Indian IT to pay for U.S. 9/11 attack
By siliconindia   |   Friday, 24 December 2010, 23:00 IST   |    5 Comments
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Indian IT to pay for U.S. 9/11 attack
New Delhi: Indian government has decided to increase the rates for the technology companies in the U.S. along with the move to slam down the step taken by U.S. of imposing a new tax which seeks out help for all the victims of 11th September attacks. A protest has been called for by the Indian government by calling the bill as a 'retrograde step' in Indo-US trade relations due to the legislation of U.S. Congress which is looking forward to make the Indian firms such as Infosys, TCS and Wipro pay for the victims of September 11 terror attacks. The legislation is estimated to raise a $4.2 billion with the strict imposition of the new 2 percent excise tax on all the goods and services which are bought from foreign suppliers in India and China. According to the announcement made, the move will be made effective from July next year. In August, the U.S. administration had passed the Emergency Border Security Bill, which aimed to raise $600 million by increasing the fees that companies have to pay to get H1-B and L1 visas for skilled workers, which largely affected Indian IT companies as they use them to ship engineers to the US for onsite work. According to the National Association of Software and Services Companies (Nasscom), the increased visa fees would cost the Indian industry at least $100 million a year."The most disturbing part of the development is that the US continues to exhibit and practice indirect protectionism, by adopting policies that restrict free trade and are discriminatory trade practices," Nasscom said in a statement on Thursday. The Commerce and Industry Minister Anand Sharma had even mentioned about the proposals in his letter to the US trade representative Ron Kirk which are going against the decision taken by both countries recently in order to reduce the trade barriers. "The passing of such legislation would, to my mind, be a retrograde step for greater trade engagement between India and US," Mr Sharma wrote. Kirk is yet to reply formally to the letters. Anand Sharma also opined that the act will prove to be another blow to the Indian IT companies as they would have to bear the costlier H1-B and L-1 visas for five years from four years earlier. Taking this into consideration, he has asked Kirk to take 'personal interest and intervene urgently.' Validity of the proposed period for the higher visas fees had been reduced only after India had to come down to protests. "The Christmas miracle we've been looking for has arrived," US senators Charles Schumer and Kirsten Gillibrand, who supported the bill, said in a joint statement. The bill was voted 206 to 60 in favour on Wednesday. It is expected to be signed by President Barack Obama this week. Som Mittal, the President of the National Association of Software and Services Companies clearly expressed his bitterness towards the U.S. lawmakers who according to him have started an unfair practice of taxing in order to clear out their bills for the domestic issues. "The bill is a violation in spirit of the joint communique signed by President Obama and Prime Minister Manmohan Singh." The bill is called as James Zadroga 9/11 Health and Compensation Act of 2010 has been named by the authorities after a 34-year-old New York police department officer, who died in 2006 from a respiratory disease. There are about 60,000 workers enrolled for treatment programs related to 9/11 attacks. With the assistance of this act, it would be extremely handy for the victims of September 11 attacks to be able to claim health compensation from the fund."It is very unfortunate that the US is raising its work visa fees for unrelated events. It is just very unfortunate," said TV Mohandas Pai, head, HR and member of the board, Infosys. Commerce minister Anand Sharma added that the bill will send a negative signal to Indian investors who have remained firmly committed to partnering with the American companies and have supported jobs in the US even at the peak of the economic crisis. The bill is also being opposed by the US Chamber of Commerce and Washington-based advocacy group Americans for Tax Reform. US The Chamber of Commerce has companies such as Microsoft and Google, which employ Indian software engineers on H1-B visas.

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