India to discuss visa denial issue with US

Move precursor to New Delhi dragging Washington to WTO disputes board over unfair L1B norms.

With the denial rate of new L1B visa to the United States for Indian applicants hitting a record high, New Delhi is likely to initiate a WTO-enabled consultation process with Washington over the issue, which it sees as discriminatory. And if the consultation process fails to produce an amicable settlement, India could drag the US to the organisation?s dispute resolution body.

The denial rate for L1B visas, which are crucial for migration of professionals to the US, for India-born applicants has risen from 2.8% in 2007-08 to 13.4% in 2010-11. New Delhi considers the stringent L1B visa norms as protectionist. ?We are prepared. The first step will be to seek consultations and approach the DSB (dispute settlement body) in this regard,? a senior commerce ministry official told FE.

The complaint will be filed in the WTO against the hike in visa fees, which raises issues of discrimination faced by Indian IT firms like TCS, Infosys, Wipro and Mahindra Satyam that are present in the US.

As of now, the US is the largest market for the Indian softwares. These IT companies usually send their employees on short-term contracts to the US, seeking to curb which, Washington ? under the Emergency Border Security Supplemental Appropriations Act, 2010 ? has substantially increased the fees for H1B and L1B categories of visas.

This hike would be applicable for those who employ more than 50 people in the US or have more than 50% their employees admitted on non-immigrant visas (the 50:50 rule). The official also said that the ministry has finalised the case as the visa fee hike is prima facie a discriminatory move against Indian IT firms.

According to the procedure, once the complaint is filed, the rules and laws of WTO allows India to hold consultations with the US against the complaint.

The US had raised visa fee in 2010 to fund the enhanced costs of securing its border with Mexico under the Border Security Act. Since then, India has been protesting against the measure.

After India undertakes consultations with the US over the dispute, the WTO mechanism allows the two parties an opportunity to resolve the issue without proceeding further with the litigation. After 60 days, if consultations fail, the complainant may request adjudication by the DSB.

The H1B visa fee has been increased significantly to $2,000 and L1B to $2,700.

However, the large American high-tech corporations, which may bring higher numbers of skilled immigrants into the US would not be affected, since vast majority of their workforce consists of Americans.

According to Nasscom executives, the increasing denial rates for new L1B visas has resulted in problems for Indian IT firms, with many employers not being able to transfer their employees to United States to work on research projects or to serve customers on account of visa denial.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 14-06-2012 at 01:05 IST