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India terms US visa fee-hike plan ‘overwhelmingly protectionist'

Visa wrangle

If the Bill is enacted then it can be challenged in WTO, say lawyers

The Bill reportedly aims to raise $600 million to boost surveillance along the US-Mexico border by hiking visa fee

Arun S.

New Delhi, Aug. 9

The US Border Security Bill that aims to increase H-1B and L-1 visa fees reflects an “overwhelmingly protectionist frame of mind” and will raise “very serious questions” as it targets a particular set of companies, India has said.

The affected companies would mainly be from the Information-Technology sector, including Tata, Infosys and Wipro.

As the Bill is yet to become law, New Delhi is waiting for further developments before initiating any action.

But legal experts here said that if the Bill is enacted, it can be challenged in the World Trade Organisation (WTO) as it amounts to “de facto discrimination” against Indian companies.

The Commerce Secretary, Dr Rahul Khullar, told Business Line: “This (Bill) reflects an overwhelmingly protectionist frame of mind. For a country (the US) which keeps on saying ‘we are not protectionist' and ‘we will not erect new barriers to free trade', if ever such a legislation was to be enacted it would send quite the contrary signal.”

He said if the Bill becomes law, it will give rise to “very serious questions because this is a legislative work that is almost designed to target a particular set of companies. And that is patently unfair.”

The Bill aims to boost surveillance along the US-Mexico border and hopes to meet some of the cost, of $600 million, by hiking H-1B and L-1 visa application fees.

The applicable companies are those with 50 or more employees in the US and with over 50 per cent of this workforce who are non-immigrants (temporary skilled workers for H-1B visas and those for L-1 status).

Software industry body Nasscom had estimated that the Bill — passed by the US Senate and to be taken up by the House of Representatives — would cost the Indian IT sector $200-250 million a year.

It said the Bill's provisions “are contrary to the spirit and provisions of the WTO and the General Agreement on Trade in Services (GATS).”

However, Dr Khullar said, “It (the Bill) has not actually become law. The draft of the legislation only reflects legislative intent. How can I act on intent? But I have taken note of it.”

Ms Anuradha R.V., Partner, Clarus Law Associates, said preliminary assessment shows that there will be discrimination against Indian companies because of the extra cost imposed on them.

“In fact, statements and quotes from US Senators have stated this to be the primary rationale for the Bill,” she said.

“While there is no direct provision under the GATS that restricts the right of a country to impose any specific quantum of visa fees, what can potentially be challenged at the WTO as ‘GATS-inconsistent' is the ‘less favourable treatment' that such a law would have on Indian companies, as opposed to any other service supplier,” she added.

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