US visa fee hike an irritant in India-US ties

06 June 2016

Prime Minister Narendra Modi, who begins a three-day visit to the US today, is expected to take up the recent hike in H-1B and L1 visa fees, which is ''discriminatory and largely targeted at Indian IT companies.''

Last year, the US administration imposed a special fee of up to $4,500 on H-1B and L-1 visas, which are mostly used by Indian IT companies. The funds so raised are to used to fund a 9/11 healthcare Act and biometric tracking system, and supplement the US government's $1.1 trillion spending bill.

This is double whammy for Indian professionals and IT companies who contributed an estimated over $25 billion to the US social security programmes during the last decade, this without getting any reciprocal social security benefits.

While Prime Minister Narendra Modi's US visit is expected to address this issue also, the US has lined up issues like trademarks protection and trade facilitation as priority areas. US lawmakers want assurances from Modi on these issues.

As things stand, the only option for India is a full-blown dispute with the US at the World Trade Organisation (WTO) over a law that has hiked visa fees sharply for non-immigrant workers.

Commerce secretary Rita Teaotia has recently said India was trying to resolve the conflict through bilateral consultation, although most government officials say dialogue was unlikely to resolve the matter.

Meanwhile, the commerce ministry is reported to be putting together numbers and arguments to be presented to the WTO's dispute settlement panel.

The higher visa fee is applicable to companies that employ more than 50 foreigners, or which have more foreigners than locals working for them. These, however, are mostly Indian companies and the levy will hit these companies most..

The US argues that the legislation is not specifically targeted at Indian IT professionals, but in effect is targeted at them.
Nasscom estimates the move could lead to an annual loss of $400 million for the Indian IT industry.

The government has asked the IT industry to produce data to show that the higher fees had hit their profits.

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