US bill to help 9/11 victims at our cost, says India

The Indian government has slammed a US move to impose a new tax that seeks to help victims of the 11 September terrorist attacks in New York, as the proposal will raise the costs for technology companies in the United States.

The US Congress and the Senate on Wednesday passed the legislation that will raise $4.2-billion to help the victims of 11 September terrorist attacks by levying a new 2- per cent excise tax on goods and services purchased from foreign suppliers based in countries such as India and China.

To be effective from July next year, the legislation in effect seeks to make Indian firms such as Infosys, TCS and Wipro pay for the victims of 11 September attacks. India has protested the bill, calling it a 'retrograde step' in Indo-US trade relations.

In a letter to the US trade representative Ron Kirk, commerce and industry minister Anand Sharma said the proposals went against the decision taken by both countries recently to reduce trade barriers. "The passing of such a legislation would, to my mind, be a retrograde step for greater trade engagement between India and US," Sharma wrote.

He asked Kirk to ''take personal interest and intervene urgently''. The act will be another blow to the Indian IT companies as they would have to bear the costlier H1-B and L-1 visas for five years from four years earlier. After protests by India, the proposed period of applicability of the higher visas fees was reduced from 2021 till 2015.

"The Christmas miracle we've been looking for has arrived," US senators Charles Schumer and Kirsten Gillibrand, who supported the bill, said in a joint statement. The bill was voted 206 to 60 in favour on Wednesday. It is expected to be signed by president Barack Obama this week.