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Scroll.in
2 hours ago
- Business
- Scroll.in
Why the Indian government has struggled to protect skilled overseas labourers in the Gulf
Most Indians migrate with dreams of a better future, wrote Irudaya Rajan, a highly regarded and longstanding researcher on labour migration. 'But far too often, they are seen only in a reductive manner, as people sending remittances to the home country.' Over the past three decades, ever since the World Trade Organization came into being and India began to focus on services trade, official policy on out-migration of labour has been shaped by the desire to earn foreign exchange and to find an employment outlet that eases the burden of population at home. Based in Kerala, home to millions of labour migrants to the Gulf, Irudaya Rajan has long complained both about the inadequate database on labour migration and the absence of adequate infrastructure to support migrant workers, despite their growing importance both to the Indian economy and the economies of the Gulf. West Asia has had an intimate economic and social link with the Indian subcontinent for centuries, especially with regions along the Indian west coast from Gujarat down to Kerala. Arab traders were regular visitors all along the western coastline and Gujarati and Malayalee merchants had extensive links into the Arab world. Following the 'oil shocks' of the 1970s, when crude oil prices shot up, an economic boom in the region ensued. The construction and consumption boom that followed created a huge demand for labour in the construction and services sectors. Muslims from the Malabar region of Kerala were the first to seize the opportunity, given their historic links with the Arab world, but thousands of semi-skilled and skilled workers went across the Arabian Sea from the 1970s onwards. My batchmate in the MPhil course (1976–78) at the Centre for Development Studies (CDS), Trivandrum, Raju Kurian, was among the first to study, as part of his MPhil dissertation, the emerging trend of rising migration from Kerala to the Gulf. The CDS has since become an important repository of research on Indian labour migration to the Gulf. Beginning with a few thousand labour migrants per year in the 1970s, the numbers rose sharply in the 1980s and 1990s to touch 3 million in 2000. By 2023, it was estimated that close to 9 million Indians were residents in the Gulf Cooperation Council (GCC) countries. This sustained and high level of labour migration from India to the Gulf was not regulated under any bilateral or multilateral framework. The Government of India enacted the Emigration Act 1983 to ensure oversight on the recruitment and passage of labour going overseas. Over time, some bilateral treaties have been signed, yet issues like conditions and terms of work, security of tenure, health and social security and related issues remain problem areas. Despite all this, and considerable publicity in the media on the travails of Gulf workers, hundreds of thousands continue to go there in search of jobs, given the relatively better incomes earned. Remittances home by migrants in the region have risen sharply with total inward remittances, including from workers in other countries, adding up to well over $100 billion. Researchers and activists have pointed to the need for changes to the 1983 Emigration Act aimed at enabling the government to better protect the rights of emigrant workers, especially in the non-democratic countries of the Gulf, where human rights protection is lacking. The Government of India's eMigrate Project is an online system that links the Protector General of Emigrants and Protector of Emigrants to Indian diplomatic missions and the relevant offices of the Ministry of External Affairs. It allows recruiting and insurance agencies, overseas employers, project-based labour exporters and workers opting to migrate to link into a single information network. All foreign employers are required to register with the eMigrate system and secure permission to recruit, declaring the terms and conditions of employment. As Rupa Chanda and Pralok Gupta note, the importance that successive Indian governments have been attaching to this labour outsourcing is testified to by the fact that the government has several offices in place to protect the interests of overseas workers. These include the Pravasi Kaushal Vikas Yojana, Overseas Workers Resources Centre, Migration Research Centre and the Pre-departure Orientation and Training programme. Despite such efforts, migrant labour, especially those located in the Gulf countries, continues to face various problems ranging from being cheated by recruiting agents, being denied full payment of dues, and inadequate housing and provision for medical emergencies and assistance. The Government of India has from time to time used the bilateral route to extend some degree of protection to migrant labour. While local politicians in states like Kerala are focused on the rights of migrant labour, little attention is paid by the national leadership unless there is some crisis or tragedy, as occurs from time to time in the Gulf countries. In a study of India's diaspora diplomacy in the Gulf, Levaillant observes how important diaspora labour welfare management had become for Indian diplomats and to Indian diplomacy in the region. Yet, the lack of adequate funding has impeded diplomatic effort, argues Levaillant. 'Added to this resource issue is the important fact that India's diplomacy in the Gulf rests on a paradox: although diplomats have made increasing efforts to promote Indian migrants' rights, their political priority is directed towards maintaining emigration flows.' Given the importance attached by the government both to sustaining dollar remittance in flows and securing employment opportunities for Indians in the region, officials and diplomats are unwilling to overstep their brief in defending the interests of labour. India presently has bilateral treaties with most GCC countries that ensure that immigrant labour is covered by the same labour laws that apply to local labour, but such protection is not always forthcoming and weakly enforced. They also specify conditions regarding qualifications, benefits, facilities and entitlements of workers, protection of repatriation of income and so on. These treaties provide for joint working groups that ensure their implementation and have become necessary in the absence of any regional or multilateral treaty extending such protection. Apart from Saudi Arabia, none of the other GCC member-countries has as yet agreed to sign up to the Mode 4 component of the General Agreement on Trade in Services (GATS). It is neither a bilateral agreement nor a multilateral treaty but the simple dynamics of Gulf sociology and demography that have created the demand for Indian labour. In many GCC countries, few among the local population are either trained to or willing to perform the tasks that South Asian labour has been willing to and capable of performing. Resource- and cash-rich GCC countries import labour from most South Asian countries as well as some South-east Asian ones to meet the demand generated by their wealth and prosperity. While Indian analysts and policymakers worry about the danger of this demand petering out over time, and its consequences for the home country that has been benefiting from inward remittances, the Gulf continues to attract immigrants from India. Not just workers and maids, nor drivers and office assistants, but the Indian wealthy, the so-called HNIs. Even as the Gulf demand for labour tapers off, new opportunities are opening up in a world where, for one reason or another, there are episodic labour shortages and India is a willing exporter of labour. As mentioned previously, countries as diverse as Israel and Taiwan have opened up to Indian labour. More recently, so have Greece and Italy. A premier business newspaper reported, after focusing on migration and mobility pacts, that the government is now exploring agreements with developed economies to send skilled workers in the construction, farm and manufacturing sectors, stating, 'These pacts would be along the lines of the deal signed with Israel earlier this year. Greece has approached India for sending up to 10,000 seasonal agricultural workers, while Italy has sought workers to staff municipal bodies in its emptying towns, people in the know said.' Apart from such legal migration, illegal migration is also on the rise. We mentioned the rising numbers of Indians, including from the developed state of Gujarat, entering the US illegally through the Mexican and Canadian borders. Many of the industrial economies of Europe are facing a shortage of manpower and are willing to liberalise their immigration policy to attract labour from developing countries. This source of demand is being driven by global demographics, with declining population growth in developed countries and India is emerging as home to the world's biggest and youngest population. Rising unemployment over the past decade has forced many young Indians to seek even high-risk jobs in countries at war.
The Hill
17 hours ago
- Business
- The Hill
The grievance that could be the undoing of Trump's Brazil trade probe
On July 15, the Trump administration opened a Section 301 investigation into Brazil's trade practices. The probe targets Brazil's 'acts, policies and practices' across six wide-ranging areas: digital trade, preferential tariffs, anti-corruption, intellectual property protection, ethanol market access and illegal deforestation. Some of these grievances are longstanding, like the one about ethanol. Deforestation is of more recent vintage. Bundling all six into a big sprawling case will make it harder to negotiate targeted solutions. But the one about Brazil granting Mexico and India preferential tariff treatment could end talks before they even begin. Before turning to why, consider what's at stake in this investigation. U.S. digital service providers face a wide variety of subtle and not-so-subtle barriers to doing business in Brazil. They need fair market access. U.S. ethanol exporters also need relief from Brazil's on-again, off-again tariffs. They've been put through the wringer. Then there's America's innovators, who have waited patiently for this probe for decades. The U.S. Trade Representative has long raised concerns about Brazil's failure to adequately protect and enforce intellectual property. Since 1999, every single U.S Trade Representative Special 301 Report has called out Brazil for excessive patent pendency. The average delay is nearly seven years; for pharmaceuticals, it's almost a full decade. This keeps cutting-edge treatments developed by U.S. firms on the outside looking in on Brazil, waiting for proper intellectual property protection. Also, Brazil's lack of regulatory data protection for confidential pharmaceutical test data is a violation of the country's international commitments, and discriminatory. Indeed, Brazil provides regulatory test data protection for veterinary, fertilizer and agrochemical products. Other concerns about Brazil's intellectual property regime persist as well, including inconsistent copyright enforcement, the widespread availability of pirated and sale of counterfeit goods and opaque procedures related to the recognition of geographical indications, for example. These issues alone warrant a Section 301 investigation. But they, like digital trade and ethanol concerns, risk being overshadowed by the ill-defined complaint about Brazil's 'partial scope' agreements. Here's the issue. Brazil, alone and as a member of the Mercosur trade bloc (which includes Argentina, Paraguay and Uruguay), has several partial scope agreements, including one with Mexico and another with India. Congress doesn't like these deals because they fall short of the World Trade Organization's requirement that bona fide free trade agreements are supposed to cover 'substantially all trade.' Both Brazil-Mexico and Mercosur-India want to get there. As Brazil explained to the U.S. and others in attendance at a World Trade Organization 'transparency exercise,' the plan for its pact with Mexico is that it will include 'commitments in all areas that made a modern trade agreement.' Likewise, Article 2 of Mercosur-India sets out that the parties are committed to evolving the pact into a fully-fledged free trade area. It's important to note that neither Brazil-Mexico nor Mercosur-India was mentioned in the 2025 National Trade Estimate Report. In fact, the U.S. Trade Representative didn't raise any questions about either deal in Brazil's 2022 World Trade Organization Trade Policy Review. So, what exactly is this grievance? Is it that these transitions aren't credible? Or that they're not sufficiently ambitious? If it's about the timelines, this will hurt U.S. trade relations with developing countries more generally. There are 27 partial scope agreements in today's global economy. Demanding that they turn into free trade deals on Washington's clock, backed by threats of punitive tariffs, would drive poor nations further into China's arms. Indeed, Beijing is giving them zero tariffs whereas Congress can't seem to renew the Generalized System of Preferences. If it's about 'substantially all trade,' the U.S. will have an even bigger fight on its hands. The WTO doesn't define what this means. The closest it comes is to say it's 'not the same as all trade' but 'considerably more than merely some of the trade.' The Trump administration can ask tough questions, but to dictate benchmarks and back them up with enforcement actions would pit America against many — if not all — of its trade partners. Finally, regardless of which way this grievance goes, Brazil can't address it on its own. Mexico, India and Mercosur have skin in the game. This will further distract Brazil from the other five issues. Trump's Section 301 investigation of Brazil is big, brash, and too clever by half. U.S. exporters need a more focused, clearly defined action if they're to benefit. No one has more on the line than America's innovators. Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University.
South China Morning Post
a day ago
- Politics
- South China Morning Post
People's Republic of China ‘never ruled Taiwan'? Put that fallacy to rest
Last month, Taiwanese leader William Lai Ching-te embarked on the first of his '10 lectures on unity' , claiming Taiwan had never been a part of the People's Republic of China – and that the People's Republic of China government 'never ruled Taiwan'. This plainly disregards the facts and is self-deceiving rhetoric. Advertisement Since 1949 – and especially since 1971 – the Chinese government has exercised sovereign power over Taiwan politically and militarily, directly and indirectly, affirmatively and negatively. As the sole legitimate Chinese government widely recognised by the international community, Beijing is consulted and its opinions are respected by the United Nations and all countries concerned when it comes to affairs involving Taiwan. For a start, Taiwan's authorities are denied sovereign participation in the United Nations and other international organisations. Their participation in organisations such as the World Trade Organization, International Olympic Committee, Asia-Pacific Economic Cooperation forum and Asian Development Bank is permitted only with China's consent and under appropriate formal designations, such as 'Chinese Taipei' and the 'separate customs territory of Taiwan, Penghu, Kinmen and Matsu'. And its scope of participation is limited to non-political fields such as societal, economic and cultural. This is a direct manifestation of China's representative power over Taiwan and the one-China principle. Second, China does not allow any country it has diplomatic relations with to develop official ties with Taiwan's authorities. For these 183 countries , any dealings with Taiwan can only be of an unofficial, regional and civilian nature, in accordance with Beijing's stance. Any act of interference with Taiwan, for instance by selling it weapons or forming any kind of military alliance with it, is firmly opposed Advertisement Third, the Chinese government safeguards the safety, legitimate rights and interests of Taiwanese abroad. Notably, Chinese diplomatic missions provide equal protection to both mainlanders and Taiwanese.
The Guardian
a day ago
- Business
- The Guardian
US and China poised to extend tariff truce after failing to find resolution at talks
US and Chinese negotiators have agreed in principle to push back the deadline for escalating tariffs, although America's representatives said any extension would need Donald Trump's approval. Officials from both sides said after two days of talks in Stockholm that while had failed to find a resolution across the many areas of dispute they had agreed to extend a pause due to run out on 12 August. Beijing's top trade negotiator, Li Chenggang, said the extension of a truce struck in mid-May would allow for further talks, without specifying when and for how long the latest pause would run. However, the US trade representative Jamieson Greer stressed that President Trump would have the 'final call' on any extension. The US Treasury secretary, Scott Bessent, joined the talks in the Swedish capital to give weight to the US negotiating team, but appeared to be unable to break the deadlock. Bessent said he had told Chinese officials that, given US secondary tariff legislation on sanctioned Russian oil, China could face high tariffs if Beijing continued with its Russian oil purchases. China has taken an aggressive stance in response to Trump's threatened border taxes, retaliating with tariffs of its own on US goods and blocking the sale of vital rare earth metals and components used by American defence and hi-tech manufacturers. Trump is on course to impose extra tariffs on Mexico and Canada from Friday, barring last-minute deals. Vietnam, Cambodia and several other south-east Asian countries are also lobbying for extensions to talks to head off a rise in US tariffs. Negotiations between White House representatives and trading partners threatened with high tariffs have often proved to be drawn out. The EU's trade commissioner, Maroš Šefčovič, spent more than 100 hours negotiating before the US agreed to reduce a planned 30% tariff to 15% on EU exports to the US in a deal announced on Sunday. Pascal Lamy, a former director general of the World Trade Organization, said many of the trade agreements announced by the White House were light on detail and needed further negotiation, leading to further uncertainty. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion He said the deal struck between the US and EU was 'not half-baked, but maybe just two-thirds baked, leaving much more to be discussed and agreed'. Underlining the stakes, the International Monetary Fund on Tuesday upgraded its global growth forecast to 3% from an estimate in April of 2.8% after the scaling back of the worst Trump trade threats, but flagged a potential rebound in tariff rates as a major risk.
The Hill
2 days ago
- Business
- The Hill
Trump should keep the ‘zero-to-zero' tariff policy on pharmaceuticals
President Trump has reached a trade agreement with the European Union, imposing a 15 percent tariff on most items. However, the president said that pharmaceuticals are excluded from the agreement, pending an ongoing U.S. investigation. EU officials hope that when the dust settles, pharmaceutical tariffs won't be higher than 15 percent, which they see as a win, since that's less than Trump's threat to impose tariffs of up to 200 percent on prescription drugs and their active ingredients manufactured outside the U.S. Trump is keeping up the tariff pressure on drugs reportedly to encourage onshoring and bring more U.S. pharmaceutical manufacturing jobs to the U.S. But given that Trump has complained about high drug costs, imposing outrageously high tariffs on pharmaceuticals would be a terrible, not to mention costly, idea. In 1994, as part of World Trade Organization negotiations, several major trading partners agreed to exempt most pharmaceuticals from tariffs, known as a ' zero-to-zero initiative.' The thought was that pharmaceuticals are just too important to human health and well-being to become part of a very politicized tariff process. They still are, but Trump looks to upend that agreement. What is clear is that imposing tariffs on pharmaceuticals is not a way to hammer China. According to a drug supply-chain analysis by U.S. Pharmacopeia, only 3 percent of the active pharmaceutical ingredients in brand-name drugs are made in China and only 2 percent in India. It's 8 percent and 35 percent, respectively, for generics. Europe is the big winner, manufacturing 43 percent of brand-name active pharmaceutical ingredients, while 15 percent are manufactured in the U.S. Indeed, Ireland has become a drug-manufacturing powerhouse, in part because of its low corporate tax rate and welcoming business environment — policies Trump understands. With respect to Trump's concern about jobs, the U.S. Bureau of Labor Statistics says that 'pharmaceutical and medicine manufacturing' provided more than 340,000 jobs in 2023, with an average annual wage of $87,170. That's a solid showing. Yes, manufacturing jobs could be shifted to the U.S., but not for several years, since building drug-manufacturing facilities is a very complex and costly process. And manufacturers are increasingly turning to automation to get the job done. And there are other considerations. Pharmaceuticals are distributed worldwide, and countries that buy a lot of them, like those in the European Union, understandably want some domestic manufacturing — just as Americans like to see foreign-branded cars made in U.S. factories. The good news is that reduced regulations and the corporate tax benefits in Trump's One Big Beautiful Bill Act provide a strong economic incentive for drug companies to base more of their manufacturing in the U.S. It may take time, but his limited-regulation approach is attractive, and his low-tax policies are permanent, creating economic stability — unlike the on-again, off-again tariffs, which could be easily eliminated by the next president. A better way to attract more pharmaceutical manufacturing would be to reinstitute the manufacturing tax breaks that U.S. territories like Puerto Rico once enjoyed. The island once had a thriving pharmaceutical manufacturing industry until Congress began phasing out the tax breaks — known as Section 936 — in 1996. The island has never recovered economically. With respect to Trump's concern about national security, Europe is one of the U.S.'s strongest allies. There is very little reason to think Europe's production of APIs or finished drugs poses any threat to the United States. Another of Trump's stated concerns about the pharmaceutical industry is high drug prices. And it's true that some of the newest drugs, and especially biologics that treat some of the rarest and most debilitating diseases, can be very expensive. But imposing tariffs would make drugs manufactured in other countries even more expensive. Many of the most innovative drugs, for diseases like cancer, are made by very small niche biopharmaceutical companies that are surviving on investors' money and don't have other sources of revenue that might help them eat some of the tariffs. They will have to pass on any increased costs. Pushing drug companies to reshore their manufacturing may also encourage some countries to implement compulsory licensing, which permits a government to allow a different manufacturer to produce a patented drug without the patent-holder's permission. It's bad politics for a country to allow compulsory licensing when a drug company is providing jobs. If the company relocates, that restraining factor is gone. Tariffs on pharmaceuticals is one of the worst possible ideas. Trump has taken positive steps through tax and regulation policy to encourage drug manufacturers, as well as other industries, to reshore, and more could be done. Breaking the zero-to-zero initiative would be counterproductive.
