When India's commerce minister visits Washington this week for bilateral trade talks, he will argue that a new U.S. Immigration Bill potentially violates World Trade Organization (WTO) provisions. This comes less than a week after similar accusations by the U.S. telecoms industry over India's "protectionist policies".
On July 7, The Hindu reported that Commerce and Industry Minister Anand Sharma's four-day American tour will kick off on Thursday, when he will meet with U.S. Trade Representative Michael Froman and U.S. Commerce Secretary Penny Pritzker. Sharma will subsequently meet CEOs of top local companies in Washington, New York and Chicago.
The Indian minister will argue the proposed legislation, specifically the parts related to minimum salary threshold, violate provisions of the World Trade Organization, according to a Commerce Ministry official who spoke to The Hindu.
“The new U.S. Immigration Bill is a big threat to the viability of Indian IT companies in the US," the official said.
“The entire Bill violates the WTO policy of non-discrimination, as it is Indian IT firms that would largely get affected."
However, another official in the report admitted this allegation will be difficult to prove.
The bill would penalize companies that use the H-1B skilled worker visato employ more foreigners than locals. The new rules would ban them from applying for the visa until 2016, or require them to pay a fee of US$10,000 per visa.
These conditions would affect Indian outsourcing companies, such as Infosys, TCS, and Wipro, whose business models rely on importing cheap foreign workers to perform low-level IT functions.
America's peak telecommunications industry body TIA recently warned that India's protectionist policies, favoring domestic manufacturers, may violate the country's WTO obligations.