The Interplay between Immigration Law and Trade Policies

Abstract

International trade and Immigration are the two most important phenomena which are strongly related to each other. Migration policies ensure safety and security for the immigrants and the nation, whereas, on the other side, trade policies ensure the removal of trade barriers to provide free trade to the nations. Understanding the interplay between immigration laws and trade policies has become a necessity to comprehend the worldwide economy. The interplay of these policies can also lead to short-term fiscal pressure due to the ongoing changes between them. This paper highlights the correlation between these two policies and emphasizes the need for integrated policies to ensure steady growth and development in the economy. Policy synchronization between trade and immigration is essential and its importance can be seen by looking at the case studies given below describing how user-friendly immigration policies and liberalized trade has affected the global economy. Furthermore, this paper divides into a deep analysis of policies, emerging trends, and gaps that hinder growth and provide recommendations to develop balanced policies. Overall, this paper has shed light on the impact of immigration laws and trade policies on international competitiveness and economic growth.

Introduction 

Migration, the movement of people within or across borders, plays a crucial role in shaping a country’s demographics. Individuals enjoy the freedom to move and work globally, provided they meet certain legal requirements. However, India has not traditionally been a major destination for immigrants. According to the World Migration Report 2020, only 3.5% of the global immigrant population is in India, with over half migrating due to safety concerns and others in search of employment.

India’s immigration policies have historically been restrictive, primarily to prevent illegal migration and address security concerns. However, there has been a notable shift towards more open visa policies, especially for skilled workers in fields like information technology and pharmaceuticals. This change has helped alleviate skilled labour shortages and contributed to the country’s economic development.

Migration and trade policies are closely linked, as migration can drive business expansion and economic growth. India’s active participation in trade agreements and initiatives like “Make in India” reflects its goal to become a global manufacturing hub and increase exports. Issuing visas for skilled workers not only facilitates the spread of technology but also boosts export capacity, particularly in tech-related services.

India’s diaspora and the remittances they send home are also vital to the economy. Sudden policy changes can significantly impact opportunities for the Indian diaspora. Remittances are a major source of foreign exchange for India, helping to offset trade deficits by providing capital inflows that stabilize the current account. While increasing imports often lead to trade deficits, remittances help bridge this gap, making them a more stable source of capital compared to foreign direct investment (FDI).

Moving forward, this paper will give you insights into the interplay between immigration laws and trade policies. It will help to learn the alignment and interaction between policies and how it will impact growth and development.

Immigration Laws and Trade Policies

Immigration laws are the guiding principles stating rules for migrating to and from the country. These laws vary from region to region, country to country, and depending on the socio-economic conditions. These laws show the element of border control, especially for those who want to reside and work in the country. Various types of restrictions are imposed by using tariffs and quotas to restrict the goods immigrants can carry with them while entering the other country. 

These laws have been modified with time. Some of the common key frameworks are:

• Immigration Reform and Control Act of 1986(IRCA) – IRCA decided to sanction undocumented migrants and put penalties on employers hiring unauthorized workers. These restrictions were applied to only those employers or recruiters who did not try to make their employees legal workers. It causes employers to discriminate against workers based on their nationality and they start cutting off their wages in terms of compensating themselves for the risk of hiring foreigners. 

• The Foreigners Act 1946 – This act gives the government powers to regulate the entry and exit of immigrants and facilitate various types of visas such as tourist visas, study visas, skilled worker visas, and many more. It also allows authorities to reject the visa if the reason is found unnecessary.
• The Immigrants Act 2000- This act was formulated against the carriers of passengers who brought them to India. Those carriers were sanctioned against the provision of the Passport Act 1920, and forced to pay the penalty. If it’s found that the penalty has not been paid, then carriers’ assets or goods are liable to be seized or detained.