India set to take up totalisation pact, visa issue with US

| Updated on: Jan 17, 2018

Kerry, Pritzker to attend strategic dialogue next month in Delhi

With two high-level dialogues coming up between both the countries, India is all set to battle it out with the US armed with a robust agenda. India plans to use the Bilateral Investment Treaty as a negotiating tool to get the US to sign the long-awaited Totalisation Agreement.

High on India’s agenda is the Totalisation Agreement, which will allow Indian temporary workers employed in the US repatriate the money they contribute towards America’s social security system when they leave the country.

Currently, Indian workers working there cannot bring back their savings due to the absence of this pact. New Delhi is also expected to warn Washington that deduction of an estimated $4 billion annually from Indian professionals who are not in a position to enjoy social security benefits in the US could be in violation of global norms on services trade.

“The Commerce Ministry is examining whether the General Agreement on Trade in Services allows for such mandatory deduction from particular countries which leads to lowering of competitiveness of the sector. We plan to discuss the matter in detail at the meeting,” stated another official.

However, so far the US has refused to get into a totalisation pact with India on the grounds that it did not meet the legislative requirement of having at least half its population under social security cover. It has also asked India to firm up its domestic social security base further in order to enter into the pact.

But India is planning to play it up with the BIT that the US is so strongly pushing India to sign, sources said.

India and US are expected to discuss all these issues at the two upcoming dialogues – the Strategic and Commercial Dialogue (S&CD) and the Trade Policy Forum (TPF) – that will also witness the visit of some of the key officials of the Obama administration.

US Secretary of State John Kerry and Commerce Secretary Penny Pritzker will come down to the capital for the S&CD, while US Trade Representative Michael Froman will be attending the TPF.

Terming both these events as “rare occurrence” as they are happening in India one after another, a top official of the Ministry of External Affairs (MEA) said the government is already firming up an agenda that consists some of the “sticking points” as far as trade and investments are concerned.

Visa issue Next on the agenda is the visa issue where India is expected to ask the US to roll back the fee hike in professional visas – H1B and L1.

“New Delhi will also be keen to take up with the Washington its tendency to keep imposing higher visa fees on the IT sector,” the official said.

India has filed a case against the US decision to further increase the visa charges for IT professionals from the country.

Last month, Republican Senator Chuck Grassley asked his government to stop issuing immigrant and non-immigrant visas to citizens of 23 countries, including India.

India is also planning to find an amicable solution to the range of trade disputes it is having with the US at the World Trade Organisation (WTO).

As a result, India is also planning to take up the issue of domestic sourcing norms followed by various US states in different sectors, officials said.

The S&CD will take place at the end of next month while the TPF is scheduled in November.

Published on July 04, 2016
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