. should emulate India. India protects its workforce by permitting only about 30,000 work visas for the nation of India, which has more than three times the U.S. population. Thus, on a basis proportional to the U.S. population, the total work visa population in the U.S. should only be about 10,000. (Presently, there are well over 1 million work visa beneficiaries in the U.S. The majority are from India.)
Of course, the amoral economic elites in the U.S. and India will not permit such a common-sense solution. They want the “government subsidy” work visa programs to continue as they obtain higher-skilled workers for below-market prices. Add to that the U.S. business practice of conditioning the meager outplacement benefit of the experienced U.S. worker on training their imported replacement – mostly from India. This was recently featured at Southern California Edison and Disney. About three years ago, this scenario played out at Pfizer in Connecticut. These actions are building considerable resentment against India.
Why not put an embargo on India for a year or two until the investigation into the rampant abuse of these programs is complete.