Key Points

While speaking to IANS in Washington, Padilla said that “for India, visas for skilled workers have always been a priority issue.”

“I do expect the H-1B issue to have an impact on the trade negotiations. For India, visas for skilled workers have always been a priority issue, and it has been the subject of discussions between trade negotiators before. It adds another tricky and sensitive issue to the menu of bilateral problems at a sensitive time,” he added.

US President Donald Trump on Friday signed a proclamation to significantly curtail the H-1B visa program, announcing a $100,000 fee for each new application.

The proclamation caused immense confusion over the weekend as it seemed to suggest that it would impact the current H-1B visa holders, who may face hurdles in returning to the United States.

The White House issued a clarification to IANS on Saturday, saying that this is a “one-time fee” that applies only to new visas and not renewals or current visa holders.

“This is a one-time fee that applies only to the petition. It ONLY applies to new visas, not renewals or current visa holders. It will first apply in the next upcoming lottery cycle,” a White House official told IANS.

A White House Spokesperson also clarified to IANS that the policy would “discourage companies from spamming the system.”

“President Trump promised to put American workers first, and this common sense action does just that by discouraging companies from spamming the system and driving down wages. It also gives certainty to American businesses who actually want to bring high-skilled workers to our great country but have been trampled on by abuses of the system,” said Taylor Rogers, the White House Spokeswoman.

Padilla, a former senior official in the George W. Bush administration and now a Senior Advisor at the global advisory firm Brunswick, stressed that any trade agreement would require a compromise on agriculture, which has “always been one of the most difficult issues in US-India trade relations.”

“If there is going to be a trade agreement, there will have to be a compromise on agriculture. It’s possible India could agree to greater market access for US crops like corn, but this would mean backing off restrictions on genetically modified crops, as most US corn is GMO. That’s possible, but a heavy lift,” he noted.

Padilla added that India may offer “greater access” on less sensitive agriculture sectors like nuts, seed oils and speciality crops; however, the US side may also “need to moderate its demands on greater market access for dairy, given the sensitivities of this issue in India.”

He characterised the additional 25 per cent tariffs on India for buying Russian oil as “probably the most difficult issue” and said it’s possible that “a deal is reached on reciprocal tariffs” only.

“Because this is a separate tariff, it is possible that a deal is reached to reduce the 'reciprocal' tariffs while the 25 per cent levy over Russian energy purchases remains in place. This is probably the most difficult issue, because in India it is seen as a matter of sovereignty and an independent foreign policy,” Padilla emphasised.

On the future of negotiations, he said the only certainty with the Trump administration is “uncertainty.”

“The main lesson is that when dealing with the Trump administration on trade, the only certainty is uncertainty and unpredictability. If you had told me in January that by September we’d have 50 per cent tariffs on India while moving to negotiate a trade deal with China in a big summit meeting, I would have assumed you had the two countries mixed up in your sentence. But here we are,” he concluded.

- IANS