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Feb 16, 2011, 05.58 PM IST | Source: CNBC-TV18

US visa fee hike temporary; not aimed at India: Gary Locke

Three months after president Obama's maiden visit to India, US commerce secretary Gary Locke is visiting with a hi-tech mission to enhance trade and economic ties between the two nations. In an interview on CNBC-TV18, Locke painted a broader picture of the legislation.

US visa fee hike temporary; not aimed at India: Gary Locke

Three months after president Obama's maiden visit to India, US commerce secretary Gary Locke is visiting with a hi-tech mission to enhance trade and economic ties between the two nations. However, the visit comes at a time when concerns over last year's US legislation that a hike in visa fees continues to cause anguish in India, specifically within the IT community.

In an interview with CNBC-TV18ís economic policy editor Siddharth Zarabi, Locke painted a broader picture of the legislation and what the global economic outlook is looking like at this point in time.

Below is a verbatim transcript of his exclusive interview. For the complete details watch the accompanying video.

Q: Let me begin by asking you one of the key questions and this is a more general question away from the complexities of trade and this is about the minor irritants in some wayís that if crept into the public discourse when it comes to relationships between India and the US, hike in visas, no solution on the totalization issue, the James Zadroga Act. A lot of stuff that seems to have crept into the public discourse seems to sour the relationship between these two countries which have been described as natural allies. What is your take on this, why is this happening?

A: We need to focus on the incredible progress that has been made over the last several years between India and the United States on a whole host of fronts, whether it is collaboration to fight weapons of mass destruction, to fight poverty around the world, to collaborate our research and development to cure some of the diseases that plague not just the people of India and the United States but indeed people around the world. And our trade relationship has really grown so astronomically.

Infact there are more IndianĖAmerican entrepreneurs within the United States and they lead all ethnic groups and minority groups in terms of entrepreneurship. We now have over 100,000 Indian students in America, studying in our colleges, Universities and the people of India in America have attained the highest positions in government, in finance, in business, in academia and the technology industry.

So I really think that as in any relationship and with any country there will be these little minor irritants but we need to focus on the positives. And how the people of India have contributed so much to the prosperity of America, creating jobs for the people of America with the businesses that have been created in America and now America would like to do the same in India. We have so many businesses that can help the government of India and the businesses of India achieve their objectives of raising the standard of living for the Indian people and creating even more jobs for the people of India.

Q: When you talk about more jobs for people of India, I remember when President Obama was here and one of the key messages that he took home in the manner the entire announcement was made about how India is also creating jobs for the United States. But I am going to come back to the issue of the visa fee hike. It has sent out a signal and you talk to people around here and they say that this is a irritant, it has been made to sort of apron that the United States is no longer willing to welcome Indian software professionals and there are continuously barriers that are being imposed in the entry and clearly services for India as an employment generator is also very important. How would you respond to some of this perception and criticism that people make of this matter?

A: I think that you need to look at the legislation and it was a temporary measure. Itís a measure to raise money so that we could actually address some of the problems that we have on the US-Mexican and the US-Canada border. So it is not really aimed at the people of India but really viewed as a mechanism  by which we could enhance the security of the US border.

And it is not targeted at just Indians or Indian technology companies. It is aimed at all companies that have more than 50% of their workers that are on H1 visas. Again itís a temporary measure. But we understand the sensitivity of this and we know that a lot of people are looking at other ways by which they can raise the same amount of money to address these issues of border security.

Q: When you call it a temporary measure can you elaborate on this?

A: Itís only in place for a few years. And so itís not a permanent measure and it only covers companies of a certain size, with a certain percentage of workers that have these visas.

Q: So thatís a big and important message that you are putting out here to our viewers in India that this is temporary it is not targeted at India or at Indian software companies, it is something that is driven by other concerns in the United States and possibly once they are taken care of this matter should pass?

A: The President and the administration have taken great pride in how we have stepped up our enforcement of our borders to crack down on people coming across our borders illegally. And again this was a measure or vehicle by which the members of congress and independent branch of the United States government seize to finding a way to pave for it. And it is not targeted at just Indian companies but any company from around the world.

Q: Since we are talking at a time when we have had these images come in and again this has had a huge impact on Indian minds. They were somehow being made to feel back home the shame of being tagged. It has become a hugely emotive issue and clearly while there must be genuine immigration related issues and we are not questioning the due process of law, but again in the public eye this has become yet another blow to the pride of India and going to the United States to study is a dream that most Indian youth have. So what is your take on that, what would you want to say to the current debate?

A: We know that this is a very sensitive topic and of course we value more than 100,000 Indian students who are studying in our American colleges and universities and doing incredible work, leaders in their academic classes, contributing to research and development that would create new discoveries, new scientific progress and even creating new companies, whether it is in the United States or India.

These are matters that are being addressed by the state department and homeland security. They are investigating this as quickly as possible, looking at this particular college which may be committing fraud. But we know that perhaps a lot of the Indian students were unwittingly caught up in this.

Q: The issue of totalisation,  the fact that Indian software professionals continue to pay for social security back in the United States then the system doesnít allow for repatriations in that sense, is there a possibility of that ever getting sorted out?

A: We would like to sort that out. There were specific rules that have been passed or laws passed by the United States Congress that would govern that reinforcement. And we really need to work through this issue. It is a law that applies to workers from any country around the world. We cannot simply come up with certain rules and apply to people from one country and treat people differently from another country. So we are working on that.

Q: Moving away from the irritants, and coming to the positives. The fact that Harley bikes are now available in India and Indian mangoes in the United States something that took some time to happen, but clearly it has happened. What is the big picture when it comes to our trade relations at this point of time. How hopeful, and how optimistic are you about the way our trade relations are shaping up?

A: If you look  at the trade between the two countries over the last several years they have more than doubled and they are growing by leaps and bounds. It really shows that when you have more open trade, there are benefits to people in both sides of the trading relationship. American companies offer great products and services that are highly valued and in great demand all around the world and these products and services can actually lower the cost for the people of India.

When you have American companies selling products here, often times they are made in United States but they are assembled here and put together here in India which then creates jobs for the people of India, and actually will help make Indian companies more profitable and lower the cost of doing business for the Indian companies, whether it is software that can be used by your grocery stores and businesses to communicate with their customers.

The more successful those Indian companies are, the more profitable they will be, and the more people they will hire. So this is the type of mutually beneficial partnerships and trading relationships that we see.

Q:  You mentioned mutually beneficial and I am reminded of something that took off at the last G-20 and this is about a sort of fund where money moves from the developed world to fund infrastructure including developing countries like India and India clearly has a huge infrastructure deficit. The talk of the fund was also raised during President Obamaís visit. What is the status of that fund, where are we? Is it going to be formalized soon? Can you offer us an update?

A: I really cannot give you the very specifics on the progress of that fund. But we know that India has enormous infrastructure needs. I think just a small percentage of all the roads in India are actually paved. And if we want Indian companies to grow, if we want to speed the delivery of food to the Indian people, food from the countryside into the cities you have to have a modern infrastructure system, not just roads but also rail, metros and also air transportation.

The costs are going to be absolutely enormous and this is where American companies stand ready to help the people of India. To bring some of that money in to help pay for the development of this infrastructure which will also create jobs for the people of India; building the roads, building the bridges, building the subway systems, building airports. And so this is the type of mutually beneficial partnership that the US and India would like to get into.

Q: We have talked about infrastructure but there are other fundamental issues that the Indian economy is facing and one is the current spate of high prices; commodity prices, part of the inflation is imported, it is a worldwide phenomenon and we are seeing the negative impacts in other countries as well. What is your take on the issue of allowing Foreign Direct Investment in multi-brand retail? Clearly we have Wal-Mart in India but in a different business in that sense, what sort of progress would you want India to make on that front?

A: We believe there should be a removal of a lot of barriers of Foreign Direct Investment (FDI) whether it is in multi-brand retail or even in pharmaceuticals and a whole host of Industries because the more that American companies and other companies from around the world are able to bring their products and services in, they can actually improve the business climate and create more jobs in India.

They can also help lower the cost of goods and services that the Indian people pay. The more competition you have, the more high quality there will be and a drive towards lower costs.

For instance in the retail sector even in the supply chain; the more America participation you have the more we can actually help create shipment of agricultural products from the countryside of India to the cities without the spoilage, because we know that the high cost of items especially in the food area is driven up because so much of the food spoils and rots before it actually reaches the consumer.

American companies can help provide that transportation, keeping it cold, keeping it fresh and preserving that so that the farmers will actually sell more and make more income. And it results in lower prices of the actual product for the consumer because not as mush has been wasted or has been spoilt.

Q: So you are saying probably the time has come for India to go ahead and bite the bullet on this matter?

A: That is a matter for the Indian government in terms of the pace and the timing by which that should occur. But we very much as a general policy support enabling American companies to participate in the retail sector in a much more expansive fashion than it now occurs.

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