National IT companies pay more than $1 billion a year to comply with social security standards for their Indian employees in the United States, despite the fact that these people do not work there long enough to qualify for these benefits. .
India and the United States agreed on Tuesday to ensure greater market access for certain agricultural products, continue their engagement on critical visa issues and facilitate the movement of skilled professionals, as the two sides held Trade Policy Forum (TPF) meeting after a four-year hiatus to give new impetus to bilateral trade.
Trade and Industry Minister Piyush Goyal and US Trade Representative Katherine Tai, who co-chaired the TPF meeting, agreed to pursue a social security totalization deal. The decision to work towards a freer movement of professionals and the totalization pact, long sought by New Delhi mainly to protect its IT industry against American non-tariff barriers, apparently marks a break with the strict American policies of recent years, especially under Trump’s rule. administration.
National IT companies pay more than $1 billion a year to comply with social security standards for their Indian employees in the United States, despite the fact that these people do not work there long enough to qualify for these benefits. . A totalization agreement eliminates double social taxation. However, the US has remained evasive on a full restoration of GSP (Generalized System of Preferences) benefits for India. Under the GSP, India could ship duty-free goods worth $6-6.5 billion a year (but the potential tariff the US would have waived was only $240 million in 2018).
“…the United States noted that this could be considered, as warranted, in relation to eligibility criteria determined by the U.S. Congress,” according to a joint statement after the meeting.
Two-way merchandise trade between the United States and India is expected to top $100 billion for the first time in FY22, compared to around $81 billion last fiscal year when the pandemic hit the chains. ‘supply.
Interestingly, the two sides agreed to engage more to find mutually agreed solutions to outstanding disputes at the World Trade Organization (WTO), just days before the start of a ministerial meeting of the trade body. worldwide (from November 30).
Both sides emphasized private sector collaboration in both countries to strengthen ties in critical sectors – including cyberspace, semiconductors, AI, 5G, 6G and communications technologies. next-generation telecommunications – and supporting resilient and secure global supply chains.
The two sides agreed to finalize market access facilitation for mangoes, pomegranates and pomegranate arils from India, and cherries and alfalfa hay for animal feed from the United States. United. They also decided to resolve market access issues for Indian grapes and US pork and pork products.
New Delhi also pointed to delays in US regulatory inspections of Indian pharmaceutical facilities.
Both Goyal and Tai agreed to use the revitalized TPF and its working groups as a means to quickly address new business issues as they arise, and that they would assess progress in this regard quarterly.
The United States has offered to export ethanol to support India’s lofty goal of reaching 20% ethanol blended in gasoline by 2025.
Recognizing that legal, nursing, accounting and electronic payment services can facilitate the growth of trade and investment, both parties agreed to promote engagement in these sectors.
The two countries pledged to deepen bilateral engagement to promote the digital economy and to explore the adoption of common principles ensuring that the Internet remains open to the free exchange of ideas, goods and services.
The TPF working groups, made up of officials from both countries, have been asked to develop, by March 2022, action plans to achieve substantial progress. The remaining senior officials would regularly review working group activity and identify a set of specific business outcomes that could be finalized for an intersessional TPF meeting to be held by mid-2022.
Both parties stressed the importance of trade in creating jobs and opportunities for the working population and the relationship between trade and environmental issues. They also exchanged views on approaches to increasing the use of renewable energy and other clean technologies to achieve net zero emissions, including by aiming to mobilize finance and scale clean technologies. innovations, as agreed in the India-US 2030 Climate and Clean Energy Partnership, according to the joint statement.
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