Last Updated on May 10, 2021 by Shaun Snapp
- At every turn, when US domestic workers have opposed the enormous flow of foreign workers into the US, they have been accused of racism.
- As soon as Amazon announced plans to expand into India, Indian merchants protested.
A shocking response met the announcement by Jeff Bezos regarding his expansion of Amazon into India. This video sums it up.
See our references for this article and other articles on Indian IT Discrimination at this link.
The protests include burning posters of Jeff Bezos and having him shown with devil horns on his head.
It included this tweet.
This tweet calls Jeff Bezos an economic terrorist.
The US Worker Response to H1-B Visas
Considering the enormous numbers of H1-B visas approved every year, which is entirely understated in the media, as we cover in the article How the H1-B Program Understates The True Number of Yearly H1-B Visas, there has never been a well-publicized protest against H1-B workers.
We did some searching on the Internet, and while there have been anti-H1-B protests, we could find no well-publicized demonstrations, and, before finding a few examples, we had never heard of an H1-B protest in the US.
The best known anti-H1-B “protest” that we can think of was the signs that were put up in BART stations in the Bay Area. Notice how muted they are. There is no significant “X” through an Indian face, certainly no one calling foreign workers “economic terrorists.”
Furthermore, the Indian government arm that enforces antitrust might be getting into the mix, as is explained in the following quotation.
India’s antitrust regulator recently opened an investigation into Amazon and Walmart-owned online retailer Flipkart over this exact issue. It said e-commerce titans like Amazon use their market dominance to price “below cost,” making it hard for other businesses to compete. – Business Insider
That is curious because India very rarely enforces antitrust on its internal companies. This interest in Amazon from what the BBC calls
“One of the most protectionist countries in the world.”
…seems like more protectionism but under the guise of antitrust.
Perhaps India should call its antitrust agency the “Foreign Anti Trust Department,” where Indian antitrust is almost entirely focused on outside companies operating India, which are directed by those business entities in India seeking protection.
And this is supported by the following quotation.
Mr Rossow says India’s strategy has always been “pro-investment and anti-trade”.
Flagship government policies such as Make in India have aggressively courted foreign direct investment while seeking to boost domestic manufacturing.
To achieve this, India has erected trade barriers against competitors. In the past, western multinationals were the target. – BBC
Hundreds of thousands of foreign workers are being brought into the US every year, displacing an equivalent number of US domestic workers and driving down wages.
And this program has been in effect since 1990.
Amazon has only announced, and expansion of its activity in the Indian market, and Indian merchants and associated entities have already staged hundreds of protests in India.
In the US, there are also pro-H1-B immigration rallies. Indians protest in the US for more preferential immigration treatment. Every one of the claims on these placards is false, but we will address each of those specific topics in separate articles.
The Double Standard
Imagine if US protests featured images of Indians with devil horns, and images of Indians on placards being burned, and Indians being called “economic terrorists.” Imagine what the response would be. Everyone knows what the answer would be — racism!
Disgusting white supremacist racists is what all of the protesters would be called. (The term racism has become so normalized that the term “white supremacy” is now applied. The declaration that whites accomplished A, B or C, is now labelled as “white supremacist” as it “devalues” other cultures.) However, Indians can do all of this to Jeff Bezos, and we could not find a single media story that called this racism (not that we are crying for Jeff Bezos, he is worth $100 B, we are only pointing out the double standard at play).
Are Indian Merchants Right?
Jeff Bezos is a monopolist, and Amazon’s entry into the Indian market would dislocate many merchants.
However, Amazon’s “skills” at e-commerce are beyond question, and it would also lead to far better efficiency and value for Indian consumers. Indian merchants are known as highly inefficient.
The following quotation is from an Indian living in India.
Traditional Indian businesses lived off state protectionism. Shielded from competition esp. from foreign firms. They are getting worked up now. This was very much expected. The ‘Bania’ held an entire country at ransom with their cheap wares and shoddy service. The Banias treat customers terribly.
I am glad Amazon and Walmart are in India setting new standards of service delivery hitherto unknown to most Indians. I will not only buy stuff that I don’t need, but also pay them 4x the monies. Happily. I do not expect Amazon to fight for low taxes in a foreign country. I will support Amazon till my last breadth.
Hmmmm…does this sound like a group of entities that are striving to meet the needs of its customers? This sounds like the type of reviews an entity receives that faces very little competition.
Unlike foreign visa workers, there is no fraud in what Amazon is offering (not all H1-B visas are fraudulent, but many are, and most are entirely in contrast to the original intent of the program which was designed for genuinely distinguished workers). Amazon has far more verifiable “skills” at retail than Indian IT workers have distinct or differentiated skills in IT. We illustrate this in the article How the Pay Level of H1-B Visa Workers Contradicts Industry’s High Skills Arguments, where we cover the fact that roughly 1/2 of H1-B visa workers fall into the Level 1 category by their employers. This means they require a high degree of supervision and are mostly just starting their careers.
While India expects what amounts to open borders for its workers to leave India for the US, India is a minimal trade partner with the US due to India’s high degree of protectionism. The US applies very little protectionism or tariffs or other controls to India’s massive outsourcing businesses. But when it comes to allowing outside competition in its market from foreign firms, all of a sudden, the topic pivots to the need to defend the local service providers.
The following anonymous quote from an Indian living in India brings up the question of hypocritical protectionism.
So on hand, this is protectionist appeasement, on the other hand, it is Govt bitching about loss of taxes because most e-commerce firms are posting in the red. Taxes that a Bania never paid.(emphasis added) This was true of taxi operators like Uber too. Old time Indian travel firms NEVER paid a dime of tax but new firms are expected to.
Walmart operates in India in a model called ‘Cash and Carry’. Which means they cannot directly sell to consumers through stores but they can sell only to local businesses. So no Walmart. Only Agarwal Marts.
I just do not understand how can these protectionist bastards engineer new rules every now and then to screw an entire industry that is growing at 25% YoY. First, they do not want ‘foreign’ players in organized retail. Second even after they fully complied to this restriction through joint ventures with local firms, the socialists have a problem. They do not want same sellers selling on multiple ‘platforms’!
Amazon India and Flipkart should NOT comply with bogus laws of India Inc. They should rather have the US President directly intervene and if needed stage a trade war on India citing bogus protectionist policies. Drag the Indian state to the International Court of Justice, UN, WTO, and all other available forums.
This brings up a good question as to why so much of India’s policy is around Exporting people over-improving to the Indian economy for Indian workers and Indian consumers.
Tax Evasion for Indian Firms is Ok, But Foreign Firms Must Pay Taxes
When researching the topic of Indian retailers repeatedly, the issue of tax evasion comes up. This was included in the previous quotation but is also found in the following quote related to whether Indian retailers pay taxes.
To put it in a nut-shell, they don’t.
Retail shop-keepers sell products and maintain accounts like a 5th grade student. They look only cost price and selling price.
Let’s say the shop keeper buys Chips @ Rs 15 and Coke @ Rs 60. And he sells at MRP. Which means he earns Rs 25 through this sale.
But the tax rules are different for each business. You are required to file returns if and only if your yearly revenue is greater than Rs. 10,00,000 (citation needed, but it is something like this, varies with state) . Hence they under report their revenues and don’t file or file at lesser value. Also, taxation varies across products: un-branded foods, groceries etc do not attract tax unless there’s a value add.
If we have to expect a perfect system, the system must enable business owners the basic infrastructure needed to conduct his business at a nominal cost. Since it is not provided, the find ways to evade tax. – Quora
Does the Indian government bring this up as an issue?
We could not find it.
However, the Indian government wants it to be made clear that foreign firms in retail are a problem because India will lose out on tax revenues. How can you lose out on something that you aren’t paid in the first place?
India Will Enforce Anti Trust Laws — on But Only on Foreign Companies
Foreign-owned online retailers would need to modify their supply chains and stop deep discounting. Those rules didn’t apply to Indian companies. (emphasis added)
He said the government welcomes U.S. firms, but that they “cannot be allowed to indulge in anticompetitive practices,” referring to Amazon and Walmart competing with India’s mom-and-pop shops. – WSJ
How about Indian firms — can they be allowed to indulge in anti-competitive practices, because India seems to have little interest in anti-competitive practices — until it comes to foreign firms. US politicians are similarly hypocritical when it comes to antitrust. The US is dominated by firms in nearly all of the major sectors of the economy (grocery, IT services, enterprise software, hotels, airlines, automobiles, aerospace, defence contractors, banking, insurance, health care, etc..).
Each one of these monopolistic entities states that they function in a 100% free market.
The US has some of the best and most useful antitrust legislation in the world on the books, and US FTC, the entity responsible for antitrust, serves as a giant rubber stamp for nearly any new merger request. The FTC seldom takes action to break up existing entities with monopoly power. One of the biggest mysteries is what do employees of the FTC do daily. Do they have fuzzball tables? YouTube? Because whatever is happening in FTC offices can’t be considered work. Like many US regulatory bodies, a big part of their jobs is pretending they are doing something.
This the page on the FTC website where you go to submit a complaint against a business. You can do this. Or you can take a nap. Either way, the outcome will be the same.
We took a look at the Cases and Proceedings page at the FTC. Here are the cases that we found off of just the first page.
- Netforce Seminars
- Apex Captial Group
- Grand Teton ProfessionalsThru, Inc
- DCR Workforce
- LotaData, Inc
- Post Holdings
- Grand Bahama Cruise Line
- Mortgage Solutions
- Effen Ads
- Credit Bureau Center
What do all of these entities have in common?
Most Americans will have heard of any of them.
Evonik is a significant monopoly entity that the FTC needs to engage in actions against?
Who is Evonik again?
We could develop a slightly different list of companies that would warrant more attention from the FTC.
- Lockheed Martin
- American Airlines
The Existence of Broadscale Monopolized Sectors of the Economy
We could refer to entire sectors of the US economy to the FTC, but the problem is that every company we would mention is also large political donors, and therefore they can’t be touched.
With nothing else to do, the FTC busies itself regulating companies tiny to moderate entities, when its charter is to enforce antitrust legislation (hint: you need to be a large entity to engage in monopolistic practices) — and of course publishing these cases so that Americans can see how busy the FTC is keeping itself.
This type of antitrust doublethink and “look the other way-ism” is covered by the following quotation from Matt Stoller, who includes monopoly activity.
(2) In 2017, antitrust economist and Google consultant Carl Shapiro described his tenure as the head economist at the DOJ antitrust division, and explained why the division had brought no monopolization claims in the period he was there.
First, I can say from personal experience that when I was the chief economist at the DOJ during 2009-2011, the Antitrust Division was genuinely interested in developing meritorious Section 2 cases, and we were prepared to devote the resources necessary to investigate complaints and other leads, but we found precious few cases that warranted an enforcement action based on the facts and the case law.
Is that right, that there were literally no cases of monopolization in the American economy from 2009-2011? It’s hard to imagine so. And yet, this is Shapiro’s claim. – BIG
Using “Anti Trust” as a Hypocritical Tool a Tool to Protect Local Political Donors Against Competition
So far, the US has not used antitrust laws unequally, as does India, against foreign firms, it merely barely applies its antitrust legislation.
Notice the following quotation on the WSJ article.
American-based multinational corporations certainly don’t have a ‘right’ to have foreign governments create favorable economic conditions for them. The major concern of these governments should be their citizens: What is best for their own businesses and consumers? The multinationals should be negotiating with that reality in mind. – Comment
They do if Indian is running a perpetual trade surplus with the US as India does, and if Indian companies rely on the US market for much of their business, like Infosys, Tata and many other Indian outsourcing firms do.
Curiously, this comment seems to imply that the only relationship between the US and India is US companies trying to impose their will on India. What is the H1-B program and the fact, as we cover in the article Cognizant Receives Approval for 28,908 H1-B Visas in a Single Year, that companies like Cognizant bring in enormous numbers of H1-B workers into the US every year to displace US workers?
The Likely Effect of Amazon on the Indian Retail/Ecommerce Efficiency
Amazon would, as they have in the US, make the overall Indian economy more efficient, which has not occurred with H1-Bs visa workers coming into the US (costs have increased, and income inequality has gone up because of H1-B, as well as creating a massive reconfiguration of IT work environments, as well as violation of US labour norms).
The Importance of Regulating Amazon
We still do not think that Amazon should be allowed to enter India without regulation, and we would like Amazon to be regulated in the US. But the issue is that US domestic workers are denied this place at the decision-making table. And any criticism of the foreign worker visa programs, even though they are infused with fraud and a large number of Indians is now leading to abuses by Indians, Indian firms and recruiters of domestic US workers as India’s abusive labour standards have been and are being imported in the US, is met typically by Indians and the H1-B lobby as merely racism.
No argument is necessary, just stating “skills” and then “racism” or something “xenophobia.”
And as we cover in the article How India Pressures the US Government to Look the Other Way on H1-B Visa Fraud, India actively demands more and more H1-B visas and little to no oversight.
Indian merchants are right to make their concerns known. However, what they see as a threat to their living, even though they have a quite awful reputation in India, is never afforded to domestic IT workers — who have a far better reputation for providing value than do Indian merchants.
We would never use the low of calling Indians who are trying to defend their commercial interests as racist instead of addressing the actual real underlying issues. However, this courtesy and honesty are generally not extended to whites authors who do not want the US IT jobs handed over to H1-B visa workers while US workers are shown the door.
Indians expect US domestic workers, the Indian government, the H1-B lobby, Hillary Clinton, and many others to sit back and not only have their jobs displaced by a fraudulent series of foreign worker visa programs but to accept that the IT workplace will not be subject to Indian labour standards and to be discriminated against by Indians. Indian retailers don’t seem nearly as accommodating to being displaced as US workers.