Friday, July 12, 2013: India will push the US government to abandon the planned immigration bill in exchange of putting a freeze on the go-local manufacturing policy for electronic products. While the policy to promote local manufacturing can severely affect US electronic giants such as Cisco and Hewlett Packard, the immigration bill bears negative effect on Indian IT companies.
As informed by a top government official, the concerns from both sides were discussed during the last visit of US Secretary of State, John Kerry. “The US wanted us to address the concerns of American business if we wanted our concerns on the treatment of Indian businesses in the US immigration Bill to be heard,” the official reported.
The US industry had been pushing against the go-local policy, which involves government institutions and telecom players to buy at least 30 per cent of their electronics and hardware requirements from producers with established manufacturing units in India.
The policy, also termed as the preferential market access, required the manufacturers to ensure that value addition happens at a domestic level and not just assembling of products. Though the IT Ministry wanted to go ahead with the policy on security grounds, the government put it on hold last week after intervention from Prime Minister’s Office. Prime Minister Manmohan Singh will visit US and discuss the concerns of the Indian IT companies with President Barack Obama in September.
The new legislation passed by US Senate has increased the cap on H-1B visas from 65,000 to 1,10,000. However, there are restrictive clauses that can hurt Indian firms such as Infosys and TCS. If it becomes a law, it will curb a company having more than 50 per cent of its workers on H-1B from applying for more visas from the year 2016 or pay an unreasonable fee of $10,000 per visa.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine
