India has complained at the World Trade Organization (WTO) against the US, challenging that country over its recent increase in fees for categories of non-immigrant temporary visas, which has hit our information technology (IT) sector.
The US had in December doubled the cost of sponsoring workers under short-term H1B and L1 visas, spurring worry on future curbs on IT workers hired from abroad by companies there.
The Geneva-based WTO said India had moved the multilateral body’s Dispute Settlement Body, alleging the US measures appeared inconsistent with earlier commitments on treating foreign guest workers with respect. The complaint starts a 60-day period, upon completion of which, India has the right to ask WTO to rule on it. This includes a 10-day period in which the US can respond to the charges.
Indian citizens are among the nationalities most commonly granted these visas, making roughly 67 per cent of the H1-B visas and 28 per cent of the L-1s (in 2013-14).
The recent move, analysts say, are aimed at making foreign workers an unfavourable choice for major US companies dealing with computer services. This is also estimated to quadruple the Indian IT sector’s annual visa cost to $400 million.
India has argued the measures are inconsistent with the terms, limitations and conditions agreed to by the US in its Schedule of Specific Commitments under the General Agreement on Trade in Services.
A commerce ministry official said the government believes India stands a fair chance at the WTO if it presents solid data on how such protectionist measures by the US discriminate against Indian IT and adversely affect it.
The US is likely to say the decision to raise visa fees isn’t country-specific and data to show how the decision is tailor-made to target Indian IT will bolster this country’s case.
According to a report issued last September by Nasscom, the Indian IT sector’s apex association, companies in sector from here were providing at least 400,000 jobs in the US, of which around 300,000 were held by either US citizens or permanent residents. These companies also invested $2 billion in the 2011-2013 period and paid $22.5 bn in taxes to the US in those years.
The move is in line with the government’s aim of seeking legal recourse at the multilateral body, instead of putting faith in bilateral action.
India recently lost a WTO ruling. The trade body had declared power purchase agreements signed by the government with companies for the ambitious National Solar Mission fell foul of international norms.
The US had filed a complaint before WTO on this issue in 2014, alleging foreign companies, including American ones, were likely to be kept out from taking part in India’s electrification programmes and the government contracts that came with it.