India has dragged the US to the World Trade Organisation (WTO) over the increase in visa fees for non-immigrant temporary workers, which it says is not compatible with multilateral trade rules and hurts Indian IT companies operating in the country.
“New Delhi has filed a request for consultation with Washington on Thursday on the issue of visa fee increase. It is the first step in the dispute settlement system of the WTO,” a WTO official told BusinessLine.
In its complaint, India had said that the current measures (of visa fee hike) results in less favourable treatment for Indian companies with commercial presence in the US in comparison to US companies engaged in providing like services.
This violates the principle of ‘national treatment’ embedded in multilateral trade rules, which lays down that foreign companies will be treated on a par with local firms.
In December, the Obama administration brought in legislation to introduce a $4,000 fee for certain categories of H-1B visa and $4,500 for L1 visa. It hurt Indian IT companies operating in the US the most since it applies only to companies that employ more than 50 foreigners, or which have more foreigners than locals working for them.
Hike could cost India $400m
Industry body Nasscom, in its representations to the government, had said that the visa fee hike would result in an estimated $400 million annual loss to the Indian IT industry.
The US has to respond to the consultation request within 10 days and consultations are to begin within a month. The maximum period of consultations is 60 days after the reception of the request, unless both parties decide to extend them or suspend them.
If consultations fail to resolve the dispute, India can request the Dispute Settlement Body to establish a panel of experts to study the dispute and pass its judgement.