All posts by Aanand Kharde

Immigration Blog

The beginning of Brain Drain 2.0?

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There has been a lot of sound and fury over the introduction, or rather the re-introduction of the proposed Startup Visa  by Sen. Kerry and Lugar in the Senate. Much of the commentary coming out of India (including mine) almost pre-supposes that the legislation will be passed shortly though this is not necessarily the case. In fact, the prior version of the Bill expired in Congress in 2010 since it couldn’t gain enough momentum. Even the most ardent supporters of the legislation only give it a 1% chance of success and predict it will go the way of the previous legislation unless sufficient political momentum is built up through lobbying and community mobilization.  Nonetheless, the introduction of the Bill provides an opportunity to discuss the basic premises underlying the Bill, and their possible impact.

That this Bill is being introduced in a country which has always been highly conflicted about migration and at a time when the economy is in the relative doldrums speaks volumes in itself. Senator  John Kerry, while talking up the Bill, described it as one that was meant to keep America’s leadership in the innovation sphere. In his words, “Global competition for talent and investment grows more intense daily and the United States must step up or be left behind.”  Other countries such as the United Kingdom are also coming out with versions of their own, indicating that these words go beyond mere hyperbole.  The emphasis of immigration policies seems to have shifted from attracting new talent to retaining the foreign talent trained in the United States that is already at hand. It is with this intent that H1B visa holders and foreign students have been included within the ambit of the Visa for the first time.

Going by the numbers, there will be many takers for this Visa if and when it comes into fruition. According to the U.S. Government Accountability Office (GAO), Indians make up 46 per cent of all H1B visa holders, the numbers of which range between 650,000 to 1 million.  Similarly, there are over 100,000 Indian students in the United States. According to a Brookings Institution Study,  between 1994 and 2005, 10,836 doctorates or  11% of all Doctorates awarded in the Science and Engineering streams, went to students  from India.

Whatever discussion there is in India is around the impact of the proposed Bill on the nascent startup ecosystem in India which was gathering steam partly on the back of the reverse migration phenomenon. One blog post even goes as far as to use the title “Startup Visa And The Impact on Indian Startup Ecosystem [BrainDrain 2.0].” Another post wonders why the Indian government doesn’t come out with a Startup Visa of its own to attract Indian and other entrepreneurial talent to india.  However, the bottomline remains that none of this will help unless it becomes easier for businesses to set up shop in India.  Till then, any wannabe entrepreneur, given a chance, will wing his way to Silicon Valley, considering it better to be a participant in the brain drain than have his brain in the drain. If the competition for talent and skills gets any tougher, the Indian government could consider the easy way out and did what it once did in 1964 when it restricted the issuance of passports to medical personnel  “to check their exodus in the national interest.”

India-US Relations Blog

WikiLeaks and US-India Relations

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Whatever else it says about the propriety of India’s political class, the latest tranche of WikiLeaks cables now being dispensed by The Hindu newspaper contains a sobering lesson for US-India relations. The revelations about the parliamentary chicanery surrounding the 2008 civilian nuclear accord, intended to be a launching pad for a new era of bilateral dynamism, can only reinforce lingering doubts in Washington about whether India’s political institutions are even capable of acting on the ubiquitous rhetoric one now hears about taking relations to a higher plane.

PhotoIt came as a shock to U.S. officials that the nuclear agreement, which garnered strong bipartisan support on Capitol Hill, provoked extraordinary melodrama on Raisina Hill.  As the Washington Post noted in amazement at the time, “if New Delhi’s politicians cannot find a way to say yes to such a clearly advantageous agreement with a natural ally, the next U.S. administration no doubt will think twice before trying anything like it.”  Of course, Prime Minister Manmohan Singh finally did manage to push the accord through the Indian parliament, but only after an extended and acrimonious debate. It was especially disconcerting that the debate devolved into an unprecedented parliamentary vote of confidence regarding a foreign policy issue. Singh’s narrowly-won victory was possible only through resort to some exceptional measures, including the furloughing from jail of members of parliament who had been convicted of murder and other serious crimes.

As part of the debate, the main opposition party, the Bharatiya Janata Party, accused – in rather theatrical fashion – the Congress Party and its allies of paying hefty bribes in exchange for votes. A subsequent inquiry concluded that there was insufficient evidence to support the claim. But now the WikiLeaks cables give renewed credence to the allegation. In a dispatch sent a few days before the crucial confidence vote, the U.S. Embassy in New Delhi noted that the Congress Party machine was “working overtime” to ensure victory, including assembling cash-filled war chests “lying around the house for use as pay-offs.” The cable reports that members of the Rashtriya Lok Dal, a small party based in Uttar Pradesh, had already agreed to trade their votes in exchange for $2.5 million bribes and that an unsuccessful attempt had been made to inveigle members of the Akali Dal, a small Punjab-based party. Kamal Nath, a Congress Party veteran then serving as Minister of Commerce & Industry, was described as “helping spread largesse.” According to the cable, a Congress Party insider told an Embassy official that “formerly [Nath] could only offer small planes as bribes” but “now he can pay for votes with jets.”

These are serious – albeit unverified – allegations that only add to the thickening taint of corruption now engulfing Prime Minister Singh’s government. Of course, log-rolling and intrigue are nothing new in Indian politics, and those implicated in the cables have denied their veracity. But to policymakers looking on in Washington, what must be most dismaying is that, in order to secure passage of an agreement so obviously favorable to India, the Congress Party had to engage in such extraordinary steps. Apparently, the “normal” rules of parliamentary bargaining do not apply to significant foreign policy issues involving the United States.  For those, the Congress Party has to up the ante – from small planes to jet aircraft.

The WikiLeaks cables also do nothing to strengthen the BJP’s credentials for principled leadership. During the debate over the agreement, Jaswant Singh insisted that the party’s opposition was not about tawdry partisanship but rather involved solemn issues of national sovereignty and military preparedness. But the opposite now appears true. In a March 2009 conversation with the U.S. chargé d’affaires, BJP supremo L.K. Advani connected the party’s stance to “domestic political developments then at play in India” and downplayed previous declarations that a future BJP government would “reexamine” the accord.

The WikiLeaks dispatches hardly inspire confidence in New Delhi’s credibility as a serious strategic partner.  Prime Minister Singh deserves kudos for the political resolve he displayed during the tumult over the nuclear agreement. But his victory was also pyrrhic, revealing just how isolated he is inside the corridors of power. And if there is any substance to the latest accusations of political shenanigans, his reputation for probity will be further dented. For their part, BJP grandees stand exposed as petty partisans rather than stalwart champions of the national interest.

There are plenty of reasons to criticize the Obama administration’s approach to bilateral relations. But the next time the Indian commentariat is tempted to indulge in the “Obama disses India” narrative, one might first inquire into New Delhi’s own capacity for far-sighted statesmanship.

India-US Relations Blog

Maximum India

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The Kennedy Center’s mega-celebration of Indian culture – an extravaganza dubbed “Maximum India” – is now well underway, with sold-out performances and throngs of people in attendance. The three week long festival is the latest indicator of how decisively American perceptions about the country have changed. Not too long ago, India was regarded as the very epitome of what the term Third World meant – decrepit, destitute and pitiable.  Yet in a relatively short period of time, the popular view of India changed in critical ways. Nowadays, it is broadly viewed as a fast-rising economic and technology powerhouse and home to a vast reservoir of highly-trained brainpower that will inevitably sap the U.S. edge in innovation. When President Obama points to Bangalore as a threat to America’s competitive advantage or invokes India as part of a new “Sputnik moment,” one quickly understands how far we have traveled from yesterday’s stereotypes.

Of course, a segment of U.S. opinion, attracted to Indian cultural traditions and the moral precepts of Mahatma Gandhi, has long held the country in high regard.  But for many decades most Americans were inclined to the views of Harry S. Truman, who dismissed India as “pretty jammed with poor people and cows wandering around streets, witch doctors and people sitting on hot coals and bathing in the Ganges.”  Truman’s Secretary of State, Dean Acheson, had an even more incisive perspective: “by and large [Indians] and their country give me the creeps.”

A decade after Indian independence, Harold Issacs’s classic 1958 survey of U.S. elite opinion, Scratches on Our Minds, revealed that influential Americans held very negative perceptions of the country, associating it with “filth, dirt and disease” along with debased religious beliefs. A State Department analysis prepared in the early 1970s found that U.S. public opinion identified India more than any other nation with such attributes as disease, death and illiteracy, and school textbooks throughout this period regularly portrayed it in a most negative light. This view was again underscored in a 1983 opinion poll, in which Americans ranked India at the bottom of a list of 22 countries on the basis of perceived importance to U.S. vital interests. A generation after Harold Issacs, the 1984 adventure film Indiana Jones and the Temple of Doom depicted India along essentially the same lines – as a country was filled with hapless, impoverished villagers and benighted religious practices.

Official attitudes in Washington tended to parallel public opinion. U.S. policymakers during the Cold War paid only episodic attention to New Delhi and when they did it was largely a function of the superpower rivalry with the Soviet Union rather a desire to meaningfully engage Indian leaders. The Kennedy administration placed considerable if anomalous emphasis on India, making a massive commitment of economic assistance. But by the end of the Johnson administration, leading Democrats grew fatigued with the country’s seemingly insuperable problems. As Dennis Kux notes in Estranged Democracies, his history of the bilateral relationship, by the late 1960s “India, in Washington’s eyes, had become just a big country full of poor people.” The Nixon administration similarly believed that India was not worthy of heavy engagement. President Nixon himself held denigrating views of Indians, seeing them as supine and indecisive, and regarded Prime Minister Indira Gandhi in an even worse light. When Daniel Patrick Moynihan was U.S. ambassador to India from 1973-75, he regularly lamented that Washington was utterly indifferent to the country’s fate; writing in his diary, he confided that it “is American practice to pay but little attention to India.”  In a cable to the State Department, he complained of dismissive attitudes, “a kind of John Birch Society contempt for the views of raggedly ass people in pajamas on the other side of the world.”

So, what accounts for the significant shift in cultural perceptions that is increasingly registered in government statements – such as, President Obama’s calling India an “emerged” country and an “indispensable partner” – and in high-profile cultural events like the Kennedy Center’s?  An obvious part of the answer lies in the dramatic turnabout in Indian prospects launched by the 1991 economic reforms. Long gone are the days when India was seen as an economic laggard or a marginal factor in global commerce. In a remarkable sign of changing fortunes, the New York Times “Room for Debate” blog in late 2010 convened seven experts for a discussion on which lessons in economic competitiveness the United States could learn from India.  Along similar lines, Fareed Zakaria in Time magazine contrasted a dejected America with an India filled with people “brimming with hope and faith in the future,” while Thomas L. Friedman in the New York Times proclaimed that “It’s Morning in India.” And a new Citibank report concludes that India will likely be the world’s largest economic power by 2050.

But a less obvious, though equally important, factor is also at work: The increasing stature of Indians in American society has changed how all Americans think about India. Large-scale Indian migration to the United States did not begin until the late 1960s and though the community remains relatively small – less than one percent of the overall U.S. population – it is one of the country’s fastest-growing ethnic groups. But the community’s growing success has given it an influence and impact wholly disproportionate to its size. As one analyst puts it, “Indians in America are emerging as the new Jews: disproportionately well-educated, well paid, and increasingly well connected politically.”

According to a recent report by the RAND Corporation, Indian-American entrepreneurs have business income that is substantially higher than the national average and higher than any other immigrant group.  High-skill immigrants from India are a significant driving force in U.S. prosperity and innovation, most famously in the information technology industry.  As Vivek Wadhwa and his colleagues document, Indians stand out among immigrant entrepreneurs, having founded from 1995-2005 more U.S.-based engineering and technology companies in the past decade or so than immigrants from the United Kingdom, China, Taiwan and Japan combined.  According to industry estimates, Indians are involved in 40 percent of all start-up ventures in Silicon Valley.  India-born scientific and engineering talent is also an important pillar of the faculties in America’s top universities.

The rising profile of the Indian diaspora has helped change public opinion in relatively short order.  For example, in contrast to the traditional sentiment of disdain or pity, a February 2010 Gallup survey found that two-thirds of Americans now have a positive impression of India, a favorability level equal to that of Israel.  In my next post, I will explore further how this societal factor has contributed to the new era in U.S.-India relations and how policymakers in Washington and New Delhi can capitalize on it.

India-US Relations Blog

Gary Locke’s Missed Opportunity

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U.S. Commerce Secretary Gary Locke traveled to India earlier this month for a six-day tour focused on enhancing bilateral high-tech trade and cooperation. The first U.S. Cabinet officer to come to India since President Obama’s state visit last November, he brought with him representatives from 24 U.S. companies, including Boeing, Lockheed Martin and Westinghouse.  The trip resulted in an agreement on closer collaboration in the area of energy technology as well as an announcement about the further easing of U.S. export controls on India. As one senior U.S. official accompanying Locke stated: “We have agreed to an unprecedented level of technology transfers to India and we can go even further.” Judged by the usual standards of such trade missions, the visit was not unproductive. Yet by the time Locke’s sojourn ended, one had the feeling that he nonetheless missed a good opportunity to significantly advance the bilateral economic agenda.

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Just how large a miss this was became clear a few days later, when Indian and Japanese Cabinet officials gathered in Tokyo to sign a comprehensive economic partnership agreement (CEPA). This accord provides a stark counterpoise to Locke’s visit, exemplifying the imaginative initiatives that should have been on his brief. The Indian-Japanese pact not only eases the movement of goods but also the flow of services, capital and labor.  It promises to increase the value of bilateral trade 150 percent over the next few years and has been received with great enthusiasm by the Indian business community. Indeed, the agreement is an apt economic expression of the growing partnership that the two countries are forging in the geopolitical realm.

Indian trade diplomacy is on a tear. Just days after the deal with Tokyo, New Delhi signed a similar arrangement with Kuala Lumpur, which will further deepen India’s involvement in Southeast Asia’s dynamic economy. And Commerce Minister Anand Sharma has raised expectations that trade negotiations with the 27-nation European Union will soon be concluded.  India has also concluded free trade accords with South Korea, Thailand and the ten-country Association of Southeast Asian Nations (ASEAN) in recent years, and has launched bilateral trade negotiations with China and Canada.

Suggestions have been floated about crafting a U.S.-India free trade agreement (FTA), an idea that would certainly result in significant economic gains for both countries. Despite dramatic increases over the past decade, the bilateral economic relationship is far from achieving critical mass and will require purposeful nurturing to reach its full potential.  Trade and investments flows between the two countries remain a small fraction of the U.S.-China level, and China recently eclipsed the United States as India’s top trading partner. Indeed, it is a telling indicator that President Obama’s visit to India netted trade deals worth some $10 billion, while Chinese Prime Minister Wen Jiabao’s trip just a month later resulted in $16 billion in business deals – this despite the increased diplomatic tensions that color India-China relations. Moreover, the two countries used the Wen visit to announce an ambitious effort to nearly double their trade in the next five years to $100 billion annually. For all of the spectacular improvement in U.S-India ties, India is still only the 14th largest trading partner for the United States and India remains a comparatively minor destination for U.S. investment flows.

So a far-reaching multi-dimensional U.S.-India FTA deserves an important spot on the bilateral agenda, though one must also admit the difficulties in forging one. Given that Washington and New Delhi are at loggerheads in the Doha Round negotiations, as well as the unpromising political climate in the United States regarding trade policy, the prospects for a broad-based bilateral FTA are not strong in the foreseeable future.  Moreover, the agricultural access issues that will need to be included are highly problematic for both sides. Consider, for example, that India’s negotiations with the European Union have lasted nearly four years and since the EU is not a large exporter of farm products, agricultural issues have not been the major obstacle in the EU-India FTA talks that they would be in an U.S.-India negotiation. At best, Washington and New Delhi should announce a commitment to signing such an accord by 2015, even if it is one whose provisions take effect over an extended period. An excellent opportunity to make such an announcement is in early April, when the next round of the U.S.-India Strategic Dialogue convenes in New Delhi.

But even as Washington and New Delhi hash out the terms of a broad-based FTA, trade officials should focus the bulk of their energies on an accord that promises a large payoff in the immediate term. A sweeping initiative aimed at capitalizing on mutual synergies in the area of high-technology trade would do just that.

The high-tech sector plays a critical – and largely complementary – role in the economies of both nations, and the United States has been a prominent factor in the spectacular development of the Indian IT sector. Yet overall bilateral trade in advanced technology products is surprisingly low and important synergies remain untapped. And unlike a more comprehensive FTA – entailing prolonged negotiations, unwieldy bargaining tradeoffs and protracted coalition-building at home – an arrangement with a limited but sharp focus on the innovation economy could likely be formulated relatively quickly, and its self-evident “win-win” features would override bureaucratic timidity and domestic opposition.

A model for such an initiative exists in the 1997 Information Technology Agreement (ITA), which eliminated tariffs on a range of capital goods, intermediate inputs and final products in the information and communications technology sector. The agreement was negotiated by 29 original countries (then representing about 80 percent of the global IT trade). Although conducted under the auspices of the World Trade Organization, the agreement was formulated quickly outside of its normal (and cumbersome) negotiating process. The final agreement was quickly joined by other countries (including India) and currently has over 70 participants (collectively representing 97 percent of the global IT trade). The ITA is credited with spurring world trade in IT products, currently estimated at $4 trillion annually, and remains the only industry-specific comprehensive free trade agreement ever signed.

While the ITA is still in effect, its value has been significantly diluted by a series of technological developments in the period since its creation. Specifically, disputes have arisen among the signatories over how to apply the agreement to hundreds of new IT products that were not foreseen a decade ago and on addressing the issue of non-tariff barriers. Moreover, multi-party negotiations to update the ITA have been stalled for years.

In light of these problems, the United States and India should launch a bilateral effort to further liberalize trade and deepen engagement in the IT field or, even more one that covers the entire range of advanced technology products and services.  This agreement could then be opened to the participation of other like-minded countries.  Given the vital role of the high-tech sector in the American and Indian economies, not to mention the broader world economy, such an initiative would pay robust commercial dividends.  Additionally, with Washington and New Delhi at odds in the Doha Round talks, this initiative would have great political value, further solidifying the U.S.-India partnership and providing an important example of joint leadership in the global economy between developed and emerging nations.  Finally, it would be a good down payment on the Obama administration’s pledge to double U.S. exports over the next five years, as well as India’s effort to double its own trade levels.

An effort focused on crafting a bilateral free trade mechanism relevant to the advanced technology sectors would instill a level of momentum in bilateral ties that has been noticeably missing since George W. Bush left the White House. The Obama state visit succeeded in righting a relationship that had been adrift for the better part of two years.  But with the civilian nuclear accord now a done deal, officials in both governments are still searching for a bold, creative initiative capable of driving relations forward.  An exchange that occurred at the start of the Obama administration is instructive. In January 2009, Richard Boucher, then U.S. Assistant Secretary of State for South Asia, suggested to Shivshankar Menon, then India’s Foreign Secretary and now Prime Minister Singh’s National Security Advisor, that both capitals needed to find “the next big idea” to animate bilateral affairs. Menon concurred, noting that in the absence of something that captures the imagination “Indians were beginning to view the relationship with the U.S. as only about political-military and nuclear issues.”

Focusing on the high-tech agenda would be a very good way to stir imaginations in both countries. It would underscore the critical role that economic engagement has played in launching the new era in U.S.-India affairs.  Indeed, increased private-sector ties will be one key in securing the growth of broad-based, resilient relations over the long term, since they work to limit the risk that momentary political and diplomatic frictions could escalate and disrupt the overall bilateral partnership.

Immigration Blog

Notes on the Great Indian Exodus

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The Indian-American Diaspora in the United States has historically evoked mixed feelings in India, running the gamut from envy, to resentment to admiration.  Now, apparently, it is the Diaspora that feels a mixture of envy resentment and admiration every time they come home to a rapidly changing India.  Even as one ponders over this improbable turn of the dice, news items such as this about the rising tide of illegal migration from India into the United States make one wonder whether moffusil India is yet to get the memo…that the green pastures of the West are gradually turning brown. Or, are people willing to sell all their worldly belongings and put life and limb at risk in their efforts to get out because the green pastures back home are still so illusory, and seemingly ephemeral?

Reading these news reports, it’s almost as if people from different states have devised different routes to migration. The above report mentions that most of the migrants are Sikhs, who, once caught, ask for political asylum citing religious persecution back in India. Of course, the very nature of illegal immigration is such that there is no way to verify these claims and they might well be from any country in the South Asian region. This would also explain why India was cited as one of eight countries that had refused to take back illegal immigrants in a Congressional Bill that sought to sanction such countries. Statistics from the DoJ’s Executive Office for Immigration Review show that, from 2006 to 2009,on an average, a thousand Indians have applied for asylum every year. Whilst 450 were granted asylum in 2006,the authorities seemed to have wised up since then, with the number of approvals seeing a precipitous decline.

The other case that hit the headlines was that of the Tri-valley University scam. From all accounts, there were students who enrolled in good faith as well as those who were willingly party to the scam. With 20,000 H1-B visas reserved for those who have a masters or a higher degree from American institutions, one may well see an increase in scams such as this.

For the Indian government, handling student issues is a headache, especially since the missions are under staffed and barely able to cope with normal consular duties. This is even as the media turns the continuing saga into a pot boiler. There is the cruel step-mother in the form of the U.S. government, the over-protective father personified in the Indian government, and then there are the hapless students and their guardians, shouting from the rooftops about their mistreatment by the stepmother and abandonment by the father despite protestations to the contrary.  Even though the media frenzy has resulted in some positive developments, this promises to be a long drawn out affair as the various cases wind their way through the judicial process. One wonders if there is any coordination between the nodal Ministries of External Affairs, Overseas Indian Affairs, and Human Resource Development. In the case of the students returning from Australia after the student related troubles there last year, the Human Resource Development Ministry has now been tasked with recovering the balance of the fees due to the students who have cut short their education in Australia after the change in the Australian government policies.

It goes without saying that the great Indian exodus continues largely because of the abysmal failure of successive governments to provide adequate education and generate employment opportunities to the youth. Since that state of affairs is unlikely to change any time soon, the only advice one can give the government is to create posts in its missions abroad specifically to deal with Indian student affairs!

Endpiece: All this is even as there is by all accounts, a reverse migration of professionals taking place from the United States to India, with some predicting as many as 100,000 returning over the next ten years.  Whilst this can’t be confirmed independently,t he U.S. Census Bureau does show a decline in both permanent residency and citizenship figures from India.

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