India adopts wait and watch policy on H-1B visa fee hike row

The issue may not figure during Prime Minister Narendra Modi's visit to the US next month.

The issue of increased fees for temporary US working visas is unlikely to be raised with the Obama administration during Indian Prime Minister Narendra Modi's planned visit to Washington to address a joint meeting of the Congress and Senate next month.

The Modi government already lodged a complaint in March with the World Trade Organisation against the US for increasing the visa fees for two categories of non-immigrant temporary working visas like L-1 and H-1B to $4,000 and $4,500 respectively, seeking consultations with the US on the issue within 60 days.

Since the two-month period expired last week and both sides failed to reach an understanding, India can exercise its right to request the WTO to set up a panel to conduct subsequent proceedings. The WTO also takes 45 days to set up the panel, whose members will go through the case and submit its report to the parties within six months for further action.

"We have already taken up the issue with the US government at various levels including by the Prime Minister Narendra Modi with the US president in December 2015 and also by Indian Finance Minister Arun Jaitley with the US Trade Representative on April 13, 2016. We did not receive any assurance from the US government but were informed that the visa fee hike has been done through a legislative action, where the role of the administration is quite limited," Indian Minister for Commerce and Industry Nirmala Sitharaman told Parliament on Monday.

The minister further said that her ministry officials have informed the US authorities of the negative impact of the visa fee hike, particularly on Indian IT companies. (According to a study conducted by Nasscom, a trade body representing the Indian IT and ITES sector, the IT companies have been remitting around $80 million to the US each year, and with the latest decision the industry has to cough up between $1.4 billion and $1.6 billion every year for a decade).

Letters were also written to the US Commerce Secretary Penny Pritzker and Deputy National Security Advisor Caroline Atkinson in December last year requesting their government not to incorporate such "discriminatory and punitive measures" into legislations without due process of notice and comment, as it would seriously impede the ongoing efforts to take the India-US bilateral trade and investment relationship forward, the minister added.

Interestingly, the data available from the US Citizenship and Immigration Services (USCIS) indicates that the Indian IT companies were keen on securing more work visas notwithstanding the visa fee hike. While 124,000 applications were received for H-1B visas for FY2014, 172,500 applications were received for FY 2015; 233,000 for FY 2016; and 236,000 for FY 2017.

The Indian government is confident that the US cannot defend in the WTO as the latter has made a commitment under the GATS to allow the temporary admission of (non-immigrant) specialty workers under the H-1B and L-1 visa provisions.

This commitment reflected the two-decade-old US law as when the GATS and other WTO agreements were finalised. Hence the US is bound by this commitment under GATS and cannot deviate from that commitment.