Wednesday February 20, 2019
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Indo-US bilateral relations: Future of 300,000 Indians at stake

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By NewsGram Staff Writer

One of the few, and serious economic grievances that New Delhi has raised with Washington is the lack of a totalisation agreement on the social security and Medicare taxes contributed by Indian workers to the American coffers.

30-1422584463-india-us-flagsIndia has now decided to up the ante on the issue by pressing the US government to sign the agreement. More than 505 signatures have already been signed on an online petition addressed to the External affairs minister, Sushma Swaraj, asking her to strongly take up the issue with the US government.

Currently, non-immigrants and other 300,00 Indians on H1-B visa have to shell out a tonne of money if they are in the US for less than 10 years or 40 quarters. A whopping sum of $25 billion has already been wiped out in the past years owing to the US law.

“Signing the treaty should be on top of the agenda in the US-India Strategic Partnership,” says the petition.

The urgency to take up the issue with US stems from the fact that for the past decade India has been demanding a totalisation agreement, but its call has fallen on deaf ears primarily because the US does not want to lose free money.

The moral argument that India has raised does not raise much hackles in the hard-nosed American politics. No war has ever been won purely on moral grounds. Even the apartheid cookie crumbled due to economic reasons when the South African government was squeezed through divestments via boycott of goods and civil right activism.

Another pressing concern which irked India during the mid-2000s was the exclusion from the club of nuclear countries. But the global scenario prevalent during the time forced George Bush to provide with nuclear superstructure in 2005, a realpolitik gambit aimed at recognising India as its strategic partner, not to mention countering fears of an emerging China.

Things, as they stand today, are different. America no longer has the same compulsions as before. Chinese economy is going through a slowdown and US remains the only bright spot in the world economy.

Therefore, India needs to go back to the drawing room and hatch another plan, a tighter case backed with hard legal arguments. A glimmer of hope had arisen when President Barack Obama in January agreed to pursue an India-US Totalisation agreement.

Still, prospects for signing the deal remain bleak. US has time and again cited technical issues and ‘incompatibility’ of the systems followed by the two countries as the reason for sticking persistently to its stance of non-commitment.

However, here is where the American argument becomes flawed. India has signed at least 9 agreements where the workers are allowed pay into his/her social security if they are employed for less than 5 years. (The Indo-Canada pact is a case in point)

Maybe America needs to come up with a flexible, custom-made treaty such as the one determining wages on the basis of a combination of duration of work and the origins of the employer.

But American commitment to etch a bilateral pact remains questionable.

Next Story

Does India’s Giant Step in the Direction of Green Energy Signal an End to Coal?

Coal consumption forecasts have already been downgraded significantly from 2013 projections, and major shifts in energy policy like Modi’s are likely to add significant weight to the idea that India might well become a much bigger player in renewable energy production in the next 20 to 30 years

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FILE - Smoke billows from chimneys of the cooling towers of a coal-fired power plant in Dadong, Shanxi province, China. VOA

When Prime Minister Narendra Modi’s government announced its target to increase India’s renewable energy capacity to an equivalent of 40% of the nation’s total green energy output, it raised eyebrows. Could this mean an end to India’s coking coal industry?

Is there investment for green energy?

For any alternative to coal to be a serious consideration, there must be investment sources. Already India’s renewable target has attracted investors like Japan’s SoftBank, which agreed to a deal to sell power generated from a Northern Indian solar bank at 2.4 rupees per unit – below that of coal power, which currently costs over 3 rupees per unit.

Contrary to the enormous investment in the production of solar panels being manufactured by China, which has made them cheap enough to encourage this Indian growth in solar renewable energy, there has been relatively little investment in Indian coal.

Asia-Pacific
Workers operate machines at a coal mine at Palaran district in Samarinda, Indonesia (VOA)

For instance, state-run NTPC has cancelled several large coal mining projects, including a huge plant in Andhra Pradesh. Meanwhile, the private sector has continued investing in renewables. Adani Power has over $600 million invested in solar panels in the southern state of Tamil Nadu.

That Modi has made an investment of $42 billion in the renewable energy sector over the past four years and his renewables plan is likely to generate a further $80 billion in the green energy sector in the next four years is good news for the Rupee. External investment in India is likely a sign of increased currency transaction in forex trading signalling the Rupee gaining strength against other pairs. Like the Indian economy, millions of dollars are traded on currencies every day, and increased interest in the Rupee helps cement India’s economic and investment potential.

How reliant is India on coal power?

Not so long ago the Indian government had a target to connect 40 million households to the national grid by the end of 2018. It even tasked CIL, the state coal monopoly, to produce over a billion tonnes of coal per year by 2020, an increase of almost 100% from 2016. It’s an ambitious goal, notwithstanding the environmental impacts of mining for such an unprecedented amount of coal. This is the same coal that already generates 70% of India’s primary commercial energy requirement; compare that figure to the UK’s 11%, Germany’s 38%, and China’s 68%, while France has practically shut all of its coal power stations. This means that India’s shift from coal could have important implications for the global climate, and any investors looking towards coal would be making a very brave and risky decision.

Coal
Environmentally, coal isn’t a sustainable source of power, certainly not in current quotas.

The increasing problem with relying on coal

Environmentally, coal isn’t a sustainable source of power, certainly not in current quotas. Clean-up costs could make coal an out-of-date power source sooner rather than later. A report by Oxford University estimated that investors in coal power may lose upwards of half a trillion dollars because assets cannot be profitably run or retired early due to global temperature rises and agreed carbon emission reductions.

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Coal consumption forecasts have already been downgraded significantly from 2013 projections, and major shifts in energy policy like Modi’s are likely to add significant weight to the idea that India might well become a much bigger player in renewable energy production in the next 20 to 30 years – although it’s difficult not to see coal remaining an important power source considering India’s significantly large coal reserves still available in Eastern India.