Centre to raise with U.S. non-tariff barriers

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Note4Students:

Important. From both Prelims and Mains perspective. Prelims can have questions related to various trade barriers, countervailing duties (read about them in B2B provided at end of news card). Mains can have a question on the rising use of protectionist measures by various nations and what different forms it is taking apart from curbing work visas. [We discussed a newscard on this yesterday].


News:

  1. India is planning to take up with the Trump administration the “barriers” imposed by the U.S., which are hurting Indian goods exports to that country in sectors including agriculture, pharmaceuticals and other industrial products

What are the barriers?

  1. The U.S. “non-tariff/Sanitary & Phyto-Sanitary (SPS) barriers” include those imposed under laws concerning bio-terrorism, child-labour, national security, ‘Buy America’ norms preferring U.S.-made items and American suppliers in U.S. Government purchases, registration fee hikes (in sectors such as pharma), food safety as well as animal and plant health regulations

When will it be done?

  1. The issue would be on the agenda of the next India-U.S. Trade Policy Forum (TPF) — the main bilateral platform for discussing and resolving trade and investment issues
  2. The date for the next TPF meeting will be fixed after the new U.S. Trade Representative (USTR) assumes office

Other issues

  1. The U.S. Department of Labor (DOL) has listed 23 items produced in India on the ‘List of Goods Produced by Child Labour or Forced Labour’ — which is in effect a ban on their import
  2. Concerns: The U.S. Government measures envisaged within an initiative to counter potential terrorist threats to the international maritime container trade system
  3. This included X-ray scanning of containers exported to U.S. which would cause additional costs for Indian exporters across sectors
  4. American Law at fault: In addition, the Ministry has cited a law (the Trade Expansion Act of 1962 of the U.S.) allowing American manufacturers to petition for curbing imports from third nations on national security grounds without providing proof from industry
  5. This is a major Non-Tariff Barrier (NTB) of the U.S. affecting Indian exports across sectors as the law — allowing invocation of ‘national security exceptions’ without having to apply any detailed criteria
  6. Indian pharmaceutical exports to the U.S. are hit by the increase in registration fees, approval delays and low approval rates for registrations mandatory for sale of all new drugs in the U.S
  7. Also, ayurveda and traditional Indian medicines are hit by the U.S. requirement of clinical trials while the practice of traditional Indian medicine systems such as Siddha and Unani are not allowed by the U.S. Federal Government
  8. Indian Basmati Rice exports will be hurt owing to import alerts due to the presence of pesticide residues until the U.S. Environmental Protection Agency registers, approves and fixes a tolerance level for these residues
  9. The Ministry has also opposed the U.S. requirement of irradiation treatment and inspection of mangoes prior to shipping from India
  10. Indian grapes, litchis, pomegranates, honey, marine and meat products are also impacted by various U.S. “NTBs”
  11. The U.S. has imposed countervailing duties on Indian exports, including those by steel and paper industries

Back2Basics:

  1. A nontariff barrier is a form of restrictive trade where barriers to trade are set up and take a form other than a tariff
  2. Nontariff measures (NTMs) are generally defined as policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both
  3. Nontariff barriers include quotas, embargoes, sanctions, levies and other restrictions and are frequently used by large and developed economies
  4. The barriers can take many forms, including the following:
  5. Tariffs, Non-tariff barriers to trade. Import licenses. Export licenses. Import quotas. Subsidies. Voluntary Export Restraints. Local content requirements. Embargo. Currency devaluation. Trade restriction
  6. The most common barriers to trade are tariffs, quotas, and nontariff barriers
  7. Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO) rules to neutralize the negative effects of subsidies
  8. Countervailing duties (CVD) are meant to level the playing field between domestic producers of a product and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government

U.S. tightens H-1B visa programme

USCIS, the agency responsible for selecting the 85,000 H-IB beneficiaries, clarified, purportedly for administrative reasons, that computer programmers with two-year degrees do not qualify as speciality occupation as defined by the programme

Note4students:

A link in H1-B visa issue. Industry does not expect these regulations to affect them since 2 year degree holders are rarely hired by these companies for these assignments.

US judge temporarily blocks Trump’s travel ban nationwide

  1. Issue: President Donald Trump’s ban on travelers and immigrants from seven predominantly Muslim countries
  2. A U.S. judge temporarily blocked the order, siding with two states that urged a nationwide hold on the executive order
  3. Trump’s order last week sparked protests nationwide and confusion at airports as some travelers were detained
  4. The White House has argued that it will make the country safer

Note4students:

This news is of minor importance. Just be aware of the important happenings as immigration issue might hit India too.

New H-1B Bill in U.S. calls for doubling minimum pay

  1. Context: A new bill introduced by Democratic Congresswoman Zoe Lofgren proposing changes in the H-1B visa programme
  2. It seeks to raise the minimum salary under the scheme to $1,30,000 from the current $60,000
  3. Impact: The legislation, if passed, could hit Indian and American IT companies which use H-1B visas to hire foreign skilled workers, including Indians
  4. The proposed change will allow companies to hire foreign talent when it is locally unavailable
  5. It plugs the loophole that allows them to undercut local employees by bringing cheaper replacements from abroad

Note4students:

This issue is important for prelims as well as mains as it has huge impact on India’s IT sector. Also take a look at visa types here.

Sessions promises curbs on H-1B visa

  1. News: U.S. Attorney General-designate Jeff Sessions told a Senate committee that he would take measures to curtail the “misuse” of H-1B visas
  2. The move that could impact Indian IT companies that use them in large numbers
  3. Legality of the H-1B: This visa programme is Congressionally mandated and U.S. courts have held that hiring cheaper foreign workers is maintainable under the law
  4. Can be undermined: The executive branch can bring pressure on the programme without changing the law, as its execution is dependent on the processing of visa applications involving multiple departments
  5. Moreover, there is an increasing consensus among lawmakers to bring some sort of curbs on the programme
  6. There are bills pending on the programme and the newly elected Democratic leader in the Senate, Chuck Schumer from New York, is a supporter of restrictions on the programme

Note4students:

Different kind of Visas are covered earlier. Do note them from Prelims point of view. This also forms a part of Indo-US relations.

What is Totalisation Agreement?

  1. Basics: It is basically an agreement with the purpose to avoid double taxation of income with respect to social security taxes
  2. How it works? It comes into picture when determining whether any alien is subject to the US Social Security/Medicare tax, or whether any US citizen or resident alien is subject to the social security taxes of a foreign country
  3. India at present has 14 totalisation pacts with countries including Belgium, Germany and France

U.S. visa fee increase discriminatory: FM

  1. Context: Finance Minister Jailtey’s meeting with US Trade Representative
  2. News: India has expressed concern over the hike in visa fee by the US, which is discriminatory and in effect is largely targeted at Indian information technology companies
  3. Background: Last year, the US Congress imposed a special fee of up to $4,500 on H-1B and L-1 visas to fund the healthcare Act and biometric tracking system
  4. Future: He also underlined the need for early conclusion of Totalisation Agreement which would benefit Indians working in America

H1B visa: Caps met, lottery to decide 85,000 new skilled immigrants

  1. News: The applications for H1B visa category exceeded the cap of 85,000 fixed for the fiscal year 2017
  2. Of the total cap of 85,000 visas, 20,000 are under a special category called advanced degree exemption
  3. Major Players: Indian IT companies such as TCS, Wipro, Infosys and Cognizant along with Microsoft and Google that recruit resources from India
  4. Fact: In 2014, 86% of the new H1B visas issued were to Indians

India invokes dispute with US at WTO over visa fees

  1. Context: India has set off a major trade dispute with the US at WTO
  2. Why? Escalation of visa fees for L-1 and H-1B of short-term service providers & limits on their numbers
  3. Argument: Treatment accorded to juridical persons of India with a commercial presence in the US under Mode 3 of GATS are against US’ scheduled specific commitments
  4. Mode 3 of GATS: WTO members are allowed to have a commercial presence in member countries, depending on the specific binding commitments made in their schedules

India takes on U.S. at WTO over visa rules

  1. Context: Increase in fees for temporary work visas, affecting Indian workers
  2. News: India has filed a complaint to the WTO against the US over its measures raising fees on some applicants for temporary work visas, mostly involving the tech sector
  3. Reason: Indians receive unfair treatment compared with Americans in the US in providing similar services in sectors like computer services
  4. Criticism: US measures are not consistent with its commitments to accept services from other countries

Learn more about World Trade Organisation and H1B Visa.

IT sector worried; India to take up visa fee with U.S.

Industry could take a $400-mn hit a year because of the hike.

  1. India will schedule discussions with the U.S. to raise its concerns over the Obama administration’s recent decision to hike visa fees.
  2. India will consider retaliatory measures and even explore the possibility of dragging the U.S. to the WTO’s dispute settlement body.
  3. India is the largest user of H1B visas (67.4 per cent) and is also among the largest users of L1 visas (28.2 per cent).
  4. India’s export of computer services and ITES/BPO services was around $82 billion, of which exports to the U.S. and Canada accounted for nearly 60 per cent.

Special fee for H1B and L1 visas

  1. In 2010, the US had started a $2,000 fee for H1 B visas but the number of people taking it has only been on the rise, the 2010 Bill lapsed on October 1.
  2. The new Bill makes it valid until September 2025, for 10 years, though terms the fee temporary.
  3. According to NASSCOM, the $2,000 fee is used to raise $70-80 million annually.
  4. A part of money raised will fund health care and implementation of a biometric entry and exit data system.

What is NASSCOM?

  1. National Association of Software and Services Companies (NASSCOM) is a trade association of Indian IT and BPO industry, established in 1988.
  2. It facilitates business and trade in software and services and encourages the advancement of research in software technology.
  3. It is registered as non-profit organisation under the Indian Societies Act, 1860.

Modi talks to Obama over H1B, L1 visa concerns

PM Modi shared with U.S. President, the concerns of Indian IT industry on the proposed legislation in the U.S. Congress relating to popular H1B and L1 visas.

  1. Indian IT companies in the U.S. may end up paying a special $2,000 fee again on the popular H1B and L1 visas to fund a 9/11 health care act.
  2. According to the NASSCOM, Indian companies had paid between USD 70 to 80 million per annum between 2010 and 2015.
  3. The extra fee applies to companies with at least 50 per cent of their employees on H-1B visa or L-1 visas, and is in addition to the other fees paid by employers.
  4. Because of its 50 per cent threshold, it mostly hits the large Indian IT services firms, the leading users of the H-1B visa.

What is H-1B Visa?

  1. The H-1B visa is a non-immigrant visa that allows U.S. companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialised fields.
  2. Applying for this visa is generally quicker than applying for a US Green Card.
  3. Therefore the H-1B visa is popular for companies wishing to bring in staff for long-term assignment in the US.

Milestone for H-1B, a passport to the American dream

A large number of Indian IT professionals have been issued the visa over the years.

  1. A digital arts exhibition on the H-1B visa has opened at the world’s largest museum in the U.S. to mark the 25th anniversary of the popular work permit falling on November 29.
  2. South Asian and Asian American artists explore America’s immigration story through this visa.
  3. Our H-1B visa exhibition explores a historic part of the American story from the perspective of South Asian Indians.
  4. Several generations of young scientists and engineers from all over Asia had come to be part of a “New America” and shape the United States’ culture of innovation and entrepreneurship.


:( We are working on most probable questions. Do check back this section.







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