India to raise US visa fee hike, outsourcing ban at trade dialogue

WASHINGTON - A steep hike in US work visa fee for IT professionals and Ohio state ban on outsourcing is expected to figure prominently at a key India-US trade dialogue here ahead of President Barack Obama’s India visit.

While both India and the US do not wish to muddy the waters before the visit, India is expected to record its disappointment over recent “protectionist” trends in the US at the Trade Policy Forum (TPF) Tuesday co-chaired by India’s Commerce and Industry Minister Anand Sharma and US Trade Representative Ron Kirk.

The bilateral trade between the countries stood at $36.5 billion in 2009-10. The US also accounts for about 60 per cent of India’s total $50 billion IT and IT enabled services exports.

Besides the hike in fees for certain categories of H-1B and L1 visas to raise $600 million for securing the US-Mexico border and Ohio state ban on government offshore outsourcing, India is also concerned over the ‘Buy America’ law that requires companies availing of state incentives to source their requirements from the US itself.

India is also expected to raise the issue of early implementation of a proposed totalisation agreement with the US. Under this, professionals on short-term work visits to America would be exempted from paying social security taxes.

The last TPF meeting took place in October 2009 in New Delhi.

India will also raise the outsourcing issue at a meeting of the Private Sector Advisory Group (PSAG), created by the US and Indian governments to provide the TPF with independent counsel to help propel closer economic and commercial relations between the two countries.

We will take up the outsourcing issue at the PSAG,” Rajan Bharti Mittal, president of Federation of Indian Chambers of Commerce and Industry (FICCI) said Monday lamenting “on the one hand, we are talking about free market, on the other, we are restricting access.”

Mittal, who is vice chairman and managing director of Bharti Enterprises, pointed out that his company had just given IBM a $1.5 billion outsourcing contract to manage the technology services of Bharti Airtel’s operations in 16 African countries.

This is in addition to a $750 million deal with IBM for such services in India that is expected to grow to $2 billion. “I am going to ask them ‘Should we also scrap these deals in a tit for tat measure?’” he said regretting that the outsourcing debate had become India-focused in US.

Totalisation was also a major issue that needs to be resolved, Mittal said.

(Arun Kumar can be contacted at arun.kumar@ians.in)