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Where are India’s Schumers?

August 20, 2010

Overnight, a US Senator has become a household name in corporate India. It is unlikely that Charles Schumer ever dreamt that he would be so well-known in a country which he has probably never visited and, obviously, does not know at all. His proposal – to hugely raise visa fees, ostensibly to fund the prevention of illegal immigration from Mexico – has earned him much infamy in India. The Bill, now signed by President Obama, is patently discriminatory, claerly targeting Indian IT companies doing work in the US. It defies logic as to why Indian IT companies, executing work that helps the competitiveness of the US economy, should pay an exorbitant visa fee to finance a plan for securing the US border with Mexico! Schumer has added insult to injury by not just mentioning Indian companies, but calling a highly-respected one a “chop shop” – American slang for a sleazy place that deals generally with stolen cars, stripping them for parts.

What is interesting is how the US Administration cleverly uses individual Congressmen to act as a front for its policies. Despite what many in India would like to believe, the fact is that the Schumer Bill has the full support of President Obama, as evidenced by his own statements. Similarly, a Bill was passed in the US Congress which severely constrains India’s degrees of freedom on nuclear matters (interestingly, the Indian government sought to gloss over this affront, on the questionable plea that the India-US agreement would take precedence over US domestic law). Sometimes – as in the Schumer Bill and his statements – the “explanation” is that this is mere election rhetoric, a common campaigning ploy in all democracies. Such clever use of “poll compulsions” and “loose cannon” Congressmen (“What can we do; it’s a democracy”) is a way to further US diplomatic aims.

India has to learn this game, to leverage its democratic processes for national interests, in the same manner as the US does. Our media are sometimes thus used, with appropriate background briefings: for example, the metropolitan media – normally reflecting very diverse viewpoints – were practically unanimous in their support of the Indo-US nuclear deal, with few doubts and no questions.

The Schumer Bill is potentially damaging to the Indian IT industry, the country’s biggest export sector, with foreign revenues of $ 50 billion this year. This industry is increasingly an engine of economic growth, of large-scale employment (especially for youth from smaller towns), and of efficient and transparent governance. It has done wonders for the country’s image and is the pride of the country. It is shocking that law-makers from our “strategic partner” can let pass derogatory statements by one from their own tribe. There is a “clarification”, but no apology for the offensive anti-India comments. In fact, the protectionist sentiment has been endorsed by President Obama, who will, ironically, push India to be more open (especially in insurance and retail)!

One expected a serious and substantial reaction from India. The IT industry association, NASSCOM, has issued strong and cogent statements, while some other associations have voiced more muted protests. The US Chamber of Commerce, with over 3 million members, has been more forthright in opposing the Bill, as have other trade bodies in that country. However, barring a fairly forceful comment from Commerce Minister Anand Sharma, the Indian government seems to have been very careful, wary of publicly offending a partner before their President’s visit here. The Prime Minister, in keeping with the dignity of both, his office and his own persona, has justifiably avoided getting into the controversy. However, one had hoped that – taking a leaf from the US example – India too would leverage its democratic institutions to say and do what the government cannot (or will not). Much can yet be done to convey, strongly and forcefully, to US policy makers, India’s unhappiness. This may help to engineer solutions that moderate the impact of the visa fees and/or alleviate other pain points in the economic relationship.

To start with, the nuclear liability Bill – driven, despite denials, by the interests of the US nuclear equipment suppliers – can be shelved. Alternatively, it must make a massive increase in the liability of the operator and explicitly include a clause on the liability of equipment suppliers. This is unlikely to affect non-US suppliers, who seemed quite willing to go ahead with deals even in the absence of such a Bill. Another step would be to insist that all nuclear power plants be bought on the basis of open global bids, and thus to do away with the “reservation” apparently made for US supplied plants.

Parliament could mandate that for large military deals (e.g., the $ 10 billion purchase of fighter aircraft), the supplier must agree not to sell certain specified categories of equipment to Pakistan (after all, the US imposes sanctions on Indian companies doing even purely civilian business in Iran). A Bill to bar purchase of civilian aircraft from countries that impose undue constraints on delivery of services from India (e.g., through excessive visa fees, quantitative restrictions on work visas, or other constraints on assignment-related movement of professionals) could be another appropriate move.

There could be many more – all in national interest, but none formally initiated or backed by the government. Many, particularly in the corporate sector, bemoan our argumentative and fractious democracy, and secretly wish for a more “forceful” government; yet, there are a great many positives, particularly because we speak in many voices, which we must learn to take advantage of. Will individual MPs step up to the plate and introduce such Bills in Parliament? Can we have our own Schumers?

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