The Border Security Bill Reeks of Protectionism
On August 12 2010 President Obama of the US signed into law a Border Security Bill that increases the fee for H1-B visas by US$ 2000 – 2500. This was clearly intended to shield unemployed US IT specialists against “imports” and is a blatant protectionist measure.
India has been exceptionally victimized by the Bill since it has thousands of H1-B IT specialists working in the US at any one time. The US should have first thought of raising duties on Chinese imports (which have taken away thousands of manufacturing jobs from the US). But then, of course, why would it, since China has loaned the US $844 million (by buying US Treasury Bonds, see http://www.ustreas.gov/tic/mfh.txt).
There are several ways in which India can counter this discriminatory move:
- India could choose an imported product for which the US is the primary source and increase the duty rate on it (an example would be diamonds; India imports $1.4 billion of them from the US annually)
- India could take the matter to the WTO (there are already plans to do this)
- The Bill is expected to cost Indian companies around $200 million. India could ask for this much additional discount next time it makes one of its massive defense purchases from the US.
Of the three above alternatives, in my opinion the second is preferable; the others suggest behavior similar to that of the US’s… why should India seek to emulate that which it condemns?
