On the face of it, this is a hugely successful week for India in its relations with the US, because President Donald Trump tweeted a warning to Pakistan, calling it a safe haven for terrorists, while his aide at the UN, Nikki Haley, spoke of withholding aid to the country — albeit a measly $255 million after splurging $33 billion in aid to Islamabad.
Now, look beyond the headlines — and maybe at some other headlines over the past year, and you will know that India may be losing its bargains and interests in feel-good hugs and tweets.
Posturing is not policy.
News this week that the US is planning to change its visa regime so that those who hold H-1B visas (essentially long-term work permits) will have to go back home if they have green card (permanent residency) applications pending is nothing but old protectionism speaking new idioms. Ground exists under World Trade Organisation (WTO) rules for India to challenge that, but thus far, South Block’s diplomacy has been weak and wobbly on that issue.
As many as 500,000 Indian workers, mostly techies, may be deported back to India if Washington’s proposal comes true. Software association Nasscom has called the criteria attached to the US proposal as “onerous” as it lobbies to help IT companies such as Infosys and Tata Consultancy Services.
Make no mistake, visa restrictions under the “Buy American, Hire American” plan is essentially a non-tariff barrier to free trade. Trump has been proudly defending American interests in jobs, forgetting that trade is a two-way street, especially between nations. While India can potentially gain from US visa restrictions by getting more work outsourced to offshore locations like Bangalore or Chennai, in terms of fair trade, India should not let the US get away with its arbitrary policies.
Last year had its low moments when Trump mentioned India among the countries with which it wants to reduce US trade deficit. He publicly asked Prime Minister Narendra Modi to reduce the $31 billion trade deficit in favour of India.
India is giving such a free hand to US companies like Amazon and Uber, that local startups like Flipkart, Olacabs and MakeMyTrip have been groaning about “capital dumping” by US giants and the lack of a level-playing field for local companies.
Contrast this with China, which has managed to harass the hell out of Uber and restrict Google, Facebook and Amazon through opaque local practices and restrictions while merrily using a global free trade regime to its advantage.
On the other hand, India, with its good boy behaviour with regard to both terrorism and technology, is ending up with empty compliments and little else to show.
It is pertinent to look at the US visa regime under World Trade Organisation’s rule for “movement of natural persons” that promotes free trade in services. India can — and should — invoke the rule, which squarely applies to workers who are deputed by suppliers of services, to discuss H-1B restrictions in the US.
Bilateral talks with warm hugs go nowhere if not accompanied by negotiations that push for free trade in multilateral forums like the WTO. It is true that “movement of natural persons” is a tricky issue as it involves complexities. However, it provides elbow room for India to talk tough, raise new concerns on trade restrictions and drive a hard bargain.
India has already raised its concerns under the General Agremeent on Trade in Services (GATS), but needs to get tougher and be more specific on its demands.
India should be under no compulsion to reduce its trade deficit with the US, nor should it feel obliged to give a free hand to US technology giants to serve the Indian market if Chinese restrictions are any indication. India, in the end, must look at its own interests. be it a red carpet for Amazon or H-1B visas in the US. It is squarely the government’s job to look beyond friendly noises to place hard issues on the negotiating table.
(The author is a senior journalist. He tweets as @madversity)
Published Date: Jan 03, 2018 12:14 pm | Updated Date: Jan 03, 2018 12:14 pm