India needs foreign direct investment (FDI) to boost economic growth. At the same time, it has tax laws or tax demands that foreign companies must comply with. But India has been of late accused of “tax terrorism” -- a fashionable term to describe either notices to pay tax or the controversial “retrospective tax” imposed by the previous UPA government that hurt foreign companies such as Vodafone.
Now, look at the United States. Just as India needs FDI for growth, the US needs foreign talent, especially in high-skill areas such as technology.
But, at the same time, Indian information technology companies such as Infosys and Tata Consultancy Services (TCS) are occasionally, if not frequently, accused of violating visa regulations related to work permits, such as the H1-B visa.
Now, the big question: Should India’s media or the government accuse the US of “visa terrorism?”
Last week, Tata Consultancy Services (TCS) and Infosys said they were “fully compliant” with US immigration rules as they faced “extra scrutiny” by the US department of labour.
Infosys has also faced a lawsuit by a former employee on the grounds that he had been punished or sidelined for blowing the whistle on visa frauds.
While Indian companies politely affirm that they “cooperate” with US agencies, this is in stark contrast to India, where any tax notice or law is seen as threatening foreign investment.
The fact is that India needs US investments just as US needs Indian talent and it arguably remains the biggest supplier of high- technolo g y talent to the US and President Obama is a big votary of Stem (science, technology, engineering, maths) and his administration has given a big boost to Stem education.
Commerce minister Nirmala Sitharaman and industry association Nasscom need to wake up to the visa issue with a sense of proportion and fearlessness. It cannot be that when India does something, it is called “tax terrorism” while similar moves by the US are responded to with an apologetic attitude.
India should also reserve the right to take up the matter at the World Trade Organisation (WTO), as talent becomes an important force in global trade.