In the event that Prime Minister Narendra Modi’s US visit fails to address the issue, India is readying itself for a full-blown dispute with the US at the World Trade Organization (WTO) over a law that has hiked visa fees sharply for non-immigrant workers.

While Commerce Secretary Rita Teaotia recently said India was trying to resolve the conflict through bilateral consultation, a government official said dialogue was unlikely to resolve the matter.

“A Commerce Ministry team is putting together numbers and arguments it has to be ready with when it seeks a dispute settlement panel,” said the official, on condition of anonymity.

Once a panel is formed, everything moves according to strict timelines, and arguments and counter-arguments have to be produced sticking to the schedule.

The controversial US law, which introduced an additional fee of $4,000 and $4,500 for certain categories of H-1B visas and L-1 visas, respectively, was passed last December. It essentially extended an older law that lapsed in September 2015, but in a more stringent form.

The US has argued that the legislation is not specifically targeted at Indian IT professionals. However, Indian companies will be hit as the increased fee is applicable only on companies that employ more than 50 foreigners, or which have more foreigners than locals working for them.

According to 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.

“While Nasscom is assisting the government, individual IT companies are not too forthcoming as they are apprehensive of rubbing the US government the wrong way,” the official said.

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