A high-profile US-India business summit here on Thursday saw the two sides taking sharp positions over each other’s policy measures and proposed legislative action in some key areas of concern to their respective corporate sectors.
Finance Minister P. Chidambaram flagged New Delhi’s concerns over the visa restrictions set out in the US Immigration Reform Bill that could hit the Indian IT firms hard. “The restrictions sought to be placed on knowledge workers amount to non-tariff barriers,” he said. From the American side, US Trade Representative Michael Froman was quick to bring up Corporate America’s sharp criticism of the “investment and innovation environment in India”, with pointed references to localization conditions and poor intellectual property protection.
Many of the issues were slated to be taken up later on Friday at a high-level meeting, called by the US-India CEOs Forum, with participation by top economic guns of both governments – Chidambaram, Commerce and Industry Minister Anand Sharma and Planning Commission Deputy Chairman Montek Singh Ahluwalia, and from the US side, Treasury Secretary Jacob lew, Commerce Secretary Penny Pritzker and Froman.
Chidambaram alluded to the challenges still faced by India in bringing millions of people above the poverty line, saying at one point: “We are a country where we are building our economy brick by brick, and in that process we seek your help.” “We can do much better, if we work together,” he said, noting: “We have a very young population which is hungry and aspirational. We have a talent pool which is largely untapped.”
Chidambaram, who held separate meetings with a group of Congressmen and Senators, voiced India’s “discomfort” with the provisions related to H-1B visas under the Immigration Bill that has been passed by the Senate and is now before the House of Representatives. He wondered how the “temporary relocation of knowledge workers” under these visas has been linked to the larger issue of immigration, given that such relocation is “not immigration by any definition”.
Issues such as compulsory licensing, patent protection, preferential market access and increase in FDI in defence and financial services were dealt with.On intellectual property protection, which has been whipped up by American industry as a major area of discord, Chidambaram said the Indian law affirms intellectual property rights (IPRs). And the process of granting compulsory licence and patent registration are WTO compliant and subject to judicial review.
He reaffirmed close cooperation between the two countries in areas such as security and defence, while the civil nuclear agreement has been a path-breaking landmark. Froman brought up issues agitating US companies doing business in India, who have hit out at policies that purportedly favour the domestic industry and “discriminate” against American and other foreign companies.
“These measures range from subsidies for solar developers who use domestically manufactured solar equipment, to preferential treatment for products manufactured in India or that use domestically developed intellectual property, to denial of rights of patent holders where the invention was imported into, but not manufactured in, India,” he said. “let me stress that as a friend of India and one of the caretakers of our economic relationship, I am concerned about the investment and innovation environment in India,” the USTR said.
He, however, welcomed India’s recent announcement to review and modify the Preferential Market Access policy, including the commitment that the reviewed policy would not have domestic manufacturing requirements with respect to private sector procurement of electronic products.