May 2013 India Review Ambassador’S PAGE America Needs More High-Skilled Worker Visas a Generous Visa Policy for Highly Skilled Workers Would Help Everyone

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A Publication of the Embassy of India, Washington, D.C.

May 1, 2013

I India RevieI w Vol. 9 Issue 5 www.indianembassy.org

IMFC Finance Ministers and Bank Governors during a photo-op at the IMF Headquarters in Washington, D.C. on April 20. Overseas capital best protected in India — Finance Minister P. Chidambaram

n India announces n scientist U.R. Rao n Pran honored incentives to boost inducted into with Dadasaheb exports Satellite Hall of Fame Phalke award Ambassador’s PAGE India is ready for U.S. natural gas There is ample evidence that the U.S. economy will benefit if LNG exports are increased

he relationship between India and the United States is vibrant and growing. Near its T heart is the subject of energy — how to use and secure it in the cleanest, most efficient way possible. The India-U.S. Energy Dialogue, established in 2005, has allowed our two countries to engage on many issues. Yet as India’s energy needs con - tinue to rise and the U.S. looks to expand the marketplace for its vast cache of energy resources, our partner - ship stands to be strengthened even facilities and ports to distribute it macroeconomic scenarios, and under further. globally. every one of them the U.S. economy Despite the global economic slow - There is a significant potential for would experience a net benefit if LNG down, India’s economy has grown at a U.S. exports of LNG to grow expo - exports were increased. relatively brisk pace over the past five nentially. So far, however, while all ter - A boost in LNG exports would have years and India is now the world’s minals in the U.S. with capacity to many positive effects on both the U.S. fifth-largest energy consumer. It export LNG are authorized to ship it to and Indian economies. For the U.S. it imports 75 percent of its energy (espe - countries with which the U.S. has a would help create thousands of jobs cially oil and petroleum products) free-trade agreement, only one — the and an expanded revenue stream for today and expects to import 90 percent terminal at Sabine Pass in Louisiana the federal government. For India, it over the next decade. As a result, India — has received authorization to export would provide a steady, reliable supply is working hard to diversify its energy to non-FTA countries. of clean energy that will help reduce our supplies. Still, the demand for energy Authorization for other terminals to crude oil imports from the Middle East keeps growing at a rate of 5-6 percent export LNG to those countries is cur - and provide reliable energy to a greater annually. My country needs to secure rently awaiting a review by Department share of our population. For both coun - more supplies to foster the socio-eco - of Energy. As part of its own due dili - tries, which are committed to environ - nomic development of millions of our gence, the department commissioned a mental sustainability, increasing the use people who are still living in poverty. report on the domestic economic and transport of LNG globally will help Happily, the U.S. has experienced a impact of increased LNG exports. The put into greater use one of the cleanest boom in the production of natural gas. study analyzed more than 60 different energy sources in the world. 2 The ability to tap large formations by The prospect of increased Indian advanced technologies has yielded a For both countries, investment in the U.S. natural-gas large amount of this energy resource market will usher in a new era for a that achieves significant savings com - increasing the use and strong and mutually rewarding India- pared with diesel, especially when used transport of LNG U.S. energy partnership. Through it, in high-mileage heavy-duty vehicles. globally will help put we will further consolidate our strate - Liquefied natural gas is transported gic ties and deepen cooperation for the more easily than other forms of energy. into greater use one of benefit of millions of people in both Significant investments, including the cleanest energy countries. some from India, have been made in sources in the world technologies designed to harness LNG (Published in Wall Street Journal on safely and efficiently and to build new April 7, 2013)

May 2013 India Review Ambassador’s PAGE America needs more high-skilled worker visas A generous visa policy for highly skilled workers would help everyone. India and the United States would come out winners 3 resident Obama has state and federal tax revenues would, described the U.S.-Indian Capping the number of sadly and inevitably, decline. relationship as the “defining work visas available to Indian IT companies and the visa- partnership of the 21 st cen - holders they sponsor play a vital and P highly-skilled Indians tury.” Given the rich, multidimen - vibrant role in America’s economy and sional engagement between our two would harm IT services the communities in which they work. countries and the strategic conver - Highly skilled foreign-born individuals gence of our values and interests, he have been praised repeatedly for their is absolutely right in doing so. The The expertise of these workers is cru - invaluable innovations and contribu - impressive growth in our trade and cial because they helped develop many tions in the U.S. The IT companies economic relations provide a robust of the devices and software that main - that sponsor them are also regularly foundation for this vision. tain and protect networks. Without recognized for their work and their Less than a decade ago, trade their know-how, IT would simply not contributions to the American way of between our two countries was $35 work the way it should. life. These Indian companies are the billion-a-year. Today, that number has The teams doing this work are most vocal cheerleaders of the closer nearly tripled to $100 billion and is highly trained and are often drawn engagement between India and the poised to climb even higher. Major from around the world. They are United States and have played no U.S. companies look to India as an deployed from among the best avail - small role in bringing our two nations essential outlet for growth — and vice able and qualified talent. Indian IT closer together. versa. As the U.S. Congress considers Today, Indian-based IT service immigration reform, this trajectory — providers employ well over 50,000 and the mutual benefit it brings — Trade between India and U.S. citizens and recruit and hire more should shape the conversation. the U.S. is nearly $100 each year. The industry supports more Critics of current immigration laws billion annually than 280,000 other local U.S. hires suggest restricting access for Indian and aids many U.S.-based companies companies to certain types of high- in developing new products and skilled worker visas (H-1B and L-1) services companies use local hires improving operations and efficiencies. that guide the mobility of professionals whenever possible, of course. But This, in turn, helps them both preserve who help our businesses grow. Some depending on availability of skill sets, and create jobs here in the U.S. prefer even capping the number of these companies require to use visa- As U.S. policymakers move for - work visas available to highly skilled holders in addition to local talent. ward with the much needed efforts to Indians or imposing extra fees on spe - Without these visa-holders, U.S. reform the immigration system, we cific types of Indian firms. Information businesses and consumers would not respectfully urge that they consider technology services would be disad - benefit from the services they have the impact of their decisions on the vantaged by such changes. come to rely on. Jobs would not be ability of both U.S. and foreign-based Many IT companies, such as Tata created and, in fact, could go else - companies to expand now and in the Consultancy Services, WIPRO, where, including overseas. Local, future. The inspirational history of Infosys and HCL, that are based in economic synergy between our two India bring employees to the U.S. — nations should serve as our guide to and for good reason. They provide the Indian IT companies the future. A generous visa policy for continuity and institutional knowledge play a vital and vibrant highly skilled workers would help required to serve commercial and gov - everyone; both nations would come ernmental clients well — in the same role in the US economy out winners. way that Americans often staff the for - and its communities (Published in USA Today on April eign offices of their own corporations. 14, 2013)

May 2013 India Review Cover STORY

Finance Minister P. Chidambaram speaking at the Harvard University on April 16. ‘Overseas capital best protected in India ’ During his five-day visit to the U.S., Finance Minister P. Chidambaram stressed that the investors in the U.S. had much to gain from investments in India, especially in infrastructure sector

ith a view to further “Best guarantor of investment protec - and new markets, you have to look strengthening economic tion is a stable and democratic political East (and perhaps South)” partnership between structure, a belief in the rule of law, He said that emerging markets WIndia and the U.S., and a transparent and independent would realize their full growth poten - Finance Minister P. Chidambaram vis - legal system. India has all three,” tial as they reap their demographic ited the U.S. from April 16-20. Minister Chidambaram said. dividends. “Nearly one-half the addi - Through a series of interactions with In his speech “Rise of the East: tions to the Indian labor force over the financial community and investors Implications for the Global the period 2011-30 will be in the age to understand their participations and Economy”, the Minister tried to allay group 30-49, even while the share of concerns, the Finance Minister creat - apprehension of the global investors this group in advanced countries will ed awareness about the vast investment on India’s tax policy, saying the decline. This means greater produc - 4 opportunities in India in both the port - changes won’t be done on the whims tion, savings and investment in India folio and direct investment areas. of the government. as the demographic dividend is Minister Chidambaram also held bilat - Underlining the importance of reaped,” Minister Chidambaram eral meeting with U.S. Treasury emerging markets in the global econ - said. Secretary Jack Lew during the visit. omy, Minister Chidambaram said, The Finance Minister said the In his address to the students and “At purchasing power parity, emerg - investors in the U.S. had much to gain faculty of Harvard University on April ing markets accounted for 80 percent from investments in India, especially in 16, Minister Chidambaram said over - of world growth, with China infrastructure sector. “India saves a lot seas capital was best protected in India accounting for 35 percent and India — the savings rate at its lowest in and the country had all the ingredients accounting for 10 percent. If you are recent years was about 30 percent of to attract foreign direct investment. a businessperson looking for growth GDP. But India’s savings fall short of

May 2013 India Review Cover STORY

‘Knowledge workers should not be confused with immigrants’ inance Minister P. Chidambaram has Fflagged to the U.S. India’s concerns over the proposed fee hike for H-1B visas coveted by Indian technocrats, saying “knowledge workers” should not be confused with immi - grants. The Finance Minister raised India’s con - cerns at a meeting with new U.S. Treasury 5 Secretary Jack Lew on April 19 as they did a “tour of the horizon” of issues between the two countries. While the Indian Embassy in Washington and the departments concerned would “carefully go through the bill” running into 840 pages “there are some provisions related to the H-1B and L1 visas which require a higher application fee if a certain threshold is crossed in employing Indians on site,” he said. Noting that the bill proposed by the Senate Gang of Eight is of immigration, Minister Chidambaram said he told Secretary Lew that “temporary relocation of knowledge workers on site to service a client should not be Finance Minister P. Chidambaram with U.S. Secretary of Treasury Jacob J. Lew during their bilateral confused with immigration”. meeting on the sidelines of IMF’s Spring Meetings in Washington, D.C. on April 19. its investment needs. Moreover, India At purchasing power parity, emerging markets needs intelligent risk capital that will ensure that investments are monitored accounted for 80 percent of world growth, with and brought to fruition. And India China accounting for 35 percent and India accounting needs long-term patient capital that is for 10 percent. If you are a businessperson looking for willing to collect a return over many years,” he said. growth and new markets, you have to look East (and The Finance Minister said unlike perhaps South) — Finance Minister P. Chidambaram other countries of the region, India had no desire to become an imperial ing sovereign wealth funds/university IMFC Plenary Meeting and or a regional power. India’s focus endowments/insurance funds among Development Committee Meeting. was on helping other countries catch others. The Finance Minister The Finance Minister also attended the up to the rest of the world. He point - addressed about 150 sovereign G-20 Finance Ministers’ and Central ed out that none of the $1 billion in wealth funds/university endow - Bank Governors’ Meeting held on the aid being given to Afghanistan was ments/insurance funds in New York sidelines of IMF-WB Meetings. military related. on April 17. He also had a luncheon Minister Chidambaram also participat - He said that China and India would meeting with the members of U.S.- ed in an event at the Peterson Institute continue to drive global economic India Business Council (USIBC) for International Economics in growth, with China growing at 8-8.5 during his visit to New York. The Washington, D.C. during the visit. percent and India at 6.1-6.7 percent Finance Minister held one-to-one between 2013 and 2014. meeting with the President and CEOs The full text of the Finance Besides delivering his address at of leading U.S. companies. Minister’s speech on ‘The Rise of the Harvard University on the theme He reached Washington D.C. on the East: Implications for the “Rise of the East: Implications for the April 18 to participate in World Global Economy’ can be viewed at: Global Economy”, the Finance Bank/IMF Spring Meetings. The https://www.indianembassy.org/news_f Minister addressed about 100 lead - Minister took part, among others, in iles/News_File_2139.pdf

May 2013 India Review Cover STORY

Finance Minister P. Chidambaram during a luncheon meeting with the members of U.S.-India Business Council (USIBC) during his visit to New York. Chairman of USIBC Ajay Banga is also seen. India committed to key economic reforms: FM n a road show in North sectors. It is always useful to talk He also expressed confidence that America to try and boost to foreign investors,” he said on India would soon achieve its potential capital flows into India, April 19. growth rate of eight percent. Noting OFinance Minister P. The Finance Minister held road that India’s savings rate had been Chidambaram assured investors that shows in Toronto, Boston and New between 30 and 36 percent, he said New Delhi was committed to key York to attract foreign investors to this should translate into a growth economic reforms. India. “I think everybody recognizes rate of 8 percent. “Message is that we are committed that India is an attractive market. Minister Chidambram said he to key issues like fiscal consolidation, Everybody recognizes that India is a believed in the long run, it was in containing inflation, improving the market in which you can do business India’s interest to negotiate a bilater - supply side, project implementation, and make reasonable profit,” said the al Free Trade Agreement (FTA) with independent regulators for critical Minister. the U.S.

Fiscal consolidation India’s top priority: Minister Chidambaram ddressing the Peterson Institute for Speaking on India’s economic outlook and AInternational Economics in Washington, the status of its economic reforms, the D.C. on April 19, Finance Minister P. Minister said the government had constituted Chidambaram said bringing down fiscal the Cabinet Committee on Investment to fast- deficit, inflation and accelerating the pace of track the process of project clearance. He project implementation were among India’s pointed out that the Cabinet Committee on top priorities. Investment had cleared projects worth over He said India had successfully brought $14 million in just three meetings. The 6 down fiscal deficit from 5.9 percent in 2011- Minister pointed out that India had taken sev - 12 to 5.2 percent in 2012-13. “Whatever it eral measures to substantially cut down sub - takes, we will cut the fiscal deficit by 60 basis sidies in LPG, petrol and diesel. point every year,” he said. The Finance Minister Chidambaram said India had the Minister said as a result of the steps being potential to grow at 8 percent. “The idea is to taken by the government, inflation too was go from five per cent growth rate to six per - now trending downward. The government cent plus growth rate... In 2014, we hope to would take more steps on the supply side to go to seven percent growth rate and the year Finance Minister P. Chidambaram speaking at the bring down inflation and ensure 7 per cent Peterson Institute for International Economics in after achieve our potential of eight percent growth rate next year. Washington, D.C. on April 19. growth rate,” the Minister said.

May 2013 India Review Cover STORY ‘EMEs strongest source of global growth’ Finance Minister P. Chidambaram said that to enhance the effectiveness of the IMF, it was important to have a clear shift of the quota shares in favor of the emerging market and developing economies

IMFC Finance Ministers and Bank Governors during a photo-op at the IMF Headquarters in Washington, D.C. on April 20.

ndian F inance Minister “Volatility in oil prices also remains a The Minister said that to address the P. Chidambaram said due to concern for EMEs,” Minister impact of global growth slowdown and their resilient domestic demand Chidambaram said. several domestic constrains on the Iconditions and healthy banking He said that in the interest of safe - Indian economy, the authorities in sectors, the emerging economies guarding global economic and finan - India had taken several measures in the remained the strongest source of glob - cial stability in the coming years, it was recent period. “The policy focus in al growth. Addressing the 27 th important to have “an early conclusion recent months has been, on contain - Meeting of the International Monetary of the discussions for a new quota for - ment of fiscal deficit, along with meas - and Financial Committee, on the side - mula and that the 15 th General Review ures that would boost investment levels lines of the IMF-World Bank Spring of Quotas (GRQ) will be started and in the economy and help raise the Meetings 2013, in Washington, D.C. completed in time”. growth rate,” he said. on April 20, the Finance Minister said “In order to enhance the credibility Finance Minister Chidambaram that as a result of improved financial and effectiveness of the IMF, it is pointed out that to accelerate the pace market conditions in the world, capital important that there be a clear shift of of implementation of large projects a flows to emerging economies like India the quota shares in favor of the emerg - Cabinet Committee on Investment had gone up. He, however, said that ing market and developing economies, had been set up. He expressed hope “policymaking in EMEs will need to (EMDEs), and that this shift is that the recent government measures continue to be vigilant to the possibili - achieved not at the cost of other would help revive investment activity in ty of financial instability resulting from EMDEs but by the space yielded by India and help take the economy to a any reversal of capital flows”. advanced economies,” he said. high growth trajectory.