India asks US to address concerns of Indian IT industry

India asks US to address concerns of Indian IT industry

India asks US to address concerns of Indian IT industry

India today expressed hope that the current economic woes in the US would not lead to protectionism and said that concerns of the Indian IT industry over anti-outsourcing measures announced by President Barack Obama recently will be addressed quickly.

Foreign Secretary Ranjan Mathai on his first bilateral visit to the US said that the Indian IT industry in the US has contributed USD 15 billion in taxes alone in the last five years and underlined the need to eliminate discriminatory actions.

Mathai is believed to have raised the issue in his meeting with the officials of Commerce Department yesterday in the backdrop of Obama's State of the Union address in which he outlined measures to bring jobs back to the country.

Obama had said his administration would offer incentives to those firms which will create jobs in the country. Mathai in his address to the Centre for Strategic and International Studies said, "Indian IT industry contributed USD 15 billion in taxes over the last five years. This success story should not be set back by stringent visa regulations which act as a non-tariff barrier."

"We do hope the current economic challenges in the US would not lead to protectionism and that concerns of Indian IT industry will be addressed quickly," he said. NASSCOM estimates that Indian industry employs over 100,000 in the US up from 20,000 six years ago, he said adding it supports 200,000 other jobs, including indirect ones, apart from enhancing the competitiveness of some the US industries.

"According to a back of envelope calculation – Indians paid over USD 200 million in visa fees. Perhaps USD 30-50 million has been taken from young aspiring Indians working in businesses whose US visas were rejected. The pink slip has become a greenback!" Mathai said.

"It needs reiteration that the targets of these discriminatory actions are precisely those who have contributed intellectually to the climate of reform in India, and who have been votaries of strong India-US relations," said the Foreign Secretary.

Many of Obama's proposals centered on changes to the tax code, including limiting deductions for companies that move jobs overseas, rewarding companies that return jobs to the United States and increasing taxes on wealthy Americans.

He said that money should be used to cover moving expenses for companies that decide to bring jobs home. As the bilateral economic ties deepen, Mathai said India and the US will obviously have a growing range of policy and regulatory concerns with each other.

"But, we have in place an elaborate set of bilateral mechanisms to address them. While we should expeditiously conclude a Bilateral Investment Treaty, we must look beyond it, too," he said, noting that the US is the only advanced economy in the world with which India has not concluded or is pursuing a Comprehensive Economic Partnership Agreement.

"So, we should not only focus on expanding trade and investment, but also use the power of innovation to make our economies global leaders in the 21st century, and at the same time, address the needs of the poorest sections of the population in the world and find solutions to the challenges of clean energy, food security, health, education," Mathai said.

India and the United States, Mathai said, can and must strengthen their economic partnership. The flow of trade in goods and services, and investments in both directions has grown several times in the past two decades increasing to USD 40 billion of US imports, both goods and services.

"Indian businesses have invested perhaps USD 26 billion in the US in five years. All this has created new job openings in the US. It is also natural that as the Indian economy continues to grow and modernise, as the US economy recovers its momentum and as the global economic situation improves, our trade and investment relations will surge to higher levels," he said.