What to Read in The Hindu Editorial( Topic and Syllabus wise)

Editorial 1: The U.S.’s immigration blocks as a self-defeating path

Context

Extensive research has shown that this approach is counterproductive to innovation and job creation; India must be open to setting new paradigms.

 

Introduction

What do we see in the bustling corridors of Silicon Valley, the research labs of Boston, and the biotech hubs of San Diego? Skilled immigrants do not just fill jobs; they create them. They launch startups, file patents and drive innovation, expanding the very foundation of American employment. However, to understand this, we need to challenge our most basic assumptions about how labour markets work in knowledge economies. The debate over H-1B visas in the United States seems to hinge on a seemingly very intuitive argument: that restricting skilled immigration will translate into more jobs for native workers. On the contrary, extensive research has shown that this approach is flawed and, in fact, counterproductive to innovation and job creation.

 

Impact on jobs

• A study by Britta Glennon found that American companies do not typically hire more U.S. workers in response to increasing H-1B visa restrictions. Instead, they accelerate foreign hiring.
• This may seem like an unforeseen consequence, but it is not entirely unthinkable for companies to turn to countries with large pools of skilled workers, like India and China.
• A decrease of 1% in initial employment from the H-1B supply could result in a 10-20% impact on foreign affiliate growth rates.
• It is not just replacement hires; entire teams and operations could move overseas.
• For every 10 H-1B positions denied, U.S. multinational firms hire an average of 8 foreign workers abroad.

 

Impact of H-1B Visa Holders on U.S. Jobs

• Research shows that each H-1B visa holder creates 1.83 additional jobs for native-born American workers over the next seven years.
• Immigrant-founded companies in the U.S. historically attract significant investment and create jobs at higher rates than native-founded firms.
• Research by the National Foundation for American Policy shows that more than half of America’s billion-dollar startups have been founded by immigrants.
• The argument that H-1B workers suppress wages does not hold up to scrutiny:
  1. Giovanni Peri’s research shows that native wages rise when foreign STEM workers are hired due to increased productivity and innovation.
  2. Foreign STEM workers contribute to 30% to 50% of aggregate productivity growth and 4% to 8% of skill-biased productivity growth.

 

H-1B Workers and Wages for U.S. Workers

• American Immigration Council challenges the idea that H-1B workers earn lower wages than their U.S. counterparts.
  1. In 2021, the median wage for H-1B workers was more than double that for the general U.S. workforce.
  2. Between 2003 and 2021, H-1B wages rose by 52%, while wages for all U.S. workers grew by 39%.
• Recent studies show that knowledge spillovers and productivity gains from high-skilled immigration increase native wages.
• When companies do not face hurdles in hiring the talent they need, they expand operations domestically, creating more opportunities for everyone.

 

Impact of Foreign STEM Workers on Native Wages and Innovation

• A study in the Journal of Labor Economics found that a 10% increase in foreign STEM workers leads to a 0.5% to 0.6% rise in native wages and a 0.3% to 0.7% increase in patents per capita.
• Research by Jennifer Hunt shows that a 1% increase in immigrant college graduates in the population leads to a 9% to 18% increase in patents per capita.
• Cities with higher concentrations of H-1B workers, such as Silicon Valley, have become global innovation hubs.
  1. Up to 71% of tech workers in Silicon Valley are foreign-born.
• Restricting this talent flow risks undermining the foundation of America’s technological leadership.

 

‘Brain circulation’, India’s experience

• By some estimates, Indians receive around 70% of H-1B visas annually.
• This phenomenon, once considered “brain-drain”, is now seen as “brain circulation”.
  1. The experience Indians gain abroad significantly bolsters India’s tech sector and innovation ecosystem.
• Skilled migration benefits both the sending and receiving countries.
• Today’s world is highly interconnected, with competition for both global talent and future innovation hubs.
• Canada’s success in attracting tech companies through liberal immigration policies serves as a warning:
• When the U.S. restricts skilled immigration, it does not protect jobs; it exports them.

 

The Need for Nuanced Immigration Policies

• Blanket restrictions will not work.
• The solution lies in nuanced immigration policies that emphasize the complementary relationship between foreign talent and domestic job creation while protecting against abuse.
• The H-1B visa regime needs more, not less, flexibility.
  1. Visa caps should be adjusted to reflect market demands.
  2. Current fixed caps create artificial scarcity, restricting American companies' ability to scale and reducing potential job creation.

 

Fast-Track Processing and Pathways for Entrepreneurs

• Recognizing the importance of skilled immigration:
  1. Fast-track processing mechanisms should be put in place for critical skills.
  2. Provide dedicated pathways for entrepreneurs who can drive innovation and job creation.
  3. Opportunities for permanent residency for STEM graduates should be introduced, allowing for seamless transitions for foreign students trained in U.S. universities.
• Labour market modernisation is crucial: Implement transparent wage determinations.
  1. Introduce real-time analytics to match skills with opportunities.
• This will go a long way in seamlessly matching demand with supply.

 

A talent flywheel

• While the H-1B debate in America unfolds, India must transform its relationship with skilled migration.
  1. Not merely as a talent exporter, but as a dynamic participant in global innovation networks.
  2. Outward mobility should generate inward flows of knowledge, capital, and innovation.

 

Three Pillars of Transformation

• Creating Magnetic Poles of Innovation
  1. Talent is not about building walls, but about creating magnetic poles of innovation.
  2. India needs more specialized innovation clusters with:
     • Global standards
     • Tax incentives
     • Research grants
• Shifting from Catching Up to Setting New Paradigms
  1. India must switch gears from playing catch-up to setting new paradigms and creating new global standards.
  2. IndiaStack and UPI are shining examples of this shift.
• Cultivating a True Innovation Ecosystem
  1. India must cultivate a true innovation ecosystem that supports risk-taking and experimentation.
  2. A startup visa programme could attract global entrepreneurs to build in India.

 

Conclusion

Implementation requires maintaining a delicate balance between short-term wins, like streamlined OCI processes and pension portability agreements, and long-term transformation, such as automated talent mobility systems, joint research funding, shared patent applications and technology transfer agreements. The core principle to remember is that talent mobility is not a zero-sum game.

Editorial 2: The Budget pipeline and India’s foreign policy ambitions

Context

The Ministry of External Affairs remains one of the least-funded Ministries, in turn affecting India’s diplomatic outreach.

 

Introduction

When the Union Budget is presented every year, most of the public attention often centres on taxation, infrastructure, and defence. In this, however, the budget for India’s Ministry of External Affairs (MEA) deserves closer scrutiny. Last year, the MEA budget saw a rare 23% spike, up from the modest 4% annual increase between 2017 and 2023. Despite efficient Budget utilisation, exceeding 96% of the revised estimates, the MEA remains one of the least-funded Ministries. The MEA’s allocation not only reflects the government’s foreign policy priorities but also its capacity to deliver on its global ambitions and commitments.

• The vision of a ‘Viksit Bharat’ by 2047 hinges on sustained global partnerships.
• Here, India is positioning itself as a global leader:
  1. From leading the Global South; strengthening ties with the Association of Southeast Asian Nations;
  2. Enhancing regional connectivity,
  3. Engaging with the Quad (India, Australia, Japan and the U.S.) and
  4. Creating institutions such as the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure.

 

Impact on plans

• Partner countries expect more from India, requiring a stronger MEA.
• Countries anticipate:
  1. Timely project delivery
  2. Financial support
  3. Diplomatic follow-through

 

MEA’s current budget

• Yet, the MEA’s current budget — just 0.4% of India’s overall expenditure — falls short to deliver on these plans.
• In 2022, the Parliamentary Standing Committee on External Affairs suggested raising this to 1% of the total budget.
• While such an increase (approximately 63%) seems unlikely, even a gradual increase to 0.6% or 0.8% would signal intent.

 

Two areas demand greater budgetary resources

• Economic tools for regional integration and cooperation
• MEA’s institutional capacity: Expanding human resources and research
• India’s regional connectivity faced new challenges in 2024, including:
  1. Bangladesh’s regime change
  2. Myanmar’s instability
  3. Strained ties with Nepal
  4. The Maldives’ “India Out” stance.
• But visits by Sri Lanka’s President and Bhutan’s Prime Minister bolstered commitments in cross-border projects.
• Sustaining momentum under the ‘Neighbourhood First’ policy requires economic support, amid China’s growing influence.
• Enhanced financial backing is crucial for advancing connectivity initiatives in South Asia.

 

Foreign aid and shifts

• India’s aid to foreign countries declined by 10% in 2024-25.
• Loans to foreign governments increased by 29%.
• Approximately 50% of India’s grants is directed to its neighbourhood.

 

Aid to Neighbourhood Countries

• Bhutan remained the largest recipient of Indian aid, reflecting:
  1. Historical ties
  2. A new focus on energy interdependence, including hydropower development and sub-regional grid connectivity.
• Aid to Bangladesh declined from ₹200 crore in 2023-24 to ₹120 crore in 2024-25.
• Sri Lanka saw a 63% increase in budgetary allocation.
• A notable shift is the move from outright grants to lines of credit (LoCs).
  1. 45% of LoCs directed to the neighbourhood, with Bangladesh being the largest recipient at $7.86 billion.
  2. While LoCs enable sustainable infrastructure financing, they demand robust disbursement and oversight mechanisms, stretching India’s diplomatic machinery.

 

MEA Resources for Institutional Capacity

• MEA resources are critical for building institutional capacity:
  1. Vital for long-term growth, including through a stronger Indian Foreign Service (IFS).
  2. Supported by an expert research ecosystem.
• MEA’s training budget saw a 30% increase in 2024-25.
• However, overall capacity-building allocations remain insufficient.
• The IFS remains a chronically understaffed diplomatic corps.
• Coordination challenges, delayed expansion plans, and limited lateral entry efforts hinder progress.

 

Budget Allocation for Foreign Missions and Cultural Diplomacy

• Last year’s MEA budget allocation for foreign missions, training programmes, and cultural diplomacy grew by only 7%.
• Key academic institutions like Nalanda University and South Asian University experienced cuts of 20% and 22%, respectively.
• While the MEA has invested heavily in convening international conferences and dialogues to foster India’s image, it must find more budgetary resources to support policy-relevant and evidence-based research at Indian universities and think tanks.

 

Conclusion: Need for declassification, digitisation

According to the External Affairs Minister, S. Jaishankar, “Track 1 has been consistently ahead of Track 2 when it comes to diplomacy, foreign policy, and keeping up with the world.” If this is the reality, and “needs change” as the Minister beckoned, the MEA could lead by example by allocating specific resources in the next Budget to accelerate the declassification and the digitisation of hundreds of thousands of its records. Public e-access will help scholars map India’s rich diplomatic history, contest deeply-held myths and get a better grasp of the underappreciated context and constraints that regulate Track 1 decision-making. And in turn, such Track 2 research may also help current MEA decision-makers to learn from past successes and failures, avoid reinventing the wheel, and articulate India’s uniqueness based on the power of historical record, rather than mere political proclamation.