April 10, 2012 5:13 pm

India to take US visas complaint to WTO

India is going to launch a complaint against the US at the World Trade Organisation over the rising cost of work visas, which it described as “highly discriminatory” and damaging to its flagship IT outsourcing industry, an official said.

New Delhi has repeatedly tried to convince the US to roll back the 2010 laws increasing the fee for H1B and L-1 visas, commonly used by its IT companies to bring talent into the US, but has been unable to reach an amicable solution, according to Rahul Khullar, India’s trade secretary.

Mr Khullar said that the government decided to launch a formal complaint against the US last week but had not yet communicated its decision to the WTO in Geneva.

“In the next few days we will inform our ambassador [in Geneva] and then we will file the formal complaint,” he told the Financial Times.

Anand Sharma, India’s trade and commerce minister, discussed visas with John Bryson, US commerce secretary, during a visit to India on March 26. “We had a very frank discussion,” Mr Sharma said after his meeting with Mr Bryson. “There have been concerns over the high rate of [visa] rejection. Last year [the number of issued] visas declined by 28 per cent.”

India’s IT outsourcing industry, which expects to generate $78bn in export revenues this year, complains that the cost of a US visa for a skilled worker has doubled to $4,500, adding about $200m in visa costs to Indian companies.

“We hope to find a middle ground to solve the issue in a friendly manner but it looks tough,” an Indian official said of the trade dispute.

The visa issue comes a month after the US launched a case against India at the WTO, saying that New Delhi’s ban on poultry imports – imposed to prevent avian flu – violated global trade rules.

The US government had faced pressure from some members of Congress from both parties and the American poultry industry to challenge India, in an effort to liberalise its rapidly growing chicken market.

Ron Kirk, the US trade representative, said in a statement last month that India’s ban on poultry meat and chicken eggs, imposed in 2007, was “clearly a case of disguising trade restrictions by invoking unjustified animal health concerns”.

“Opening India’s market to American farmers will promote jobs here at home, while also providing Indian consumers with access to high quality, safe US products,” he said.

Although India and the US enjoy a fast-improving relationship, the issue of access to the US visas for Indian IT executives is one of the biggest sources of friction between the countries.

The move by India comes amid a heated US election season in which visa policy on high-skilled workers has not been widely debated. Both Barack Obama, president, and Mitt Romney, the presidential Republican challenger for re-election, have sought to stake out tough positions on trade in an attempt to woo voters in swing states across the industrial heartland of the US.

Mr Obama has proposed some tax measures designed to spur companies to invest in the US – rather than “ship jobs overseas” – and set up a trade enforcement taskforce across several US government agencies. Meanwhile, Mr Romney has vowed to take on China’s trade policy much more aggressively than Mr Obama has.

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