Indian IT sector eyeing free trade pact with US
Navhind Times, India, Tuesday, February 28, 2006
Indian IT sector eyeing free trade pact with US
IANS Mumbai Feb 27: India’s dollar-spinning information technology industry is looking forward to some positive initiatives towards inking a free trade agreement with the US in the services sector during the US President, Mr George W Bush’s visit to the country.
With just a couple of days to go for the arrival of Mr Bush in India on Wednesday, hopes are soaring that the US administration would also raise the visa limit for the entry of Indian tech professionals in the world’s largest economy.
The US is the biggest market for India’s software services and business process outsourcing firms, accounting for nearly 70 percent of the total exports that are likely to touch a staggering $ 24 billion in the year ending March 31.
“A free trade agreement with the US in the services sector will be a win-win situation for both the countries,” said Mr Kiran Karnik, president of the National Association of Software and Service Companies (Nasscom).
“It (the agreement) will complement both the economies. While their strength is the vibrant venture capital and marketing skills, the Indian IT industry is known globally for its vast and skilled manpower base,” Mr Karnik told IANS.
“Despite the Indian IT firms’ foray into new geographical locations, the US continues to be the biggest and rapidly growing market. A free trade agreement in services will greatly boost the bilateral business relations.”
A large base of skilled talent that speaks English and service delivery expertise at a significant cost advantage have lured a large number of US firms like GE, Microsoft, Cisco and American Express to outsource jobs to India.
The Indian IT industry also hopes that Mr Bush’s talks with domestic policymakers and business leaders would also focus on America’s “restrictive immigration regime” that, they say, acts as roadblocks in boosting tech trade relations.
According to local software makers, the current cap of 65,000 H1B visas, which allow technology professionals to work up to six years in the US, is inadequate to tap the emerging business opportunities there.
They say the Bush administration should consider relaxing the cap since US companies need a large number of Indian technology professionals to help them stay competitive in the global market.
“There should be specific services industry related visas and there should be no cap or delay in processing them,” said Mr Karnik.
Lauding the US government’s non-protectionist attitude even in the face of an outsourcing backlash, Indian IT firms hope the presidential visit would enhance strategic cooperation between companies in the two countries.
Outsourcing and loss of American jobs had been hot button issues in the US presidential election held in November 2004.
“A lot of technology companies in India are hoping for better relationship with the US,” said Mr Promod Haque of Norwest Venture, a US-based venture-capital firm with business interests in India.
“It’s a good signal on the part of the US that it looks at India as a strategic opportunity to further develop trade and business,” he added.
“While we should continue to work on the nuclear cooperation issue that is obviously very controversial, I think there are easier ways to build some trust and cooperation that in turn would create lots of jobs in India and the US.”
Mr Haque was referring to the differences on a landmark civilian nuclear accord to give India access to US nuclear equipment and fuel to meet the spiralling energy needs of one of the world’s fastest growing economies.
The Indian American venture capitalist said that there was a growing realisation in the US that India was emerging as a very significant economy and, therefore, there was an opportunity for the two countries to work together very closely.
