On top of $1-bn hit, Indian IT firms’ visa costs up 4-fold
It is unfortunate that despite prime minister Narendra Modi taking up the issue with US president Barack Obama, the US Congress has still decided to go ahead and double the fees on H-1B and L-1 visas used by Indian IT professionals – the move is likely to cost the industry over $400 mn per annum, up from around $100 mn right now. While the earlier fee was charged for visa applications, the new charge is to be levied on visa extensions as well. And while the original visa fees, brought into effect for a period of 5 years in 2009, was supposed to be for financing fencing of the US border, the current fee is to be used for the healthcare needs of the 9/11 victims as well as for a biometric tracking system over a 10-year period – no doubt, these are worthy causes, but it is the equivalent of asking US firms to pay a special charge to fund the costs of Swacchh Bharat, a programme quite dear to the present government. Unlike several other attempted Bills to restrict visas for Indian professionals or to hike fees which Indian IT industry was confident it could fight, the current charges are part of a larger omnibus appropriations Bill which has to be passed if the US government is not to shut down – so there is no question of it not being passed into law.
The quadrupling of US visa costs is rubbing salt over injury since, in addition, the Indian IT industry pays $1bn per year in the form of social security payments for Indian employees who, because they do not stay on in the US, do not reap its benefits – over a period of 15-20 years, this adds up to around $10bn. Resolving this through a totalisation agreement between India and the US has been discussed between both Modi and Obama as well as by commerce minister Nirmala Sitharaman and her counterpart in the US government, but remains stuck. While the US has been quick to raise its demands with India – Obama called Modi to enlist his support when the US wanted to get its way in Paris to junk its historical carbon obligations as well as to make climate funding voluntary instead of mandatory – India’s legitimate demands seem to be getting the short shrift. This can hardly be called a partnership.