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Suresh Prabhu to discuss totalization deal, visa fee hike with Trump admin

US has pushed the issue of its wide trade deficit with India in first ministerial-level trade talk after Trump took charge

Subhayan Chakraborty  |  New Delhi 

Suresh Prabhu, Commerce and Industry Minister
Suresh Prabhu, Commerce and Industry Minister

In its first ministerial-level trade deliberation with the Trump administration led United States, India has pushed for the urgent need to conclude a totalization agreement apart from the steep hike in visa fees.

As part of his trip to Washington DC, Prabhu has met with US Trade Representative Robert Lighthizer as well as US Commerce Secretary Wilbur Ross whereby he raised the issue of the unsigned totalization agreement allowing temporary Indian workers in the US to repatriate their social security contributions when they leave the country, senior Commerce Ministry sources said.

According to India, the Totalisation and Social Security Act of the US discriminates against Indian workers in the US, who end up losing their social security contributions because of a discrepancy in the Visa and social security regimes.

India wants early conclusion of the issue, aiming to protect the interests of Indian professionals who contribute around a $1 billion (Rs 6,670 crore) each year to the US social security. Under this pact, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country.

On this note, the issue of increase in visa fee and reduction in the number of available H1B and L1 visas proposed by US lawmakers has also been discussed. India has reportedly termed the move protectionist and said it has had an adverse impact on services trade. Indian services companies continue to face problems in obtaining H-1B visas and L-1 visas in the form of annual caps, higher visa fees and high rejection rates.

Senior Commerce Ministry sources said the US has focused on the country's trade deficit with India. However, India has countered by saying that for the last 30 years or so, the U. S. and Indian exports to each other's territory have grown at the same pace. In spite of huge difference in the size of the economy as well as per capita income, U.

S. happens to be the second largest exporter to India.

Currently, bilateral trade between the countries is more than $100 billion (around Rs 6.67 lakh crore), with both ways merchandise trade accounting for $64.51 billion (around Rs 4.14 lakh crore). Of this, merchandise trade is over $63 billion out of which India's exports to the US, accounting for over $40 billion, constitutes the largest offshore market for Indian goods. India has also pointed out that investments made by 100 top Indian companies in the U. S. account for a significant $ 17.9 Billion investment, quoting industry estimates.

Prabhu has also pointed out that Indian IT Companies have created large number of American Jobs while Indian students are spending$ 6 Billion annually in the U. S. He has also reportedly stressed on the fact that Indian airline operators have placed large number of orders for aircrafts running into billions of US dollars.

Reports from Washington confirmed that topics which have been raised by the US such as like ground handling operations, import regulations relating to poultry and pork exports to India, among others, have been discussed and are potentially in the process of getting resolved.

Prabhu has also emphasized the need for immediate progress on market access for agriculture commodities of interest to both nations. For India, this includes the demand for easing of import procedures by the US for Mangoes and Pomegranates and market access for Table Grapes.

With respect to the US raising concerns on price controls for medical devices in India, Prabhu has made strong pitch for the need for India to bring about a reconciliation between the demand for optimum medical facilities, affordable health care and a large number of the populace. On the other hand, he encouraged American manufacturers of medical devices to come forward for establishing manufacturing facilities in India.

Pointers :

India says the current Social Security Act of the US discriminates against Indian workers who contribute $ 1 billion to US economy annually

The country has also called the visa fee hike by the US as protectionist

India has pointed out 100 top Indian companies in the U. S. account for significant $ 17.9 Billion investment

Issues of interest to US such as ground handling operations at import regulations relating to poultry also discussed

First Published: Fri, October 27 2017. 20:35 IST
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