India has turned the World Trade Organisation (WTO) against the United States' decision to increase fees on certain applicants for two categories of non-immigrant temporary working visas -- the L-1 and H-1B.
Following the complaint, the WTO, in a communication to the US administration on Tuesday, said that it was looking forward to receiving the US government's reply to India's request and to set a mutually convenient date and venue for consultations.
In a statement, the WTO said that India has initiated a dispute proceeding against the US regarding measures imposing increased fees on certain applicants for L-1 and H-1B categories of non-immigrant temporary working visas into the US, as well as measures relating to numerical commitments for H-1B visas.
"The government of India is of the view that these and comparable measures taken by the US are not in conformity with some of the provisions of GATS such as Articles II, V:4, XVI and XX and paragraph 3 and 4 of the GATS Annex on Movement of Natural Persons Supplying Services. These measures also appear to be inconsistent with Articles III:3 and IV:1 of the GATS," the WTO said.
If no agreement is reached between both sides within two months, the WTO dispute resolution tribunal will decide on the complaint.
The US government has doubled the fees for temporary work visas for skilled professionals like H-1B and L-1 visas to $4,000 and $4,500 respectively. India is the largest user of H-1B and L-1 visas -- taking 67.4 percent of the 161,369 H-1B and 28.2 percent of the 71,513 L-1 visas issued in FY14.
US President Barack Obama signed into law the Consolidated Appropriations Act 2016 on December 18, 2015, with the provisions applicable to companies that employ 50 or more persons in the US with more than 50 percent of them holding H-1B or L-1 non-immigrant status. This will remain effective till September 30, 2025.
Despite repeated requests from the Indian government, the US administration went ahead with its decision, which came into force on December 18, 2015. The US decision is expected to impact the Indian IT and ITES industry.
The complaint is viewed as "tit for tat" against the superpower, which has used the WTO as a forum to snub Indian government's plans to encourage its solar industry by offering subsidies to the manufacturers, as well as reduce its dependence on Indian imports, something encouraged as part of Prime Minister Narendra Modi's Make in India program.
The US is the biggest exporter of solar energy equipment and its industry is expected to be adversely impacted by Modi's decision.
According to a study conducted by NASSCOM, a trade body representing the Indian IT and ITES sector, IT companies have been remitting around $80 million to the US each year and with the latest decision, the industry will have to cough up between $1.4 billion and $1.6 billion every year for a decade.
In its complaint, India claimed that the US measure was inconsistent with US commitments under the General Agreement on Trade in Services, amounted to discrimination, and put its temporary workers on a lesser footing compared to American workers.
In a related development, even the UK government has decided to increase visa application fees from March 18, and this also will impact the Indians planning to live and work in Britain.
In a notification, the UK Home Office said that the settlement, residence, and nationality fees will be increased by 25 percent, while optional premium services such as the super-premium service and priority visa services overseas would be increased by 33 percent.
"These changes ensure that the Home Office can achieve a self-funding system whilst continuing to provide a competitive level of service and a fees structure that remains attractive to businesses, migrants and visitors," the Home Office said in a statement.
A report from the Office for National Statistics said that as many as 85,403 Indians were granted entry clearance visas (excluding visit and transit visas) in 2015, followed by China, which topped the list of ten countries with 93,076.