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India-US trade talks hit new bump

India-US relations hit a new roadblock on Monday with the two countries postponing high-level trade talks citing unresolved issues. Yashwant Raj reports.

business Updated: Jan 10, 2012 22:58 IST
Yashwant Raj

India-US relations hit a new roadblock on Monday with the two countries postponing high-level trade talks citing unresolved issues.

“While considerable progress on developing the agenda for the TPF (trade policy forum) has been made, in view of the amount of preparatory work that remains to be done, the US and India have decided to postpone the TPF until later this year,” said a one-para communique from the office of the US Trade Representative (counterpart of the commerce ministry.

The communique made no mention of the outstanding issues, but reports quoting commerce ministry officials have identified access to the retail sector as the US’ main demand.

US trade representative Ron Kirk was scheduled to lead a delegation to India this week for the US-India trade policy forum talks with a commerce ministry delegation headed by Anand Sharma.

Talks are now likely to take place later in the year.

Officials in India said they were informed of the US decision late last week, and decided to go along because of issues outstanding from the Indian point of view. Of the highest priority among them were access to the US services market or outsourcing, easing visa conditions and totalisation.

The US collects social security, equivalent to the provident fund, from temporary Indian workers in the US, which are, however, not reimbursed to them when they return. This process is known as totalisation.

This deal, which the US has with others, has been among the agenda for Indo-US talks earlier, but remains unresolved.

Indian officials have also complained about the denial of US work visa to Indians working on software projects — all kinds, H1B (for high-tech qualifications) and L1 (intra-company transfers.

According to data released by the state department, there has been a decline in L1 visas to Indians, despite a surge in people seeking similar visas from China and many other countries.

The application fee for some of these visas was raised last year, mainly to fund a Border protection plan.

A legislation introduced recently in the House of Representatives plans to make outsourcing even more prohibitive.

The move has invited wide protests from India.

But this being the year of Presidential elections, elections to the House of Representatives and the Senate in the US; and assembly elections in major states in India, the issues are likely to remain unresolved for some more time.